Achieving Energy Efficiency – what EU Directive 2023/1791 means for manufacturing companies
The EU Directive 2023/1791, specifically Article 11, mandates that all manufacturing businesses over a certain size* (more on that in a moment) must have implemented an energy management system such as ISO 50001 (or equivalent) by October 2027. In reality, however, this would actually mean carrying out a first energy audit in October 2026, to be ready for ISO certification a year later!
Even smaller businesses of a certain (lesser) size* – not required to have an ISO in place – will need to have carried out a energy audit by or before October 2027.
This directive, part of the broader ‘Fit for 55’ initiative, aims to reduce greenhouse gas emissions by 55% by 2030 and forms part of the EU’s strategy to enhance energy efficiency and reduce carbon emissions across industries.
Many companies may not realise the full impact of this directive or understand what it entails. This article aims to inform businesses about the directive, what compliance involves, and how to prepare.
A word about size
For a business with greater annual consumption of 23.6 GWh: a first energy audit will need to take place in October 2026 so that ISO 50001 can be in place by October 2027.
If your spend on energy is greater than €200K, you could fall into the above category. Note that the figures are calculated across the business as a whole, not on a site-by-site basis.
For a business with consumption between 2.8-23.6 GWh: a first energy audit must also commence in October 2026.
What is the EU Directive 2023/1791?
EU Directive 2023/1791 is a legislative measure designed to enhance energy efficiency across Europe. It sets binding targets for energy savings, emphasising the principle of “energy efficiency first”. This directive is part of the EU’s comprehensive strategy to combat climate change and transition to a more sustainable economy. It recasts previous energy efficiency directives to align with the EU’s more ambitious climate targets under the European Green Deal (striving to be the first climate-neutral continent), and ‘Fit for 55‘ initiatives. Take a look at the excellent overview on the European Commission website.
What is ISO 50001 and why is it important?
ISO 50001 is an international standard for energy management systems (EnMS). It provides a framework for organisations to manage and improve their energy performance by:
- establishing a policy for more efficient energy use
- setting targets
- using data to make informed decisions about energy consumption
Implementing such a standard helps organisations reduce energy costs, enhance sustainability and meet regulatory requirements. The directive does state ‘or equivalent’, but ISO standards are the most recognised around the world, and what ‘equivalents’ might be acceptable have not yet been defined.
What’s different about ISO 50001 compared to ISO 14001?
ISO 14001 and ISO 50001 are both standards aimed at improving an organisation’s environmental performance, but they focus on very different aspects.
ISO 50001 often used to be viewed as a ‘nice to have’ or an easy ‘add-on’ for companies who were already implementing ISO 14001. Now it has absolutely come into its own and is super-important in its own right.
While both standards share similarities in their structure and approach (both follow the Plan-Do-Check-Act cycle), ISO 50001 places a far more focused emphasis on energy performance improvements.
Why does the manufacturing industry need to take heed of this directive?
Here are the specifics.
Article 11 of the directive mandates that all large manufacturing businesses implement ISO 50001 by 2027. ‘Large’ is defined as “enterprises with an average annual consumption higher than [23.6 GWh] of energy over the previous three years, taking all energy carriers together”, so calculated across ALL a business’s sites, not just each site individually.
And that’s just for starters! “Member States shall ensure that the enterprises … carry out a first energy audit by 11 October 2026 and that subsequent energy audits are carried out at least every four years. … The enterprises concerned shall draw up a concrete and feasible Action Plan on the basis of recommendations arising from those energy audits.”
Furthermore, “enterprises with an average annual consumption higher than 10 TJ [2.8 GWh] of energy over the previous three years, taking all energy carriers together, which do not implement an energy management system are subject to an energy audit.”
Obviously this is a very good thing for the planet and, by putting such systems in place, businesses can streamline their energy management processes, reduce operational costs, and contribute to broader environmental goals.
How will this affect the pharmaceutical and medical devices manufacturing sector?
This sector typically has high energy consumption due in part to its stringent environmental control requirements. There are often complex and energy-intensive processes involved, including sterilisation, cleanrooms, refrigeration systems, water purification, chemical synthesis and reactions, to name just a few. Implementing an EnMS will enable these industries to optimise energy use, reduce operational costs, and contribute to sustainability targets. An EnMS tailored to the unique needs of this sector will be essential for compliance.
What about the food and beverage manufacturing industry?
This is another high energy-consuming sector which will also be significantly impacted. Processes such as refrigeration, cooking, evaporation, drying, pasteurisation, sterilisation and packaging all consume substantial energy. Adhering to an EnMS will help such businesses identify areas for energy savings and efficiency improvements, also leading to potentially significant cost reductions and enhanced competitiveness.
There are three distinct stages leading to ISO 50001 certification.
- Certification Audits
- EnMS implementation
- Gap Analysis
This is how we would support our clients on their journey to ISO 50001 accreditation:
- Conduct an Energy Review
Assess current energy usage and identify significant energy consumption areas. - Set Objectives and Targets
Define achievable goals aligned with the EnMS framework. - Develop an Energy Management Plan
Create a detailed plan to implement energy-saving measures. - Implement the Plan
Deploy the necessary technologies and processes to achieve energy objectives. - Monitor and Measure
Continuously track energy performance and make necessary adjustments. - Conduct Regular Audits
Ensure compliance through periodic audits and reviews.
Why do companies need to be ready by 2026 ??
If your company needs to be certified by 2027, it is crucial to have an EnMS fully in place by to ensure that you can be certified in time. This could mean having the EnMS up and running by early 2026 to ensure that the certification bodies will be able to see ample evidence that everything is in place when you are audited in 2026.
Audit Readiness – Achieving certification involves a comprehensive audit of your energy management system. This process takes time and requires thorough preparation.
Avoiding Auditor Shortages – As the deadline approaches, there will likely be a high demand for certification bodies. There is already a skill shortage in this area. Waiting too long to begin the process could result in a shortage of available auditors, causing delays and potentially leading to non-compliance penalties. “First come, first served” definitely applies here.
Time for Change – Implementing an EnMS often reveals areas for improvement that require time to address. Starting early gives you the necessary buffer to make these adjustments and ensure your system meets the requirements of the directive.
What steps can businesses take to comply with EU Directive 2023/1791?
- Start with an assessment
Conduct a thorough review of your current energy management practices to identify where improvements need to be made. Use a reputable, experienced company to do this assessment as they will be able to guide you through the process and provide valuable insights. - Develop a detailed plan
Create a comprehensive plan that outlines each step of the implementation process, including timelines, responsibilities and resources. Here at EM3, we break ours down into a five step plan, starting with the measures that are quickest, easiest (and cheapest) to implement, working up to the bigger changes, along with details about the ‘payback time’ for each stage of implementation. - Train your team
Ensure that all staff are trained on the requirements and understand their roles in the energy management system. - Schedule regular check-ins
Establish regular progress reviews to track your implementation efforts and make any necessary adjustments to ensure your business stays on track. - Prepare for the audit
Once your system is in place and the first steps in the plan are being implemented, conduct regular internal audits to identify any remaining issues and prepare for the official certification audit.
What are the benefits of complying with EU Directive 2023/1791?
- Environmental Impact: Significant reduction in greenhouse gas emissions. ‘Doing your bit for saving the planet.’
- Cost Savings: Reduced energy consumption translates to lower operational costs. Certainly, initial investment for some measures can be substantial but over time the payback can be significant.
- Regulatory Compliance: Penalties and legal issues can be avoided. The fines are expected to be extremely high. Each member stage will decide its own figures, but the Directive states (Article 32): “The penalties provided for shall be effective, proportionate and dissuasive.”
- Market Advantage: Enhanced reputation in a market increasingly focused on sustainability will give you the edge over your competitors. Greenwashing just doesn’t wash any more – with consumers, other companies, auditors, governments … anyone!
What is CSRD?
As well as EU Directive 2023/1791, there is something else very important going on too! The Corporate Sustainability Reporting Directive (CSRD) has already come into force, from January 2023. In the same way that listed companies have to (by law) produce a financial report, now all large companies or listed SMEs in the EU (plus non-EU companies which generate over €150 million on the EU market) have to include their sustainability report – and it has just as much importance as the financial reporting. Within it, companies will have to report their Scope 1, Scope 2 and Scope 3 emissions, and demonstrate that there is a plan to reduce them.. You can read more about CSRD on the European Commission website, or listen to their helpful podcast.
Conclusion
EU Directive 2023/1791 presents both a challenge and an amazing opportunity for manufacturing industries. By adopting a good EnMS, businesses will not only comply with regulatory requirements, but also achieve substantial energy savings, cost reductions and improved sustainability. Proactive planning and implementation will be key to leveraging these benefits and ensuring a smooth transition to a more energy-efficient future.
For further guidance, do get in touch with us to discuss your business’s current position and what your next steps should be. Our ‘Discovery Process’ will set you on the right path. Fill in our Contact Form or ring one of our offices in Ireland, Spain or the UK – we are here to help.
