3.800 companies will have to do an energy audit before November 13th. Is yours one of them?

Royal Decree 56/2016, about energy audits, binds companies that meet a series of conditions regarding size, to carry out an energy audit on 85% of their energy consumption every four years. According to information from the Ministry, this RD affects some 3.800 companies, making a total of 27.000 establishments.

The mentioned Royal Decree, transposing the EU Directive 2012/27 on energy efficiency, is only applicable to “large companies”. Until here, everything is clear. But, what is a large company?

According to article 2.1 of the Royal Decree, a large Company provides work to at least 250 persons, or has a business volume of more than 50 Million EUR and a balance exceeding 43 Million EUR, counting as well those groups of companies reaching these figures in an aggregated way, all of this during two consecutive years. On the other hand, SME’s (small and medium-sized companies) are not included in the application range of this Royal Decree.

Nevertheless, many company structures do not fit that easily within these definitions. Customers ask us, among other things: what happens with franchising? And what if a corporation has shares in another one? As far as numbers of employees is concerned, do employees on maternity leave count? Do trainee students count? Business volume is with our without VAT? What happens to cooperative co-operations? What about associations? And foundations? As clearly shows, many different and reasonable questions arise.

The Recommendation of the European Commission of May 6th 2013 is to be taken as a reference in order to answer some of these questions, as here is where micro, small and medium-sized companies on the one hand and large companies on the other hand are defined. In other words, if a company fits within the definitions of the Recommendation, it is not obliged to carry out an audit.

For a start, the Recommendations defines “Company” as “every entity, independently of its legal status, performing an economic activity”. This means, that the key is not if it is a trading company, a cooperation or a foundation, but whether it carries out economic activities or not.

When referring to the computing of employees, the Recommendation clarifies that neither trainees nor students with a vocational training contract, nor employees on maternity or paternity leave have to be taken into account. And as far as business volume is concerned, VAT is not considered.

In addition, with regard to a company holding share in others, the Recommendation distinguishes between autonomous companies (participation of less than 25%, with some exceptions), associated companies (participation of more than 25% but without effective control of the participating company) and related companies (effective control of the participating company), making clear that autonomous companies should be considered separately, while associated companies compute proportionally to the grade of participation. As far as related companies are concerned, they should be computed in full. And finally, franchises do not compute, being separate corporate structures.

It has become clear, that companies need to know, and this is not always easy, if they are obliged to have to do an energy audit, because in case they were and had not audited, they would be committing a very serious infringement with penalties of between 6 and 60 Million EUR (limited to 10% of the business volume).

If you wish to contact us in case of any question and despite of the guidelines developed by the Recommendation of the EU, please contact us. Combining our broad experience in Energy -, Company - and European Law, we will be pleased to elaborate a personalised report for each specific case and for a fixed price.