Changes from plenary report to adopted text

c) where applicable, carry out early, forward-looking investments into energy efficiency improvement measures such as the retrofitting of heating, cooling and ventilation systems, before distributional impacts from other policies and measures show effect;

d) foster technical assistance that facilitates the exchange of best practices on reforms of the regulatory frameworks like property and rental laws in relation to energy efficiency measures and the roll-out of enabling funding and financial tools, such as on-bill schemes, local loan-loss reserve, guarantee funds, funds targeting deep renovations and renovations with minimum energy gains;

e) foster technical assistance for social actors to promote vulnerable customer´s active engagement in the energy market, and positive changes in their energy consumption behaviour;

f) ensure access to finance, grants or subsidies bound to minimum energy gains and facilitate access to affordable bank loans or dedicated credit lines.

3a. Member States shall take appropriate measures to protect people affected by energy poverty, low-income households, vulnerable customers and, where applicable, people living in social housing against unfair price setting and price increases in the supply of heating, cooling and domestic hot water.

4. Member States shall establish a network of experts from various sectors such as health sector, energy sector, building sector, heating and cooling sector and social sectors, including local and regional energy agencies where applicable, to develop strategies to support local and national decision makers in implementing energy efficiency improvement measures alleviating energy poverty, measures to generate robust long term solutions to mitigate energy poverty and to develop appropriate technical assistance and financial tools. Member States shall strive to ensure a network of experts’ composition that ensures gender balance and reflects the perspectives of people in all their diversity.

The same network of experts shall support Member States:

a) to establish national definitions, indicators and criteria of energy poverty, energy poor and concepts of vulnerable customers, including final users;

b) to develop or improve relevant indicators and data sets, pertinent to the issue of energy poverty, that should be used and reported upon;

c) to set up methods and measures to ensure affordability, the promotion of housing cost neutrality, or ways to ensure that public funding invested in energy efficiency improvement measures benefit both, owners and tenants, of buildings and building units, in particular regarding vulnerable customers, people affected by energy poverty, and, where applicable, people living in social housing;

d) to assess, and where applicable, propose measures to prevent or remedy situations in which particular groups are more affected or more at risk of being affected by energy poverty or more susceptible to the adverse impacts of energy poverty, such as women, persons with disabilities, older persons, children, and persons with a minority racial or ethnic background.

Heating and cooling assessment and planning

1. As part of its integrated national energy and climate plan, its subsequent integrated national energy and climate plan and respective progress reports notified in accordance with Regulation (EU) 2018/1999, each Member State shall notify to the Commission a comprehensive heating and cooling assessment, including the mapping of areas identified for new heating and cooling networks. That comprehensive assessment shall contain the information set out in Annex IX and shall be accompanied with the assessment carried out pursuant to Article 15(7) of Directive (EU) 2018/2001.

2. Member States shall ensure that all relevant parties, including public and private stakeholders, are given the opportunity to participate in the preparation of heating and cooling plans, the comprehensive assessment and the policies and measures.

3. For the purpose of the assessment referred to in paragraph 1, Member States shall carry out a cost-benefit analysis covering their territory and based on climate conditions, economic feasibility and technical suitability. The cost-benefit analysis shall be capable of facilitating the identification of the most resource- and cost-efficient solutions to meeting heating and cooling needs, taking into account overall system efficiency, power system adequacy and resiliency, and the energy efficiency first principle. That cost-benefit analysis may be part of an environmental assessment under Directive 2001/42/EC of the European Parliament and of the Council .

Member States shall designate the competent authorities responsible for carrying out the cost-benefit analyses, provide the detailed methodologies and assumptions in accordance with Annex X and establish and make public the procedures for the economic analysis.

4. Where the assessment referred to in paragraph 1 and the analysis referred to in paragraph 3 identify a potential for the application of high-efficiency cogeneration and/or efficient district heating and cooling and/or power generation from waste heat for self-consumption whose benefits exceed the costs, Member States, or the local and regional authorities responsible, shall take adequate measures for efficient district heating and cooling infrastructure to be developed and/or to encourage the development of installations for the conversion of waste excess heat to power for self-consumption and/or to accommodate the development of high-efficiency cogeneration and the use of heating and cooling from waste heat and renewable energy sources in accordance with paragraph 1, and Article 24(4) and (6).

Where the assessment referred to in paragraph 1 and the analysis referred to in paragraph 3 do not identify a potential whose benefits exceed the costs, including the administrative costs of carrying out the cost-benefit analysis referred to in Article 24(4), the Member State together with the local and regional authorities concerned may exempt installations from the requirements laid down in that paragraph.

5. Member States shall adopt policies and measures which ensure that the potential identified in the comprehensive assessments carried out pursuant to paragraph 1 is realised. These policies and measures shall include at least the elements set out in Annex IX. Each Member State shall notify those policies and measures as part of the update of its integrated national energy and climate plans, its subsequent integrated national energy and climate plan, and respective progress reports notified in accordance with Regulation (EU) 2018/1999.

When preparing its policies and measures, Member States shall collect information on cogeneration plants and units in existing district heating and cooling networks and carry out an assessment of the potential for energy savings. That information shall contain at least the data on system efficiency, system losses, connection density, network losses and temperature spread, primary energy and final energy consumption, emission factors and upstream chains of the energy sources. That data shall be published and Member States shall make that data publicly available.

6. Member States shall ensure that regional and local authorities to prepare local heating and cooling plans at least in municipalities having a total population of at least 35 .000 and encourage municipalities with a lower population to prepare such plans. Those plans shall:

(a) be based on the information and data provided in the comprehensive assessments carried out pursuant to paragraph 1 and provide an estimate and mapping of the potential for increasing energy efficiency, including via low-temperature district heating readiness, high efficiency cogeneration, waste heat recovery, and renewable energy in heating and cooling in that particular area; in addition, an analysis of the heating and cooling appliances in local building stocks shall be conducted that takes into account the area-specific potentials for energy efficiency measures and that develops renovation roadmap templates for similar building types with the aim of a rapid, cost-efficient and mutually coordinated transformation of buildings and supply infrastructure;

(aa) be fully compliant with the energy efficiency first principle;

(b) include a strategy for the use of the identified potential pursuant to paragraph 6(a);

(c) be prepared with the involvement of all relevant regional or local stakeholders and ensure participation of general public, including operators of local energy infrastructure at an early stage;

(ca) take into account the existing energy infrastructure for gas, heat and electricity;

(d) consider the common needs of local communities and multiple local or regional administrative units or regions;

(da) assess the role of energy communities and other consumer-led initiatives that can actively contribute to the implementation of local heating and cooling projects;

(db) include a strategy to prioritise people affected by energy poverty, low-income households, vulnerable consumers and, where applicable, people living in social housing as referred to in Article 22, including market analysis to identify and understand the needs of target groups and propose tailored programmes;

(dc) assess how to finance the implementation of policies and measures identified and provide for financial mechanisms allowing consumers to shift to renewable heating and cooling;

(dd) consider energy affordability, security of supply, power system adequacy and resiliency;

(e) include a trajectory to achieve the goals of the plans in line with climate neutrality and the monitoring of the progress of implementation of policies and measures identified;

(ea) develop a strategy to plan the replacement of old and inefficient heating and cooling appliances in public bodies with highly efficient alternatives with the aim of phasing out fossil fuels;

(eb) assess potential synergies with the plans of neighbouring regional or local authorities to encourage joint investments and cost efficiency.

Member States shall ensure that all relevant parties, including public and relevant private stakeholders, are given the opportunity to participate the preparation of heating and cooling plans, the comprehensive assessment and the policies and measures.

For this purpose, Member States shall develop recommendations supporting the regional and local authorities to implement policies and measures in energy efficient and renewable energy based heating and cooling at regional and local level utilising the potential identified. Member States shall support regional and local authorities to the utmost extent possible by any means including financial support and technical support schemes. Member States shall ensure that heating and cooling plans are aligned with other local climate, energy and environment planning requirements, in order to avoid administrative burden for local and regional authorities and encourage the effective implementation of the plans.

6a. Local heating and cooling plans may be carried out jointly by a group of several neighbouring local authorities provided that the geographical and administrative context as well as the heating and cooling infrastructure is appropriate.

6b. Implementation of local heating and cooling plans shall be verified and assessed by a competent authority. Where implementation is deemed to be insufficient, based on the trajectory and the monitoring pursuant to paragraph 6, point (e), the competent authority shall propose measures to close the implementation gap.

Heating and cooling supply

1. In order to increase primary energy efficiency and the share of renewable energy in heating and cooling supply, an efficient district heating and cooling system is a system which meets the following criteria:

a. until 31 December 2027, a system using at least 50% renewable energy, 50% waste heat, 75% cogenerated heat or 50% of a combination of such energy and heat going into the network;

b. from 1 January 2028, a system using at least 50% renewable energy, 50% waste heat, 80% of high-efficiency cogenerated heat or at least a combination of such thermal energy going into the network where the share of renewable energy is at least 5% and the total share of renewable energy, waste heat or high-efficiency cogenerated heat is at least 50%;

c. from 1 January 2035, a system using at least 50% renewable energy and waste heat, where the share of renewable energy is at least 20%;

d. from 1 January 2045, a system using at least 75 % renewable energy and waste heat, where the share of renewable energy is at least 40%;

e. from 1 January 2050, a system using only renewable energy and waste heat, where the share of renewable energy is at least 60%.

f. in line with the energy efficiency first principle, where the share of waste heat exceeds the criteria in points (c), (d) and (e), and where the waste heat would otherwise be lost, waste heat may replace any of the other energy sources;

g. an assessment has been made of the maximum needed temperatures in distribution grid.

2. Member States shall ensure that where a district heating and cooling system is built or substantially refurbished it meets the criteria set out in paragraph 1 applicable at such time when it starts or continues its operation after the refurbishment. In addition, Member States shall ensure that when a district heating and cooling system is built or substantially refurbished, there is no increase in the use of fossil fuels other than natural gas in existing heat sources compared to the annual consumption averaged over the previous three calendar years of full operation before refurbishment, and that any new heat sources in that system do not use fossil fuels ▌. Member States shall also ensure that the geographic routing of existing district heating and cooling systems are mapped and published.

3. Member States shall ensure that as from 1 January 2025, and every five years thereafter, operators of all existing district heating and cooling systems with a total energy output exceeding 5 MW and which do not meet the criteria set out in paragraph 1(b) to (e), prepare a plan to increase primary energy efficiency and renewable energy and to reduce distribution losses. The plan shall include measures to meet the criteria set out in paragraph 1(b) to (e) and shall be approved by the competent authority.

3a. Member States shall ensure that a data centre with a total rated energy input exceeding 100 kW utilises the waste heat or other waste heat recovery applications unless it can show that it is not technically or economically feasible in accordance to the assessment referred to in paragraph 4.

4. In order to assess the economic feasibility of increasing energy efficiency of heat and cooling supply, Member States shall ensure that an installation level cost-benefit analysis in accordance with Annex X is carried out where the following installations are newly planned or substantially refurbished and their material costs have not yet been incurred:

(a) a thermal electricity generation installation with an average annual total energy input exceeding 5 MW , in order to assess the cost and benefits of providing for the operation of the installation as a high-efficiency cogeneration installation;

(b) an industrial installation with an average annual total energy input exceeding 5 MW in order to assess utilisation of the waste heat on-site and off-site;

(c) service facility with an annual average total energy input exceeding 5 MW, such as wastewater treatment facilities and LNG facilities in order to assess utilisation of waste heat on-site and off-site;