Mila Krivokapic, Sustainability Consultant, Schneider Electric Energy & Sustainability Services
Mila is a sustainability consultant and compliance specialist, helping organizations to understand sustainability-related legislation and transpose for their overall strategy.
French ELAN law and the Tertiary Decree are increasing sustainable ambition in the tertiary sector: by 2030, buildings used by the tertiary sector will have to reduce their consumption by 40%. From September 2021, landlords and tenants in France will be required to annually declare the energy performance achieved by their buildings via an online platform. This leaves companies with less than a year to not only collect energy consumption data but also start developing an advanced energy management strategy.
Legislation and origin
The ELAN Law (la loi ÉLAN - Évolution du Logement, de l’Aménagement et du Numérique) that was adopted by the French Senate in October 2018, aims at reforming real estate law in France. In addition to other measures aimed at facilitating the construction and protecting the most vulnerable stakeholders, the law has ambitious goals related to the energy consumption of buildings and gives a legal basis for controlling and reducing energy use in buildings. Article 175 of the Law urges for actions to reduce final energy consumption in buildings for tertiary use in order to achieve a reduction in final energy consumption for all buildings subject to the obligation. The actions defined in this article are consistent with the objectives set by the national low-carbon development strategy mentioned in Article L. 222-1 B of the French Environment Code.
Approved in October 2019, the Tertiary Decree (Décret tertiaire), also called the Tertiary Renovation Decree, details the terms of application of Article 175. The Article imposes a reduction in the energy consumption of French tertiary sector buildings: starting September 2021, affected buildings will have to declare their energy consumption on a yearly basis and ensure they reduce it: 40% by 2030, 50% by 2040 and 60% by 2050, compared to a 2010 baseline.
What are the implications for companies?
All buildings that have 1000 m2 or more used for tertiary purposes will be covered by this Decree. As such, all companies owning or operating the buildings are concerned by the Decree. The obligation is enforced on both landlords and their tenants and the scope of responsibility should be mentioned in the lease agreement.
Qualifying buildings will have to set a base year and track annual energy consumption to demonstrate energy reductions. The company has some flexibility in choosing the base year: it can be 2010, or if the data is not available, it can be a more recent year. Companies should collect the energy data of their buildings and submit the yearly consumptions to the digital platform OPERAT, operated by ADEME, French Environment and Energy Management Agency. The first data submission deadline is September 2021, leaving companies with less than a year to ensure compliance.
The Tertiary Decree allows for target adjustment in some specific instances, e.g. in the event of a risk for the building structure or disproportionate cost compared to the expected benefits. Any target modifications will have to be justified with a technical file and written by qualified staff, in line with the regulation.
Finally, companies that fail to comply with the Decree will face fines up to 7,500 EUR for a non-complying building – for a company that owns or operates several non-complying buildings, the costs could be quite high. Furthermore, the State will also penalize non-conformity on a "name & shame“ principle, by publishing their name on a special non-compliance site list.
One year left - what do you need to do?
The Tertiary Decree might seem like a straight forward exercise requiring companies to track progress in line with well-defined targets. In practice, however, this new decree necessitates companies to review their entire energy management systems. And given the first deadline for data submission is September 2021, companies need to act quickly.
- As a first step, having an advanced data management system in place is key. Companies will have to ensure that they have readily-auditable energy consumption inventories, whether this means collecting invoices for all qualified sites in different folders, or opting for a more sophisticated energy management software.
- Communication between the various internal stakeholders (accounting, energy management, operations management) will need to improve in order to streamline the data collection and management process.
- In due time, companies will also need to work on a collective commitment to set sound long-term energy management strategies that will have to transition from reporting only to commitment and results.
- Understanding the ambitious saving obligations, companies might need to look into innovative funding models such as energy-as-a-service to secure the needed investments in energy efficiency.
To connect with an energy & sustainability expert about how your company’s buildings might be affected, contact us today.