This chapter covers energy policies for industrial SMEs in Portugal. It starts by giving an overview of energy consumption levels among Portuguese SMEs, building on recent estimates developed by the OECD. Thereafter, it moves on the description and assessment of the main current energy policies for industrial SMEs, including those included in Component 11 (industry decarbonisation) of the national Recovery and Resilience Plan and the national energy audit system. The chapter finally presents new programmes that could complement existing policies, such as voluntary agreement programmes and energy efficiency networks.
The Green Transition of SMEs and Entrepreneurship in Portugal
Abstract
In 2020, Portugal’s levels of emissions were back to the levels of the 1990s. Portugal has set ambitious targets for the development of renewable energy sources. Over the last decades, significant progress has been made especially in wind and solar power capacity, while the potential of green hydrogen has also more recently been explored through the development of a national hydrogen strategy.
There is a lack of international data on SME energy consumption levels. Recent new estimates by the OECD show that SMEs account for 65% of energy consumption in Portugal's business sector, which is 22 percentage points higher than the EU average. This indicates the importance of actively involving SMEs in national climate and energy policies. Information on SME energy intensity also shows that the energy efficiency of Portuguese SMEs could be enhanced, especially considering the high impact of energy costs on SME turnover (i.e., the energy price burden) in Portugal.
The main energy investment support programme targeting industrial SMEs in Portugal is Component 11 (“Industry Decarbonisation”) of the national Recovery and Resilience Plan (RRP). With a total budget of EUR 837 million over the period 2021-2027, this policy aims to support industry decarbonisation through the adoption of low-carbon processes and technologies, energy efficiency measures, the integration of renewable energy sources and energy storage, and the development of decarbonisation roadmaps and capacity-building activities.
Component 11 of the RRP has proven to be very inclusive of industrial SMEs, notably through the involvement of intermediary organisations (e.g., business associations, research and technology organisations), the implementation of project calls of different sizes, and the inclusion of most industrial sectors in many calls and legislative reforms. One possible drawback is that, so far, the main support measure has involved the micro-generation of clean electricity through the installation of solar panels, while energy efficiency improvements, especially industry-specific ones closely linked to the production process, have comparatively received less attention.
The large budget of Component 11 of the RRP, especially compared to other pre-existing energy measures (e.g., the Energy Consumption Efficiency Promotion Plans), may also raise concerns on the future ability of the government to maintain the necessary momentum to drive the energy efficiency and industry decarbonisation agenda of the SME sector.
Energy audits are the most common targeted energy programme at industry level. In Portugal, energy audits are regulated by a law from 2008 that makes them compulsory for industrial companies with energy consumption levels above 500 tons of oil equivalent (toe) per year (about 2.5 GWh of electricity per year). The audit leads to an eight-year energy rationalisation plan, which audited companies are mandated to implement.
Portugal’s energy audit system is inclusive of SMEs, as shown by an increasing number of covered facilities with consumption levels below the 500 toe/year threshold and in sectors where the SME presence is strong, such as the food industry and textile. Similarly, the Management System of Intensive Energy Consumption (SGCIE), which is a national database fed by energy audits, is an important source of information that can guide policymakers in the design of better energy policies for industry.
While the overall energy audit system works well, some possible areas for improvement include the phase-out of a carbon-tax deduction for energy-audited companies; the integration of international energy management standards into the national energy audit system; better accreditation of energy auditors; and more explicit support for energy management practices as part of the audit process.
In addition to energy audits, Portugal could consider the introduction of two additional measures which are currently unavailable in the current policy landscape: energy management systems (EnMS), including as part of voluntary agreement programmes (VAP), and energy efficiency networks.
Success factors for the adoption of EnMS include, among others, top management support, staff (not necessarily full time) who also work on energy issues, and in-house understanding of energy use and possible improvements.
Energy efficiency networks are particularly relevant for SMEs in light industries, as they provide companies with energy management support without the need to achieve a formal energy management certification.
This chapter offers an overview of the main energy programmes for industrial SMEs in Portugal. The first section provides a quick overview of macro trends in energy consumption in Portugal. The second section delves into energy consumption in Portugal’s SMEs, presenting recent OECD estimates on the environmental footprint of SMEs. The third section discusses energy investment support programmes, i.e., programmes that offer industrial companies financial or fiscal incentives to improve energy performance or adopt renewable energy sources. The fourth section explores Portugal’s national energy audit system, including possible future developments. Finally, the fifth section introduces new policies, such as voluntary agreement programmes and energy efficiency networks, which could complement Portugal’s existing energy policy landscape.
5.2.1. Portugal has significantly reduced greenhouse gas emissions in the last decades
Portugal has made substantial progress in reducing greenhouse gas emissions (GHG) over the past decades. It has enshrined the objective of carbon neutrality in national legislation and has taken important steps towards the achievement of this objective, such as closing its last two coal-fired energy plants in 2021, ahead of schedule (OECD, 2021[1]) 1.
In 2020, Portugal’s GHG emissions were back to the 1990 levels (see Figure 5.1, Panel A), after having reached their peak in 2005, totaling about 58 000 kilotons (kt) of carbon-dioxide equivalent emissions. In 2022, domestic transport (with around 17 000 kt of CO2 equivalent emissions) and industry (with around 12 670 kt of CO2 equivalent emissions) were the two largest emitting sectors, followed by the energy supply sector (around 9 600 kt of CO2 equivalent emissions) (see Figure 5.1, Panel B).
Note: Note that data for 2023 in panel A are projected estimates.
In a similar vein, transport and industry are the largest energy consumers, accounting for 35% and 28.5% of final energy consumption (16 million tons of oil equivalent, Mtoe, in 2022), followed by the residential sector (16%) and services and “others” (14%)2. The transport sector is mostly dependent on oil (94% of total energy use), followed by bio-energy (5%) and electricity (1%). On the other hand, industry presents a more balanced distribution of energy inputs, which is the result of progress in recent years on the use of renewable energy sources (RES). More specifically, oil accounts for 29% of industry-driven energy use, followed by natural gas (22%), bio-energy and waste (20%) and heat (4%). Sector-wise the most energy-intensive industries are “pulp, paper and printing”, followed by non-metallic minerals, which includes cement, and chemical and petrochemicals (Figure 5.2).
Source: Eurostat, Simplified energy balances [nrg_bal_s__custom_15433324], https://doi.org/10.2908/NRG_BAL_S
5.2.2. Portugal has made important inroads in the development of renewable energy sources
The share of renewable energy sources (RES) in Portugal’s final energy consumption was 35% in 2022, much higher than the EU-27 average (23%)3. Portugal has also set ambitious targets for further RES development. By 2030, it aims to have 85% of its electricity generated through renewable sources, a significant increase from the 58% achieved in 2021, which was already the fourth highest level in Europe. To achieve this objective, Portugal aims to boost its installed renewable energy capacity from 16.6 GW in 2022 to 42.8 GW in 2030 (Government of Portugal, 2019[2]).
Progress in such capacity has been particularly strong thanks to wind and solar power. In 2022, Portugal reached an installed onshore wind capacity of 5.7 GW, although further expansion is currently limited by existing bottlenecks in the national infrastructure (Camilo et al., 2023[3]). Portugal’s solar capacity expansion has been made through both large-scale solar farms and distributed solar panels installed on the roofs of residential buildings and industrial establishments. Solar energy is expected to contribute 21 GW by 2030, approximately half of the country’s planned RES capacity.
More recently, Portugal has also looked at the potential of green hydrogen through the development of the national hydrogen strategy in 2020, which has set the goals of 5% of green hydrogen in final energy consumption, 15% of green hydrogen injected into natural gas networks, and between 2-2.5 GW of installed electrolyser capacity by 2030 (Government of Portugal, 2020[4]).
More generally, increased renewable-energy capacity, to be fully exploited, will also require a modernisation of the national electricity grid which has faced, like in other countries, obstacles such as lengthy licensing and permitting procedures and low public acceptance of new projects at local level (IEA, 2023[5]).
In addition to increasing renewable energy capacity, the Portuguese government has taken important steps to liberalise the domestic power market by encouraging private participation in energy generation, notably through the support of energy communities. Portugal has also strived to improve its energy connections with the rest of Europe and its integration in the EU energy market, although they both remain fairly limited. For example, during the 2022 energy crisis, the European Commission designated both Portugal and Spain as “energy islands”, which allowed both countries to introduce electricity price caps before other EU member states (see Box 5.2).
During the 2022 energy crisis Portugal and Spain were the first countries to be allowed by the European Commission to introduce an electricity price cap in derogation of state-aid rules. More specifically, Portugal and Spain were allowed to decouple the price of gas from that of electricity, which is an exception to the system of marginal pricing that characterises energy markets. This benefit was given early in the energy crisis because of the so-called “Iberian exception”, i.e., the limited grid connections of the Iberian Peninsula with the rest of Europe.
In terms of SME-targeted measures, one of the first government initiatives to tackle the increase in energy prices was the transfer scheme “Support Programme for Gas-Intensive Industries” (i.e., Programa Apoiar Indústrias Intensivas em Gás), which was introduced in April 2022 for the following sectors: textile, paper products, chemicals, ceramics, steelmaking, cement, and agri-food. Especially textile, ceramics and agrifood are sectors where the presence of SMEs is strong. The measure was retroactive from February 2022 and in force until the end of 2022. Applicants needed to show that the unit cost of gas in 2022 was at least twice as high as the 2021 average unit price, and that the procurement of natural gas accounted for at least 2% of business turnover in 2021. The transfer covered 30% of the eligible cost, which was given by the difference between the monthly unit price in 2022 and the 2021 average unit price. The maximum support per company was initially EUR 400 000, but it was eventually increased to EUR 500 000.
The government of Portugal also introduced, through Budget Law 2023, an energy-related tax credit. Portuguese companies could deduct from their corporate income tax 120% of the energy-related costs incurred over the previous year. The measure was expected to cover 500 000 companies, most of which SMEs, and cost about EUR 60 million. In addition, the government reduced the taxation of electric vehicles by a rate between 2.5% and 15%, depending on the type of vehicle. The measure was expected to cover 12 500 companies and cost about EUR 5 million.
Source: (OECD, 2023[6])
5.3.1. Portugal’s SMEs account for a large share of business-sector energy consumption
Evidence on energy consumption by firm size is very limited. With few exceptions such as the United States and Korea, which conduct manufacturing energy consumption surveys that also collect information on employment by firm size, most other estimates rely on indirect methods such as the application of sector weights (e.g., the SME share of employment, turnover or value added) to aggregate environmental indicators.
The OECD has recently released new estimates on the environmental footprint of SMEs, based on an indirect approach that uses such sector weights. However, contrary to previous similar exercises, the OECD estimates are based on two-digit sector weights (42 sectors for GHG emissions and 37 sectors for energy consumption), which improves on past similar exercises using one-digit sector weights (12 sectors). Furthermore, previous studies had mostly confined themselves to GHG emissions estimates, whereas the OECD estimates also cover energy consumption (OECD, 2023[7])4.
Against this backdrop, this section presents information on three SME energy indicators for EU countries, including Portugal, across the business sector as a whole and manufacturing5: i) the SME share of energy consumption; ii) SME energy intensity; iii) SME energy price burden (i.e., the impact of energy costs on business activity).
SMEs account for 65% of energy consumption in Portugal's business sector, which is the second-highest value across EU countries, 22 percentage points higher than the EU average (see Figure 5.3). This indicator is affected by the size of the SME sector and its industry composition. Countries where the business sector is driven by SMEs, including in energy-intensive industries, will tend to show higher-than-average values in this indicator. Therefore, the high value of Portugal is not an issue per se, but it does show that the government would be better advised to include SMEs in its national energy policies. With respect to manufacturing, Portuguese SMEs account for 63% of energy consumption, which is also a high value (EU average, 36%), highlighting the importance of SMEs in Portugal’s manufacturing sector, notably through light industries such as textile/clothing, food, and plastic moulds6.
An important distinction in energy consumption at industry level is between production processes and support processes. While the former differ by sector, the latter are horizontal and apply to all sectors, (e.g., ventilation, heating and cooling, lighting, etc.). In energy-intensive industries, the predominant share of final energy consumption typically stems from production processes, whereas the opposite is true for non-energy intensive sectors. In Portugal, as much as 60% of final energy use can be ascribed to production processes, whereas 40% originates from support processes, thus calling for government support programmes that cover both dimensions (Catarino, Henriques and Egreja, 2015[8]).
Percentage values
Note: Estimates use output weights (SME share of value added) at two-digit sector level, which are then applied to aggregate energy indicators. The two primary sources of information are Eurostat’s energy balances accounts and structural business statistics. Because the two datasets follow different sector nomenclatures, applying sector weights built through SBS to energy consumption from the energy balances accounts has required merging sectors (see methodological annex of the bibliographic source). The definition of business sector includes mining and quarrying, manufacturing, construction, and commercial services, while it excludes agriculture, public administration, and financial sector activities.
Source: (OECD, 2023[7])
The “SME energy intensity” indicator reports the average SME energy consumption per one unit of output. It is an indicator of energy efficiency although, at aggregate level, it is also affected by the industry composition of the SME sector. All else being equal, countries where SMEs are disproportionally represented in energy-intensive industries will tend to show higher SME energy intensity. In Portugal, SME energy intensity is 30% higher than the EU average in the business sector (1.66 MWh vs. 1.27 MWh per one US dollar of value added) and 17% higher than the EU average in manufacturing (4.55 MWh vs. 3.88 MWh). This suggests that there is scope for improving energy efficiency in Portuguese SMEs, not only in manufacturing, but also in the services sector (see Figure 5.4)7.
In manufacturing, as noted later in this chapter, the focus should be on improving the energy efficiency of production processes, whereas most policies and investments are currently focused on support processes, such as ventilation, lighting, and heating/cooling. For example, the electrification of low-temperature thermal processes in industries such as food and beverage or textile and clothing can reduce carbon emissions but may need some targeted financial support from the government8. In the services sector, improving the energy efficiency of buildings remains the main direct channel to reduce carbon emissions9. In this respect, Portugal has in place a long-term renovation strategy (LTRS) for buildings, which is an obligation for all EU member states although, based on interviews during the fact-finding mission of the project, this strategy seems to lack the operational capacity to mobilise the required financial resources to retrofit the national stock of buildings.
Megawatt hour (MWh) per one US dollar of value added.
Note: This indicator is calculated as the volume of SME energy consumption over SME value added and is measured in terms of MWh per US dollar of value added. National currencies are converted into USD at purchasing power parity. The definition of business sector includes mining and quarrying, manufacturing, construction, and commercial services, while it excludes agriculture, public administration, and financial sector activities.
Source: (OECD, 2023[7])
5.3.2. Energy costs for industrial SMEs are comparatively high in Portugal
The last indicator (SME energy price burden) measures how much the cost of energy (electricity and natural gas) impacts on SME turnover (see Figure 5.5). In this case, estimates are also presented for 2022 to measure the effects of the recent energy crisis on SMEs. Portugal presents the highest values both for the business sector and manufacturing in the baseline year (2018), indicating that the (high) cost of energy is a structural issue for SMEs in Portugal. Nonetheless, in 2022, at the peak of the energy crisis, the SME energy price burden of Portugal was the fourth highest in the business sector and the third highest in manufacturing, indicating that the national government had comparatively deployed more generous support than other EU countries to help SMEs deal with the increased cost of energy. Against this backdrop, it is worth noting that Portuguese industrial SMEs, aside from the ceramics industry which primarily uses natural gas, mostly rely on electricity as the main energy carrier in final energy consumption (Catarino, Henriques and Egreja, 2015[8]).
It is also important to mention that with the growing penetration of solar-generated electricity in the national grid, the price of electricity should tend towards lower levels in the coming years during peak hours of energy consumption, especially in years when the production of electricity from hydropower, which is a more stable source of renewable energy, is high. This change should encourage industries with low-temperature thermal processes to electrify a greater share of their production. The government could accelerate this transition, which is beneficial not only for industry decarbonisation, but also for the installation of more renewable energy capacity, as this would sit less idle thanks to larger demand from industry.
Companies, especially in energy-intensive industries, have also installed their own photovoltaic production to protect themselves from peaks in the price of electricity. Synergies could be sought in this area through the creation of energy communities between industrial establishments located close to each other.
Impact of the cost of electricity and natural gas over SME turnover (percentage values)
Note: This indicator captures how much the cost of electricity and natural gas weigh on SME turnover. It is presented in percentage values as a share of turnover. The definition of business sector includes mining and quarrying, manufacturing, construction, and commercial services, while it excludes agriculture, public administration, and financial sector activities.
Source: (OECD, 2023[7]).
5.3.3. Survey-based evidence confirms the presence of comparatively high energy costs in Portugal
Survey-based evidence from the European Investment Bank (EIB) confirms that energy costs are an issue for the Portuguese business sector. More specifically, a greater share of companies in Portugal than the EU average and the average of other Southern European countries (i.e., Greece, Italy and Spain) report energy costs as a major obstacle for their business (Figure 5.6, Panel A). Furthermore, despite high energy costs in Portugal, the share of Portuguese companies investing in energy efficiency is relatively similar to the rest of the EU (Figure 5.6, Panel B).
Note: Panel A: The figure displays the results from the question “Thinking about your investment activities in Portugal, to what extent is each of the following an obstacle? Is it a major obstacle, a minor obstacle or not an obstacle at all?”. Respondents were able to answer only one answer alternative to the question. Panel B: The figure displays the results from the question “What proportion of the total investment in the last financial year was primarily for measures to improve energy efficiency in your organisation?”. The questions were asked to all respondents of the survey who had invested in the last financial year. “Southern Europe” refers to the average of values for Spain, Italy and Greece.
Source: EIB Investment Survey
This section describes the main energy investment support programmes that target businesses in Portugal. These programmes are organised in three groups: i) the industry decarbonisation component (so-called C11) of the national recovery and resilience plan (RRP); ii) the Energy Consumption Efficiency Promotion Plan (PPEC); iii) and buildings-related energy efficiency programmes.
5.4.1. The industry decarbonisation component of the Resilience and Recovery Plan is inclusive of SMEs
As of 2024, the main energy programmes for businesses in Portugal, covering both SMEs and large companies across all sectors of the economy, were the project calls included in Component 11 (Industry Decarbonisation) of the national RRP. Like in other countries, Portugal’s RRP has the twin transition at the core of its agenda. Worth overall EUR 22.2 billion, three-quarters of which was disbursed through grants and the remaining one-quarter through loans, it has been estimated that 40% of Portugal’s RRP funding will finance climate objectives. Component 11 (C11) of the RRP had an initial budget allocation of EUR 737 million (i.e., about 8% of the total budget dedicated to climate goals), to which an extra EUR 100 million was added through the REPowerEU Plan, which was launched right after Russia’s invasion of Ukraine to help Europe wean itself off Russian gas (European Parliament, 2021[9]).
Similar to other components of the RRP, C11 includes regulatory reforms and investments (i.e., targeted programmes launched through the means of calls for projects). The C11 calls support the following industry decarbonisation projects:
Low carbon processes and technologies: These projects facilitate the integration of new technologies or upgraded production processes to reduce carbon emissions, which may entail the utilisation of innovative raw materials, new circular economy practices, initiation of innovation projects, and adaptation or replacement of equipment.
Energy efficiency measures: Supported projects under this stream seek to reduce energy consumption and greenhouse gas emissions by optimising or replacing motors and equipment, process optimization, and adopting energy consumption monitoring and management systems.
Integration of renewable energy sources and energy storage: Under this track, projects involve the installation of solar panels, the generation of heat from renewable sources, efficient co-generation of electricity, and production and adoption of renewable hydrogen and gases when technological options for decarbonisation, particularly through electrification, are more limited.
Development of decarbonisation roadmaps and capacity-building initiatives: Projects under this pillar include the identification and dissemination of effective technological solutions, training activities, and information-sharing platforms.
Support is provided through calls which ran until 2024, aimed at both SMEs and large companies in industry and energy production sectors. Intermediary organisations, such as business associations and industrial zone management entities, have also been eligible for support (e.g., in the context of the decarbonisation roadmaps), which has enabled the government to reach a larger number of beneficiaries. Importantly, calls have been open to all industrial sectors, which is key to reaching out to a larger number of SMEs.
Calls under C11 of the RRP have been divided into three groups: small calls (average value, EUR 1 million), medium-sized calls (average value, EUR 5 million) and large calls (average value, EUR 10 million). This division has enabled this component of the RRP to reach a larger number of SMEs than if only large calls had been designed. As of April 2024, only counting project payments above EUR 1 million, Portuguese companies had received spending commitments worth EUR 243 million under C11, about a quarter of which (23%) had been already disbursed, in line with the rest of the RRP.
C11 of the RRP also supports energy investments through two major initiatives – the “sectoral roadmaps for the green transition” (36 roadmaps in total) and the “Mobilising Agendas for Entrepreneurial Innovation” (Agendas Mobilizadoras) – which are managed by the Agency for Competitiveness and Innovation of Portugal (IAPMEI) and delivered through collaborative-research consortia working on different thematic areas, including energy, raw material, natural resources and industrial technologies.
Box 5.3 provides industry examples of main transition challenges that have been tackled in the context of the sectoral roadmaps.
Ceramics: The ceramics sector serving the building industry (tiles, bricks, floors) faces competition from the introduction of new materials, such as wood and cork, as part of a new trend that favours materials that are carbon reservoirs. Decarbonisation of ceramics is currently hindered by the high temperatures needed in the production process, which makes electrification difficult to achieve with the existing technologies.
Pulp and paper: The paper industry has seen a decline in demand due to the increased digitalisation of the press. However, this drop is partly compensated by lower use of plastic and increased use of packaging paper. The circular economy contributes to an optimised paper collection process and increased pulp production from secondary fibres (between 50% and 70% expected by 2050). Finally, decarbonisation is expected to come from the electrification of some industrial processes, which should result in a drop in energy intensity in the range of 25% by 2050, against the baseline year of 2005. Furthermore, the energy valorisation of black liquor, a byproduct of the transformation of wood chips into pulp, can contribute to renewable energy production targets and can be a source of additional revenue for the paper industry.
Cement: Decarbonisation in this sector is expected to occur mainly as a result of lower use of clinker and the use of alternative fuels in production, such as those derived from waste and vegetable waste. In addition, increased heat recovery would enable the industry to improve its energy efficiency. New technologies such as Oxyfuel furnaces integrating the capture of carbon emissions could be a viable solution in the future, although this technology is not yet cost-effective. Given the large emissions of this sector, targeted policy support is important and should cover both the adoption of existing technologies and the further development of new ones which are not yet ready for full-scale commercialisation.
Overall, C11 of the national RRP appears to be well-designed, as it strives to reach SMEs through smaller calls and sectors beyond the most energy-intensive ones. Nonetheless, through information gathered in the fact-finding mission of the project, it appears that most SMEs have been reached through calls promoting the micro-generation of electricity, for example through the installation of solar panels, while energy efficiency measures, especially those linked to the production process, have received less attention, although they would also be major sources of energy savings for industrial SMEs.
One possible reason is that it is more difficult to estimate energy savings and reduced emissions from energy-efficiency projects than from renewable-energy projects. Another possible reason is the shorter implementation period of projects such as the installation of solar panels, compared to more complex energy efficiency projects. For example, information from Portugal’s National Energy Agency (ADENE) shows that the average payback period of energy efficiency measures is 3.5 years in Portugal, with peaks of 7 years for sector-specific measures, 5 years for process integration, and 3.5 years for co-generation of electricity (see Table 5.1).
Based on information from national energy audits
Note: toe = tons of oil-equivalent; tCO2e = tons of carbon-dioxide equivalent; K€ = thousands of euros.
Source: Information presented by ADENE (Portuguese Energy Agency) at the OECD-DGAE-EC online workshop “Measuring the environmental footprint of SMEs,” 26 October 2023.
This suggests that without continued financial support it will be difficult for Portuguese SMEs to realise the energy efficiency gains associated with a more streamlined production process. This also suggests that low-hanging fruits, such as installing smart lighting/ventilation systems or solar panels, have been or are currently being picked up in Portugal, whereas energy programmes in the future may have to prioritise production-related energy efficiency improvements.
Outside the RRP energy efficiency policies, including for the business sector, have traditionally been funded in Portugal through the Energy Efficiency Fund. This Fund was established in Portugal in 2010 and aims to support the different objectives and programmes of the National Energy Efficiency Action Plan. Energy Efficiency Funds are quite common in Europe; Germany, Italy and Spain all have one. In order to ensure sustained financial commitments over time, these funds often receive financial resources not only from the general budget, but also from allocated sources of revenue, such as electricity or gas tariff levies or the EU Emissions Trading System (EU-ETS).
5.4.2. Other energy investment support programmes, such as the PPEC, have much smaller scale
The Energy Consumption Efficiency Promotion Plan (PPEC) is a policy initiative supporting energy efficiency projects, with a main focus on optimising electricity consumption. Now in its seventh cycle, the programme has also been expanded to encompass measures improving the efficiency of natural gas usage. A total of 48 projects have been approved under this plan, with a total investment worth EUR 23 million. Relevant project examples at industry level include walkthrough energy audits and training sessions for companies in the ceramics sector with energy consumption levels below 500 toe; the installation of electricity storage batteries together with solar panels; the decarbonisation of hot water production through the utilisation of heat pumps with capacities lower than 200 kW; and the installation of evaporative cooling towers across different sectors (Government of Portugal, 2024[11]).
The PPEC complements C11 of the RRP, although its small budget suggests that it might be difficult to keep the momentum behind energy efficiency improvements at industry level once all budget commitments of the RRP will be spent over the next years.
5.4.3. Industrial SMEs are eligible for some buildings-related energy efficiency programmes
Portugal also has a number of programmes aimed at improving energy efficiency in buildings. Although both residential and commercial buildings are typically eligible for these programmes, they have mostly been used by owners of residential buildings, as this typology takes the lion’s share in the national stock of buildings (86% of the total).
The most relevant building-related energy efficiency measure for businesses is a subitem of Component 13 (Energy Efficiency in Services Buildings) of the national RRP, which has a budget of EUR 70 million and whose objective is to support both investments in energy efficiency and the generation of energy for self-consumption in commercial buildings.
In addition, the Energy Efficiency Fund, through different calls, covers 60% of the investment costs related to building energy efficiency improvements, such as thermal wall installation and new heating systems10. While this measure is potentially open to industrial SMEs, few have benefited (ADENE, 2018[12]).
The government has also introduced soft loans to encourage building renovation. The main one – called Casa Eficiente (Efficient House) – only covers residential buildings, supporting energy efficiency improvements such as wall insulation, photovoltaic installations, and solar heating systems. Another similar programme – the Financial Instrument for Urban Rehabilitation and Revitalisation (IFFRU) – also targes the rehabilitation of abandoned industrial buildings through long-term soft loans (up to 20 years). However, also in this case, uptake by industrial SMEs has been limited.
Finally, in compliance with the European Building Energy Performance Directive, Portugal has introduced Energy Performance Certificates (EPC) since 2008. Between 2008 and 2022, close to 2.5 million EPCs were issued, with a significant majority (89%) assigned to residential buildings and the remaining ones (about 270 000) issued to commercial buildings11. In this regard, it is important to note that EPCs only address energy use associated with buildings, which is a small fraction of total energy consumption at firm level, especially in industry.
5.5.1. Portugal’s energy audit system is well-functioning and covers industrial SMEs
Energy audits are one of the most common tools to improve energy efficiency in industry. In Portugal, they are managed and monitored by the National Energy Agency (ADENE), under the supervision of the Directorate General for Energy and Geology (DGEG) at the Ministry of Environment and Climate Action. Energy audits are regulated by a 2008 legislation which requires companies consuming more than 500 tons oil equivalent (toe) per year (about 2.5 GWh of electricity per year) to undergo a mandatory energy audit, which is performed by auditors certified by DGEG. The audit leads to the preparation of an energy rationalisation plan, which has a lifespan of 8 years and sets out how energy savings targets will be achieved. Every two years companies need to submit an implementation report to assess progress on targets, which take the form of reductions in energy consumption and energy/carbon intensities by 6% for companies with energy consumption levels above the 500 toe/year threshold and by 4% for companies below this threshold.
The rationalisation plan of each company features the different energy efficiency measures that the company plans to implement to improve its energy performance. This firm-level information is not publicly available, but ADENE aggregates this information at sector and regional levels, thus enabling companies to benchmark themselves against industry and regional averages. ADENE gauges the average payback period of energy efficiency measures at about 3.5 years.
In 2023, as of end-September, ADENE had undertaken 2 096 energy audits in 1 360 business establishments. Figure 5.7 provides the split of business facilities which have gone through an energy audit by level of carbon emissions and industrial sector, showing that an increasing number of covered facilities are less energy-intensive companies, with annual energy consumption levels below 500 toe/year. Sector-wise, food and textile, which are sectors driven by SMEs, are the two main sectors covered 12.
Note: As of September 2023. Panel A: Toe = tons of oil equivalent. Panel B: Sectors: A = Manufacture of vehicles and components, B = Manufacture of metal products, C = Retail trade, D = Manufacture of other non-metallic mineral products, E = Rubber and plastics industry, F = Textile industry, G = Food industries.
Source: Information presented by ADENE (Portuguese Energy Agency) at the OECD-DGAE-EC online workshop “Measuring the environmental footprint of SMEs,” 26 October 2023.
Information from the energy audits is collected and made available through the Management System of Intensive Energy Consumption (SGCIE), which is operated by ADENE. The system is a rich repository of information on energy consumption across different industries, which can better inform industrial energy policies. For example, according to data from SGCIE, electricity accounts for 34% of energy consumption in industry, followed by natural gas (23%) and wood (15%). Different types of oil products account for about 10% of energy sources, suggesting that the direct use of oil as feedstock is relatively limited in the Portuguese industry, which may reflect the strong role of light manufacturing in Portugal (e.g., textile, plastic moulds, etc.).
The SGCIE database also has detailed information at sector level, showing for twenty-one narrowly defined sectors (e.g., from ceramics to bakeries) data on main primary sources of energy (e.g., electricity, natural gas, oil, etc.), levels of energy/carbon intensity (minimum, average and maximum), and main energy efficiency measures introduced after energy audits. This information provides policy makers with useful information on which sectors and measures to prioritise in future industrial energy programmes.
5.5.2. Some reforms could further strengthen the role of the national energy audit system
Energy audits and the related SGCIE system work well in Portugal, but there are some possible areas for improvement. First, audited companies going through an energy rationalisation plan receive excise duty exemptions on electrical power and natural gas, as well as the possibility to apply for incentives to cover energy audit costs and/or investments in energy management systems and energy monitoring. The unit rate of exemption is the same for every product, although there are differences in the rate linked to consumption volumes, with a degree of proportionality that favour larger companies consuming larger volumes of energy.
In the 2021 State Budget, the government had proposed to phase out this carbon tax exemption, but this choice was eventually postponed due to the 2022 energy crisis. With energy prices that have returned closer to normal levels compared to the peaks of summer 2022, the Portuguese government should consider removing this subsidy. Savings from this reform could be used to strengthen the second component of this policy, which provides audited companies with financial incentives that cover energy audit costs and investments in energy management and monitoring systems.
Second, international energy audit standards could be integrated into the national audit system, as evoked by the new EU Energy Efficiency Directive (EED) of 2023. Countries like Spain, Germany, Austria, and Sweden have already integrated international standards in their national energy audit systems, making these countries possible models to follow for Portugal. Currently, there are two such international standards: the ISO 50002 standard and the European EN 16247:1-5 standard. The ISO 50002 standard categorises energy audits into three levels. Level 1 entails a walkthrough without extensive measurement; Level 2 involves audits with some measurement and a comprehensive evaluation of recommended improvements; Level 3 goes further, incorporating modelling exercises, building simulations and offering detailed suggestions for improvements. As to the European energy-audit standard, this consists of five distinct modules: a general one followed by specific modules for buildings, transport, processes, and competency requirements for energy audits.
One primary gain from this reform would be the standardisation of the energy audit process, which would therefore become less dependent on the profile and overall quality of the auditor. Moreover, international standards outline clear roles in the auditing process, for example avoiding conflicts of interest between the auditor and the company being audited (e.g., the auditor has to be independent and not carry out other projects for the client company). Finally, the standards provide a thorough quality control for the implementing agency, enabling all energy audits to be reported in the same way. With a view to enforcing the new EED, Portugal is expecting to integrate these standards in the mandatory energy audits for very energy-intensive companies.
Third, there is room for improvement in the accreditation of energy auditors. The General Directorate for Energy and Geology (DGEG) currently certifies energy auditors based on their academic qualifications (i.e., an engineering degree is required) and professional experience. There is no entry examination, and the auditor’s license does not expire. However, considering the rapid evolution of technologies and regulations in the energy sector, energy auditors are increasingly expected to keep their knowledge up to date. This may require regular re-examinations (for example, every 4-5 years), mandatory capacity-building, and reskilling activities. A new certification scheme for energy auditors could therefore be launched by ADENE, with the involvement of the Portuguese accreditation institute, IPAC, as a third-party independent body, as observed in other countries like Sweden. Furthermore, to avoid a bias in the energy audit system towards support-process measures, industry-specific energy training modules could be established as part of the accreditation system. The accreditation of energy experts is expected to be addressed in the new regulation of the national Management System of Intensive Energy Consumption (SGCIE).
Fourth, there could be scope for creating a more detailed database of energy efficiency measures within the SGCIE system. ADENE already classifies energy efficiency measures according to certain categories, including both support processes (e.g., ventilation, building insulation, heating/cooling, etc.) and production processes (e.g., heat recovery, engine optimisation, combustion systems, compression systems, etc.). A catalogue of detailed energy efficiency measures could be developed to support the work of energy auditors, who would have a palette of solutions from which to pick in the course of an audit, but to which they could also add further information in the form of new energy efficiency solutions, following the audits they will have completed. In doing so, the catalogue would become a living document favouring knowledge spillovers among (certified) energy auditors.
Fifth, energy audits often overlook explicit support for improving energy management practices. International policy programmes that integrate energy management systems (EnMS) have shown that a significant share of efficiency gains originate from problems and solutions identified by the company’s staff, rather than by external technology experts. An evaluation of a Swedish programme which incorporated EnMS certification in the energy audit process showed that energy audits alone accounted only for about 30% of the total annual impact of the programme (Stenqvist and Nilsson, 2012[13]).
Finally, energy audits continue to be today the main targeted energy programme for businesses. However, audits are time-intensive processes which make them suited only for relatively large SMEs in industrial sectors (Vaisanen, 2003[14]). Other policies, such as energy efficiency networks (see below), may be more suited if the government is to involve more SMEs in energy efficiency efforts.
5.6.1. Portugal could introduce new programmes to push forward the energy efficiency agenda
There are two energy management programmes that Portugal could introduce to support the green transition of businesses, including SMEs. Energy management systems (EnMS), which can be a component of wider voluntary agreement programmes (VAP), are more suited for large industrial companies, including larger SMEs in energy-intensive sectors. Energy efficiency networks fit better the needs of the wider population of SMEs, still with a preference for industrial sectors where energy consumption levels are on average higher than in services.
5.6.2. Energy management systems and voluntary agreement programmes would mostly cater to large industrial companies
Final energy consumption at firm level depends on two main factors: the technology in use and the way energy is managed. Energy savings can originate from both sources, although targeted energy programmes, such as energy audits, have typically favoured the technology-side of the story by supporting improvements in production processes (e.g., replacement of old with new machinery) and support processes (e.g., ventilation, lighting, thermal insulation, etc.), while overlooking overall energy management.
Energy management systems (EnMS) and related programmes seek to fill this gap. Although there is evidence that they can enhance energy efficiency – for example, the implementation of an EnMS in Austrian firms led to an improvement of energy efficiency by 165% compared to the baseline situation (Schützenhofer, 2021[15]) – the use of EnMS is still relatively uncommon in most OECD countries. Portugal is no exception, although its figures are especially low. Currently, the country with the largest number of the international EnMS certifications (ISO 50001) is Germany, with a total of 16 452 certificates, followed by China (7 620), France (5 307) and Spain (4 636)13. As of early 2024, Portugal had only 98 companies with ISO 50001 certification, which is low even considering the smaller size of the Portuguese economy compared to those of France or Spain (ISO, 2024[16]).
Internationally recognised success factors for the adoption of EnMS include top management support, the existence of a formal energy strategy, including key performance indicators (KPI), dedicated staff (not necessarily full time), and in-house understanding of energy use (Johansson and Thollander, 2018[17]).
Government support programmes which include an EnMS component are internationally known as Voluntary Agreement Programmes (VAPs) (Rezessy and Bertoldi, 2011[18]). VAPs may include different elements, such as a traditional auditing process combined with the acquisition of an international EnMS standard, the training of company staff to carry out energy management activities, and/or financial incentives for the implementation of some of the suggested energy efficiency measures. Thanks to this multi-pronged approach, VAPs lead to a wider set of energy efficiency improvement proposals, some of which need to be implemented in order to benefit from the financial incentives that are part of the programme. As noted earlier, VAPs are more suited for large industrial companies in energy-intensive sectors. Three VAP examples are presented in Box 5.5.
Japan’s Keidanren Voluntary Action Plan on the Environment: This programme was launched by the Japan Business Federation (Nippon Keidanren) in 1996 to contribute to the Japanese carbon-emission reduction targets as part of the Kyoto Protocol. Key success factors have been the setting of targets consistent with the government’s long-term objectives and transparency in the company information transmitted through the programme to the government. More than one hundred industrial companies have joined the programme, with each company’s plan including numerical targets for either energy consumption or carbon dioxide emissions over a five-year period.
The Netherlands’ Long-Term Agreements on Energy Efficiency (LTA/LEE): The LTA aims to increase energy efficiency and to encourage the use of renewable energy in industry, agriculture and services. The programme was initiated in 1992. Since its third phase, started in 2008, the programme was split into two streams, one catering to companies subject to the EU Emission Trading System (EU-ETS) and one for companies outside the scope of this mechanism.
The United Kingdom’s Climate Change Agreement (CCA): The programme was initiated in 2001 as part of the Climate Change Levy (CCL) package. Under this scheme, companies can get a discount on the CCL if they meet agreed carbon reduction targets.
Source: (Kim and Yang, 2020[19])
Finally, EnMS can also be enforced by law, especially for very large companies. For example, in 2023, the EU introduced a requirement for companies with energy use above 85 terajoule (TJ) to implement an energy or environmental management system through the adoption of European or other internationally-recognised standards14.
5.6.3. Energy efficiency networks would be particularly relevant for industrial SMEs
Energy efficiency networks provide companies with energy management support without the need to achieve an EnMS certification. This makes them a viable policy option for SMEs that may lack the motivation or need to pursue a full energy management certification. Energy efficiency networks were originally introduced in Switzerland in the 1980s, but other countries such as Germany and Sweden have eventually adopted this policy.
The core principle of this policy involves regular meetings (typically 3-4 times per year) comprising groups of 5 to 12 companies over a period of 3-4 years. A network coordinator, who needs to have experience in energy policies, acts as the manager of the network, assisting companies in the implementation of energy efficiency measures. Studies have shown that energy efficiency networks have twice the impact on reducing final energy consumption, compared to companies only undergoing energy audits (Johansson, Johnsson and Thollander, 2022[20]).
Portugal could introduce a similar initiative, which would be particularly relevant for smaller industrial SMEs in light manufacturing. In this respect, the government should keep in mind some of the most common challenges affecting these programmes. First, due to the diverse range of participants, most energy-saving measures proposed in the context of this policy tend to focus on support processes (e.g., lighting, ventilation, etc.), which are similar across industries, rather than on industry-specific production processes. In this regard, a sectoral approach to energy efficiency networks, including through the participation of industry experts as network managers, would be recommended as most beneficial to industrial SMEs. Second, experience from other countries suggests that it can take some time to gain interest from SMEs and establish a functioning network, as well as to find qualified facilitators. The collaboration of intermediary organisations such as business/trade associations and research and technology organisations can help address both challenges.
This chapter has shown that SMEs account for a large share of energy consumption in Portugal, and that energy costs for SMEs are comparatively higher in Portugal than in other EU countries, calling for the involvement of SMEs in national energy policies.
Portugal’s main energy investment programme for industrial SMEs is Component 11 of the national Recovery and Resilience Plan (RRP), which is inclusive of SMEs thanks to the involvement of different types of intermediary organisations in the implementation of the plan, the design of project calls of different size, and the inclusion of a large range of industrial sectors, including those where SMEs are more represented. The budget of Component 11 of the RRP is large (EUR 837 million), especially compared to previous energy efficiency policies like the Energy Consumption Efficiency Promotion Plans. It is, therefore, of great importance to seize the opportunity of the RRP to strengthen both energy efficiency and the use of renewable energy sources in the industrial sector, but also to ensure momentum behind these policies when the RRP will phase out in 2027.
Energy audits are the most established policy to improve energy efficiency in industry. Portugal’s national energy audit system is well-functioning and covers not only large companies, but also SMEs. Furthermore, information collected through the energy audits in the Management System of Intensive Energy Consumption (SGCIE) database can be of great use to steer business energy policies in Portugal. Further improvements to the national audit system would include the certification of energy auditors and the integration of international energy management standards in the national auditing process.
Finally, the chapter suggests two new programmes – voluntary agreement programmes and energy efficiency networks – which are currently unavailable and could complement the business energy policy landscape of Portugal.
Against this backdrop, the following policy recommendations are proposed, some of which are further detailed in the Action Plan.
5.7.1. Policy recommendations
Ensure that Portuguese SMEs continue to be included in national business energy policies, as they account for a high share of business-sector energy consumption and experience high energy costs.
In the context of energy efficiency policies, give adequate attention not only to improvements in support processes (e.g., lighting, ventilation, building insulation, etc.) but also in production processes (e.g. heat recovery, engine optimisation, etc.), as the latter are the main source of energy consumption for industrial establishments.
Swiftly implement the energy audit section of the new EU Energy Efficiency Directive (EED), which lowers the energy consumption threshold for mandatory audits from 500 toe/year to 240 toe/year, thus including many more SMEs than before.
Phase out the tax exemption on oil and energy products for companies that go through the current energy audit system and replace this subsidy with stronger fiscal or financial incentives to invest in energy management systems and energy monitoring equipment.
Strengthen the accreditation system of energy auditors through the introduction of an accreditation exam, regular re-examinations, and capacity-building activities, including on industry-specific modules.
Develop a detailed database of energy efficiency measures at industry level within the scope of the Management System of Intensive Energy Consumption (SGCIE) to support knowledge spillovers among (certified) energy auditors.
Consider the introduction of voluntary agreement programmes (most relevant for large industrial companies), which integrate the adoption of energy management systems into one single multidimensional policy that also comprises training and financial incentives to improve energy efficiency.
Introduce energy efficiency networks, which are especially relevant for SMEs in light industries, as they provide companies with energy management support without the need to achieve a formal energy management certification.
Rationale and description of the initiative
Energy audit schemes are the predominant policy tool for enhancing energy efficiency in industrial SMEs. Among these, the American Industrial Assessment Centres programme stands as one of the earliest initiatives. Additionally, many EU Member States have implemented robust SME energy audit schemes to strengthen energy efficiency among SMEs. These schemes at the EU level originated from a 2006 legislation that recommended member states to establish energy audit policies for SMEs.
Research indicates that only about half of the energy efficiency measures proposed in energy audits are implemented. While Portugal has a longstanding energy audit scheme for energy-intensive industries, its experience with tailored SME energy audit schemes is less extensive. The current programme primarily targets companies that consume over 500 toe of energy annually, of which around 40% are SMEs. However, for companies consuming less than 500 toe per year, Portugal lacks a dedicated energy audit programme.
To support SMEs in their transition towards greener practices, it is recommended that a streamlined energy audit policy scheme be developed and implemented for companies below the 500 toe/year threshold. Such a scheme should be easily accessible and preferably subsidised to cover a significant proportion of the audit costs (for example, at least 50%).
The implementation of such a new SME energy audit scheme would yield several benefits, including the potential for greening a larger number of companies than currently observed. Moreover, Portuguese industrial sectors driven by SMEs, such as textile or plastic moulds, would benefit from this programme in terms of increased competitiveness and resilience.
Expected results
The key expected results are about 10-20% savings for participating SMEs, as per estimates based on an academic paper on the effectiveness of energy audits in small businesses (Schleich and Fleiter, 2019[21]).
Key performance/monitoring indicators
Key performance and monitoring indicators for this initiative include:
Number of SMEs going through the tailored energy audit process per year.
Reduction of energy intensity in the companies undergoing the energy audit process.
Proportion of suggested energy efficiency measures which are implemented.
Average payback period of the implemented measures.
Key authorities
The key authorities to be involved would be DGEG, which would initiate the national energy audit policy programme as the policy administrator, and ADENE, which would act as the main implementing agency. Collaboration and coordination with DGAE and IAPMEI, which are responsible for SME policy, would be recommended.
International policy example: The American Industrial Assessment Centres (IAC)
Description of the approach
One of the oldest policy programmes for energy auditing of SMEs is the American Industrial Assessment Centres (IAC) created in 1976. The IAC is run in collaboration with US Universities (37 of them), where university students perform most of the audits under the supervision of a senior consultant. Industrial SMEs are offered a free of charge assessment by the US Department of Energy. The assessments typically identify improvement measures worth more than USD 130 000 per SME, of which measures worth about USD 50 000 are implemented after a year.
The programme has a twofold impact, providing a free service to industrial SMEs and training university students in the practical knowledge domain of energy audits. The IAC has conducted more than 21 000 energy audits (assessments) and recommended more than 157 000 improvement measures. About half of the recommended energy efficiency measures are deployed by the companies (Anderson and Newell, 2004[22]). The improvement measures are collected and used to create a database of real energy efficiency measures, including description of the company size and sector, explanation of the improvement, resulting energy efficiency gains, investment costs, etc.
Factors of success
The long-term operation of the IAC is a key success factor, as it has enabled the accumulation of knowledge and the fine-tuning of energy audits specifically conceived for SMEs. Another success factor is the IAC database, which has allowed the creation of a taxonomy of energy efficiency measures. Finally, the participation of university students has provided graduate and undergraduate engineers with the opportunity to develop competencies in the field of energy auditing.
Obstacles and responses
There are no major obstacles to this certification scheme apart from the budget funding and the fact that the development of a well-resourced database will take some time.
Relevance to Portugal
Portugal does not currently have an energy audit scheme conceived for smaller industrial enterprises. IAC provides an example of such a scheme.
For further information
US Department of Energy (DOE), Industrial Assessment Centres, https://www.energy.gov/mesc/industrial-assessment-centers-iacsIAC and https://iac.university/ .
Anderson, S.T., Newell, R.G. (2004), Information programs for technology adoption: the case of energy-efficiency audits, Resource and Energy Economics, 26 (1): 27-50.
Schleich, J., and Fleiter, T. (2019), Effectiveness of energy audits in small business organizations, Resource and Energy Economics, n. 56: 59–70.
Rationale and description of the initiative
Energy auditors are a key component of any energy audit programme, as their skills influence the quality of the proposed measures and the adequate follow-up of these measures. In Portugal, the qualification of energy auditors is based on their professional experience and an academic degree in engineering. However, the qualification is not based on an examination and does not expire. This approach, in which energy auditors work autonomously while the National Energy Agency (ADENE) monitors the energy audit reports and the energy rationalisation plans of the audited companies, may not meet the ambitious green transition objectives set by the Portuguese government for its business sector. As technology, policy and regulations evolve rapidly in the field of energy, a certification system for energy auditors would be a welcome development in the context of Portugal.
Furthermore, the current qualification system for energy auditors is not in line with international best practice in which a separate independent body usually certifies the auditors. To move closer to this approach, the DGEG could appoint a certification body in collaboration with the Portuguese accreditation institute (IPAC).
Finally, the new certification system could draw on the already existing European standard for the competence for energy auditors (EN 16247-5) and include a periodic re-examination by an independent but accredited third party (every fourth to fifth year), as well as mandatory regular training and capacity building activities, preferably to be organised by ADENE.
Expected results
The main expected result would be the improvement of the skills of energy auditors and thus the quality of the national energy audit system.
Key performance/monitoring indicators
Key performance and monitoring indicators for this initiative include:
Number of certified energy auditors per year and total stock of energy auditors15.
Number of training and capacity building activities for energy auditors per year.
Industry specialisation of energy auditors.
Key authorities
The key authorities to be involved will be the DGEG at the Ministry of Environment and Climate Action, which would need to launch the programme through national legislation, and IPAC, which would be involved in the accreditation of the body certifying energy auditors. Finally, ADENE would participate through capacity building and re-skilling activities.
International policy example: Sweden’s Energy Auditor Certification Scheme
Description of the approach
The Swedish energy auditor certification scheme was implemented in 2014 and involves an independent certification body responsible for certifying auditors. The certification process includes a six-hour exam (4+2 hours), which is administered by a designated certification body (i.e., called KIWA) and must be renewed every four years. KIWA, which is accredited by the Swedish accreditation body, issues certificates in accordance with the competence requirements set by the Swedish Parliament, which are aligned with the European standard EN 16247-5 for Competence for Energy Auditors.
To be certified as an “energy auditor”, candidates must hold a university degree and possess three years of relevant work experience, in addition to passing the exam. The Swedish Energy Agency regularly updates a list of certified energy auditors, which currently includes 190 professionals. Legislation in Sweden mandates large companies to conduct energy audits every fourth year, following either ISO 50002 or EN 16247 standards, and the audits are required to be conducted by certified energy auditors. The Swedish Energy Agency has also developed sector-specific energy audit guidelines.
Certified energy auditors are required to re-apply for certification every five years and to submit an annual report to the certification body detailing completed energy audits and any relevant training in the energy field that they have recently completed. Certification may be revoked if there is evidence of a lack of competences.
Factors of success
An important factor of success lies in the Swedish certification system, which incorporates re-examination and uses an already established international standard, EN 16247-5.
Obstacles and responses
There are no major legal obstacles to the creation of a certification scheme, although some resistance might be expected from the existing pool of energy auditors, who will need to go through a more rigorous certification process to continue to carry out energy audits.
Relevance to Portugal
Portugal has a well-functioning energy audit system. An improved certification of energy auditors could further improve its overall quality by supporting the identification of the most relevant energy efficiency measures, the follow-up of their implementation, and their classification in a new database, which could further support the work of energy auditors in Portugal.
For further information
Sweden’s Fourth National Energy Efficiency Action Plan, https://energy.ec.europa.eu/system/files/2017-07/se_neeap_2017_en_0.pdf .
Rationale and description of the initiative
Energy management system certification is a lengthy and costly process which can easily discourage industrial SMEs with low final energy usage. Energy efficiency networks, also known as learning networks, are another suitable means of training industrial SMEs in the implementation of energy management activities based on best practices. To be more effective, energy efficiency networks should be set up at industry level for SMEs in energy-intensive sectors, whereas cross-sectoral networks would be more suited for SMEs in less energy-intensive industries. Such a programme in Portugal could be inspired by similar initiatives in Germany, Sweden and Switzerland.
The programme should be subsidised, but participation should also involve some co-financing by the company, for example in the order of EUR 1 000 per year. The programme could also require participants to undertake an energy audit within the first two years of the programme, if they have never gone through an energy auditing process.
The core concept of this programme is that companies meet 3-4 times per year in groups of 5-12 companies over a period of 4 years. The network coordinator serves as an informal energy manager, helping companies to deploy energy efficiency measures. The main benefit of the policy is that companies receive energy management support without having to go through a certification procedure for an energy management system.
Expected results
There is some evidence that the impact of deployed improvement measures following participation in energy efficiency networks can be twice as high as compared to an energy audit policy programme. More broadly, participants are expected to achieve improved energy efficiency.
Key performance/monitoring indicators
Key performance and monitoring indicators for this initiative include:
Number of energy efficiency networks, split in sector-specific and non-sector-specific.
Number of SMEs involved in the networks.
Energy savings generated through the networks.
Reduction in energy intensity of the companies participating in the networks.
Key authorities
The key authorities to be involved will be DGEG to initiate the national energy audit policy programme as the policy administrator, and ADENE with associated sector organisations, which would act as policy operator.
International policy example: Germany’s 500 Energy Efficiency Networks Initiative
Description of the approach
Energy efficiency networks were first established in Switzerland in the late 1980s and were eventually deployed by Germany and Sweden as major pillars of their national energy policy mix for SMEs, along with energy audit schemes. In the case of Germany, in 2014, different sector organisations signed an agreement to establish more than 500 energy efficiency networks by the end of 2020. In Germany, energy efficiency networks consist of 8-12 SMEs, which initially undertake an energy audit and set a joint network target, which they agree to be monitored. The energy target for the whole policy consisted in achieving primary energy savings of around 18 Mtoe by 2020.
The networks are managed by various stakeholders such as chambers of commerce, energy companies, regional energy agencies and consultants. It has been estimated that the impact on energy savings for companies participating in efficiency networks is twice as high as for those that only conduct an energy audit. Energy efficiency networks can thus be a sound policy option for SMEs that may not have the incentive to go for a full-fledged energy management certification.
Factors of success
A major key factor for success is the availability of qualified energy efficiency network coordinators. It is therefore important to train network coordinators before the policy is implemented. Another major success factor is a narrower industry focus for networks which gather companies from energy-intensive sectors.
Obstacles and responses
A major obstacle for this policy is that, similar to the energy audit policy programmes, most energy efficiency measures are implemented in support processes (e.g., lighting and compressed air), especially when networks integrate SMEs from different sectors. Thus, a sectoral approach is suggested for industrial SMEs in energy-intensive industries, where consumption is mostly linked to the production process. These networks would require the involvement of industry experts.
Another challenge is the time and resources needed to gain interest from SMEs. Experience from other countries shows that it can take up to one year to establish a functioning network (OECD, 2017). A key challenge would also be to reach a large number of SMEs participating in the programme. This will require a range of different forms of marketing and outreach activities with already established stakeholders. In the Portuguese context, using stakeholders such as sector organisations as network coordinators (facilitators) would be a good approach to overcome this obstacle.
Relevance to Portugal
Portugal does not have an energy efficiency network programme. This scheme could target smaller industrial SMEs which do not need to go through a full energy management system certification. The policy could also serve as an entry point for undertaking more energy audits in industrial SMEs and could therefore be combined with the more traditional energy audit policy approach.
For further information (sources and weblinks).
Durand A, Jochem E, Chassein E, Roser A, Joest S, Quezada A. (2018), Energy efficiency networks: Lessons learned from Germany. In proceedings of ECEEE Industrial Summer Study.
Koewener, D., Mielicke, U., Jochem, E. (2011), “Energy efficiency networks for companies – concept, achievements and prospects”, Proceedings of ECEEE 2011 Summer Study, Energy efficiency first, The foundation of a low-carbon society, 725-733.
OECD (2017), Energy Efficiency Networks: Towards good practices and guidelines for effective policies to stimulate energy efficiency. Download at (2024-01-04): https://www.ageen.org/downloads/G7_Report_on_Energy_Efficiency_Networks_IPEEC-IEA%20_636.pdf
Rationale and description of the initiative
A detailed online database of energy efficiency measures at industry level within the SGCIE provides a useful tool to offer targeted information on energy efficiency measures to energy auditors and strengthen their competencies. Firstly, by including benchmark indicators such as energy saved and costs per measure, the database would provide a compendium of implemented energy efficiency measures that could be monitored over time. In doing so, the digital monitoring and evaluation platform can particularly support knowledge spillovers within the national energy audit system. Secondly, the data on the platform would provide a means to evaluate policies targeting the uptake of energy efficiency measures (i.e., energy audit programmes and other financial incentives), as well as potential ex-ante evaluation of planned new energy policies.
The database could encompass a catalogue of detailed energy efficiency measures which include but go beyond already established categories within the SGCIE. The current SGCIE applies to installations above 500 toe of energy use per year (about 2.5 GWh of electricity per year). Possibly building on the implementation of a targeted energy audit for SMEs (see action 1), the database could also include data on SMEs with installations using less than 500 toe. Furthermore, ADENE currently classifies energy efficiency measures following specific categories, including both support processes (e.g., ventilation, building insulation, heating/cooling) and production processes (e.g., heat recovery, engine optimisation, combustion systems, compression systems). Following the example of the European Commission’s De-Risking Energy Efficiency Platform (DEEP), the platform could additionally include more specific information on the type of action within these categories and integrate benchmark indicators for each type of energy efficiency measure including investment costs per measure, payback time and energy saved.
As SMEs operate in different sectors and show varying energy needs, energy auditors typically lack expertise in all sectors. In this context, the database would act as a useful knowledge basis to guide the advice of energy auditors while strengthening their sector-specific expertise. In addition, auditors could add insights on new energy efficiency measures based on their audits, thereby turning the database into a living resource. In this context capacity building regarding the use of the platform (e.g., for certified energy auditors, see action 2) could provide a useful quality control mechanism and a means to promote the use of the platform.
Expected results
The main result would be the improved attractiveness of the most effective energy efficiency measures for SMEs. The involvement of auditors in the build-up of the database should also lead to an increased number of energy efficiency measures available for future energy audits and enhance the cost-effectiveness and sectoral accuracy of energy audit programmes.
Key performance/monitoring indicators
Key performance and monitoring indicators for this initiative include:
Number of companies on the platform.
Number of improvement measures on the platform.
Aggregated realised energy and energy cost savings (per measure).
Key authorities
DGEG as the owner of the platform and ADENE as operator and overseeing body of data quality would be the main government authorities involved in the design and delivery of the platform. However, other government authorities at the intersection of environmental, energy and business policies should have access to the platform, although only certified officials and energy auditors should be allowed to upload data to the platform to guarantee the accuracy and reliability of the information.
International policy example: The European Commission’s De-Risking Energy Efficiency Platform (DEEP)
Description of the approach
The DEEP database, financed by DG ENERGY of the European Commission, is an online open-source tool designed to scale up energy efficiency investments by reducing their financial risks. It aims to do this by providing tools for energy efficiency investments and performance monitoring, thereby helping users to understand the real risk of energy efficiency investments based on available market evidence. So far, the database contains nearly 38 000 energy efficiency projects undertaken in both building and industry.
The current version of the platform (DEEP 2.0) was launched in 2021 to include new features such as more advanced risk indicators and an improved benchmarking tool to compare users’ portfolio against subsets of DEEP data. For example, the profitability of energy efficiency investments can be analysed by applying variable energy prices and discount rates. A dedicated analytical toolbox enables users to create customised charts (e.g., on metrics such as payback period per measure) that can be filtered by sector, firm size and country to benchmark planned energy efficiency projects.
Factors of success
By leveraging information from the platform, SMEs mitigate the financial risk associated with energy efficiency investments, thus making those projects more attractive. Moreover, the database can guide SMEs and auditors to a better-informed selection of energy efficiency actions. Similarly, high quality data can support ex-post policy evaluation.
Obstacles and responses
A challenge consists in the quality control, representativeness, and continuous input of data. The platform includes an option to verify the inserted data (while also unverified data is visible through the application of filters), which are anonymised in the database through the aggregation of projects. The initial data on the platform were provided by a diverse group of institutions such as national research institutes, energy agencies, banks and large companies.
Relevance to Portugal
By creating a detailed database, Portugal would dispose of an additional instrument to train energy auditors and make energy efficiency investments more attractive and better targeted to a heterogeneous SME population.
For further information
De-risking Energy Efficiency Platform (DEEP) (2024), https://deep.ec.europa.eu/ .
EEFIG (Energy Efficiency Financial Institutions Group) (2015), Energy Efficiency – the first fuel of the EU Economy, https://wayback.archive-it.org/12090/20240119165143/https://eefig.ec.europa.eu/system/files/2020-10/Final%20Report%20EEFIG%20v%209.1%2024022015%20clean%20FINAL%20sent.pdf .
References
[12] ADENE (2018), Energy Efficiency trends and policies in Portugal, ADENE (National Energy Agency), Lisbon.
[22] Anderson, S. and R. Newell (2004), “Information programs for technology adoption: the case of energy-efficiency audits”, Resource and Energy Economics, Vol. 26/1, pp. 27-50, https://doi.org/10.1016/j.reseneeco.2003.07.001.
[3] Camilo, F. et al. (2023), “Optimization of Offshore Wind Power Generation in Response to the 2022 Extreme Drought in Portugal”, Energies, Vol. 16/22, p. 7542, https://doi.org/10.3390/en16227542.
[8] Catarino, J., J. Henriques and F. Egreja (2015), “Portuguese SME toward energy efficiency improvement”, Energy Efficiency, Vol. 8/5, pp. 995-1013, https://doi.org/10.1007/s12053-015-9325-7.
[9] European Parliament (2021), Next Generation EU (NGEU) delivery – How are the Member States doing? Portugal’s National Recovery and Resilience Plan, European Parliament, Luxembourg.
[11] Government of Portugal (2024), The Energy Consumption Efficiency Promotion Plan (PPEC) - 7th edition, Regulation Agency of Energy Services (ERSE), Lisbon.
[4] Government of Portugal (2020), National Strategy for Hydrogen, Ministry of Environment and Energy Transition , Lisbon.
[2] Government of Portugal (2019), National Energy and Climate Plan, 2021-2030, Ministry of Environment and Energy Transition , Lisbon.
[10] Government of Portugal (2019), Roadmap for Carbon Neutrality 2050 (RNC2050), APA (National Environmental Agency), Lisbon.
[5] IEA (2023), Electricity Grids and Secure Energy Transitions, International Energy Agency, Paris.
[16] ISO (2024), ISO Survey 2024, International Standard Organization.
[20] Johansson, I., S. Johnsson and P. Thollander (2022), “Impact evaluation of an energy efficiency network policy programme for industrial SMEs in Sweden”, Resources, Environment and Sustainability, Vol. 9, p. 100065, https://doi.org/10.1016/j.resenv.2022.100065.
[17] Johansson, M. and P. Thollander (2018), “A review of barriers to and driving forces for improved energy efficiency in Swedish industry– Recommendations for successful in-house energy management”, Renewable and Sustainable Energy Reviews, Vol. 82, pp. 618-628, https://doi.org/10.1016/j.rser.2017.09.052.
[19] Kim, J. and L. Yang (2020), “Review of Voluntary Agreements on Energy Efficiency: Implications for ASEAN countries”, No. 1170, Asian Development Bank Institute, Manila.
[7] OECD (2023), “Assessing SMEs’ carbon emissions and energy consumption: Towards a pilot dashboard of SME greening and green entrepreneurship indicators”, OECD SME and Entrepreneurship Papers, forthcoming.
[6] OECD (2023), “SME policy responses to the 2022/2023 energy crisis: Policy highlights and country experiences”, OECD SME and Entrepreneurship Papers, No. 43, OECD SME and Entrepreneurship Papers, Paris.
[1] OECD (2021), OECD Regional Outlook 2021: Addressing COVID-19 and Moving to Net Zero Greenhouse Gas Emissions, OECD Publishing, Paris, https://doi.org/10.1787/17017efe-en.
[18] Rezessy, S. and P. Bertoldi (2011), “Voluntary agreements in the field of energy efficiency and emission reduction: Review and analysis of experiences in the European Union”, Energy Policy, Vol. 39/11, pp. 7121-7129, https://doi.org/10.1016/j.enpol.2011.08.030.
[21] Schleich, J. and T. Fleiter (2019), “Effectiveness of energy audits in small business organizations”, Resource and Energy Economics, Vol. 56, pp. 59-70, https://doi.org/10.1016/j.reseneeco.2017.08.002.
[15] Schützenhofer, C. (2021), “Overcoming the efficiency gap: energy management as a means for overcoming barriers to energy efficiency, empirical support in the case of Austrian large firms”, Energy Efficiency, Vol. 14/5, p. 45, https://doi.org/10.1007/s12053-021-09954-z.
[13] Stenqvist, C. and L. Nilsson (2012), “Energy efficiency in energy-intensive industries—an evaluation of the Swedish voluntary agreement PFE”, Energy Efficiency, Vol. 5/2, pp. 225-241, https://doi.org/10.1007/s12053-011-9131-9.
[14] Vaisanen, H. (2003), Guidebook for Energy Audit Programme Developers.
← 1. The two coal plants were both located in the region of Alentejo, in the towns of Sines, close to Setubal, and Pego, close to Santarém. Until 2017, more than 90% of electricity in the region of Alentejo was generated by coal-fired plants, but as of 2024, there was no more coal-generated electricity in Portugal.
← 2. Data retrieved from the ODYSSEE MURE Project, which is an EU-supported database on national energy efficiency policies and measures in industry, transport and buildings: https://www.odyssee-mure.eu/publications/efficiency-trends-policies-profiles/portugal.html.
← 3. Based on EUROSTAT data (Share of renewable energy sources), https://ec.europa.eu/eurostat/databrowser/view/NRG_IND_REN/default/table?lang=en.
← 4. This has required overcoming the issue of different sector definitions between the energy balances accounts and the structural business statistics database. The recent OECD publication (2023) “Assessing greenhouse gas emissions and energy consumption in SMEs: Towards a pilot dashboard of SME greening and green entrepreneurship indicators” (https://doi.org/10.1787/ac8e6450-en) explains in detail the methodology behind the OECD estimates.
← 5. The business sector includes mining and quarrying, manufacturing, construction, and commercial services, while it excludes agriculture, public administration, and financial sector activities.
← 6. Portugal’s National Energy Agency (ADENE) has also recently produced estimates on the energy consumption of domestic SMEs, as part of an EU-funded project which has gathered nine different national energy agencies to support energy efficiency policies in SMEs (“LEAP4SME”). Based on ADENE’s calculations, which combine information from energy audits with information from the national SME Agency (IAPMEI), energy consumption in Portuguese industry is about 2 000 kilotons of oil equivalent (ktoe), 40% of which can be attributed to SMEs.
← 7. Information from the national audit system provides additional information on energy intensity in detailed sectors. So, for example, industrial bread production has an average energy intensity of 0.24 kilos of oil equivalent/euros; leather, 0.27; aluminium, 0.45; and ceramics, 0.63. Further information is available on the website of the SGCIE: https://sgcie.pt/informacao/cadernos-subsetoriais/.
← 8. In textile, for example, electrification offers energy-efficient alternatives to gas-fired boilers and can be used in drying or heating processes, leading to cost savings and reduced environmental impact. Electric heating systems may also enable more controllable and precise temperature regulation, improving the consistency of the product.
← 9. In the services sector, the adoption of the circular economy can also indirectly reduce emissions by lowering the demand for new products.
← 10. See: https://www.dgae.gov.pt/comunicacao/noticias/eficiencia-energetica-nos-edificios-aviso-25.aspx
← 11. Based on information received from ADENE (Portuguese National Energy Agency).
← 12. The green transition challenges of the textile sector are further detailed in chapter 4 of this report (green skills development and adoption of green technologies).
← 13. In the case of Germany, a national incentive programme to acquire the ISO 50001 certification has been a powerful driver.
← 14. The same legislation requires that companies using between 10-85 TJ undertake an energy audit every fourth year by a certified energy auditor, as it happens in Portugal.
← 15. Sweden, which has a similar population to Portugal, has around 250 certified energy auditors.