From Compliance to Impact: Institutional Design and Effectiveness of Energy Efficiency Obligation Schemes in the EU – Insights from Croatia

Energy Efficiency Obligation Schemes (EEOS) remain a central instrument for delivering Article 8 targets under the recast Energy Efficiency Directive (EED). With the Fit for 55 package significantly increasing annual savings rates and introducing new requirements related to energy poverty and fossil fuel exclusion, questions arise regarding the structural effectiveness of existing schemes across the EU. This work examines whether compliance with EDD requirements for EEOS actually translates into meaningful, long-term decarbonization outcomes.
Using evidence from the ENSMOV Plus project and a detailed case study of Croatia, this work develops an institutional-performance framework linking EEOS design features - such as buy-out mechanisms, eligible measures, trading structures, and monitoring and verification (M&V) systems - to behavioral responses by obligated parties and the resulting quality of delivered savings.
The Croatian case reveals a pattern of compliance-driven optimization: while the EEOS contributes substantially to national savings targets, the majority of reported savings stem from short-lifetime, low-investment measures. Structural renovation measures (both for buildings and industrial processes) and energy poverty incentives remain underutilized, and the absence of an organized trading market limits innovation and energy services market development. Recent reforms, including upgrades to the national monitoring and verification platform and discussions on redesigning the buy-out mechanism, indicate recognition of these structural challenges.
The work concludes by proposing policy adjustments to strengthen the transformative potential of EEOS, including lifetime-weighted savings, enhanced trading transparency, and stronger integration with energy poverty objectives. The analysis contributes to the ongoing debate on whether EEOS function primarily as compliance instruments or as genuine drivers of energy systems transformation. By moving beyond target achievement metrics toward a qualitative assessment of institutional effectiveness, this analysis contributes to the broader evaluation on market-based energy efficiency instruments and offers practical insights for policymakers revising EEOS frameworks under the new EED.