July 6

The challenges of compliance regulation in the EU and how to meet them


As Europe feels the pinch of the energy crisis, the European Commission (EC) responded by doubling down on its long-term goals for the regional bloc: locally-produced renewable energy that can replace imported fossil fuel energy. 

However, meeting these goals is not as simple as it seems. 

Creating a carbon-neutral Europe requires a massive upgrade to renewable energy infrastructure in power generation, industry, and transport, a complicated task given that many large organisations need time and resources to make the required changes to their infrastructure. 

Yet, the EC continues to announce ambitious goals for the future while shrinking the timeline to accomplish them. 

For example, the Commission proposed to increase the 2030 target for renewable energy production from 40% to 45% under the ‘Fitfor55’ package, placing significant strain on organisations to adjust their infrastructure to produce or consume renewable energy while giving them a smaller timeframe in which to do it. 

This, as you can imagine, leads to several challenges in compliance regulation for any company operating within the EU.

Hence, we will reveal some of the challenges organisations might be facing when meeting compliance requirements and how to tackle them successfully.

What is hampering the increase in renewable energy consumption and production?

With the drive for greater energy efficiency and higher renewable energy production, organisations are facing compliance-oriented challenges that could raise operating costs and  lead to costly fines and a loss of accreditation. Here are some of the challenges they might be facing. 

Rising targets force organisations to reassess internal operations

As the EU continues to revise current renewable energy targets and launch new ones, it becomes difficult to track the rules and procedures. 

For example, the EU first launched the Green Deal with the aim of becoming the first carbon-neutral continent by 2050. However, in July 2021, the Commission launched the Fit for 55 strategy that further revised energy targets. Then, additional rules came forward in October 2021 with the Energy Price Toolbox. Finally, the recent geopolitical crisis in Europe prompted the EC to introduce the REPoperEU package to provide companies and households with affordable energy.

A constantly evolving regulatory framework makes compliance more costly and challenging for organisations.

Thanks to an expanding compliance framework, organisations find themselves constantly assessing the EC rulings for new updates on an already expansive regulatory ruleset and determining how they could impact internal operations. 

All these actions drive up the cost of compliance management. 

Regulatory teams are responsible for assessing how updates could change operations and relay these findings to different business units, taking time and compromising efficiency. 

With compliance processes taking more time to complete, it can hamper an organisation’s ability to adapt to a rapidly evolving climate, increasing the risk of costly compliance violations and penalties. 

Strict permit procedures restrict participation

Projects that support energy transition take years to develop due to planning and permission requirements. However, as regulation becomes more stringent, we can expect the amount of work required to obtain the necessary permissions to increase. 

This will make it harder for some organisations to make a timely transition from fossil-fuel-based energy to renewable energy, which is quite concerning given that the EC has established a tight deadline to make the transition. 

To resolve the problem, the commission has designated member states to assign permits quickly in certain areas. However, this quick-fix solution might find objections from various third parties on the grounds that it could compromise the environment. 

This puts organisations in a difficult position where they must spend more on obtaining the necessary permits. But on the other hand, failing to get the necessary permits could mean they don’t make a successful transition to renewable energy, leading to severe violations down the line. 

To obtain permits, organisations need to assess their internal operations to ensure they can meet the staunch requirements set out in the permit, which could raise operating costs.

What is the best way to overcome these challenges?

As compliance regulation becomes more complex, the best solution is to invest in an automated energy compliance management platform. 

These platforms can help organisations streamline complex energy compliance functions to reduce operating costs and empower regulatory teams with the tools to conduct rapid assessments and ensure that internal operations are in line with industry regulations. 

This makes it easier to find compliance gaps and assign actions to relevant individuals, which prevents violations and reduces penalty risks. 

Moreover, energy regulatory compliance software makes it easier to obtain the latest regulatory alerts from the EU and integrate them into internal operations, which makes a complex operation more efficient and cost-effective.

With energy regulation becoming more demanding, automating all or part of the compliance management process can help you meet the challenges of compliance regulation in the EU.


Compliance Regulation, EU Compliance Regulation

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