The European Union’s revised Energy Efficiency Directive (EED) places binding energy reduction targets on member states to accelerate decarbonization. To meet these goals without imposing direct financial penalties on industrial and commercial sectors, several European nations utilize market-based compliance tools known as Energy Efficiency Certificates (EECs), or White Certificates.

These certificates are issued to entities that successfully implement eligible energy-saving projects, with each certificate representing a specific unit of saved energy, typically measured in kilowatt-hours or tonnes of oil equivalent. While countries like France (with the CEE system) and Italy (with the TEE system) have long-standing frameworks, Spain is reshaping the Southern European market with its newly established energy efficiency system.

Coordinated by the Ministry for the Ecological Transition (MITECO), the Spanish framework relies on Certificados de Ahorro Energético (CAEs) to drive energy efficiency and create a new revenue stream for businesses.

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Understanding the Spanish CAE Framework

Spain’s CAE system represents a flexible, market-driven mechanism designed to monetize energy savings. The concept is straightforward:

• A CAE is an electronic certificate that confirms the saving of 1 kilowatt-hour (kWh) of final energy from a verified energy efficiency project.

• The calculation is direct: If an industrial facility implements a heat recovery project that saves 500,000 kWh of energy per year, that project is eligible to generate 500,000 CAEs.

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The demand for these certificates is driven by obligated entities, which include large energy supply companies, utilities, and fuel distributors. Depending on the scale of their commercial activities, these obligated parties are legally required by the government to achieve a specific volume of energy savings each year.

To satisfy this annual obligation, companies have two options:

1. Make a direct financial contribution to the National Energy Efficiency Fund (FNEE) at a set, non-negotiable fee.

2. Submit CAEs to the registry, either by implementing their own energy efficiency projects or by purchasing CAEs on the secondary market.

Because the market price of a CAE is lower than the fixed fee required by the national fund, purchasing certificates from third-party project developers offers obligated entities a significant financial discount to meet their compliance requirements.

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A Dual-Sided Market: Who Benefits?

The CAE system creates a highly lucrative, dual-sided market that benefits both the companies implementing efficiency upgrades and the energy suppliers seeking compliance.

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For Project Owners and Installers

Any business that invests in energy-saving technologies can convert its physical savings into a tradeable asset. Eligible projects span a wide variety of industrial and commercial applications, including:

• Upgrading to modern, high-efficiency manufacturing equipment.

• Replacing legacy lighting systems with advanced LED installations.

• Installing high-performance thermal insulation in commercial buildings.

By verifying these savings and converting them into CAEs, project owners can sell their certificates to obligated parties, allowing them to recover a substantial portion of their initial capital investment.

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For Obligated Entities

Energy suppliers must navigate strict, annual conservation targets. Sourcing CAEs from external project developers allows these companies to fulfill their regulatory obligations at a lower cost than making direct payments to the FNEE fund. This compliance-driven trading system supports a cost-effective delivery of national energy savings.

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Seamless Compliance and Monetization with AFS Energy

AFS Energy is a liquidity provider in the market, helping to match supply and demand in the CAE market. For obligated entities, we leverage our extensive primary and secondary market networks to source high-volume CAEs, helping you identify the most cost-effective savings opportunities to meet your annual targets. On the other hand, we also help project developers find the best buyer and negotiate the best value for the savings they generated.

To learn how to monetize your energy-saving projects or optimize your compliance costs in Spain, France, or Italy, visit our Energy Efficiency Certificates (EECs) solutions page and speak with an advisor today.