An agreement on energy savings at distribution and retail level requires member states to draw up national action plans on energy savings. However, the 1% annual savings target remains non-binding.

The European Parliament and the Council of Ministers on 6 December reached a compromise on a directive aimed at increasing energy savings from operators all along the electricity and gas supply and distribution chain right up to the delivery point. The agreement is expected to win formal approval from both institutions before the end of the year.

The compromise text requires member states to draw up national action plans to achieve a 1% yearly energy savings in a wide-ranging number of sectors including agriculture, household heating and transport. The target is only indicative but the national plans will have to be submitted to the Commission for approval and will be reviewed every three years. The process will be spread over nine years, starting in January 2007.

"With this initiative, each citizen will be able to see what is actually really done and the Commission can take further measures in case the member states 'action plans' would not be sufficient," said Mechtild Rothe MEP (Germany, PES) who was steering the dossier through Parliament.

The issue of targets has remained central to discussions on the draft energy end-use efficiency and energy services directive. Member states have repeatedly stated their preference for non-binding targets and a flexible approach while Parliament had supported higher, legally binding targets.

The directive is chiefly addressed to "energy distributors, distribution system operators and retail energy sales companies" of large size. Member states "may" therefore exclude small distributors, small distribution system operators and small retail energy sales companies from the measures.