The economics of energy efficiency programmes have been subject to considerable academic debate lasting well over three decades now. In this paper, we contribute to this debate by reviewing the costs and benefits of a specific type of policy+ instrument that recently gained significant traction in Europe – Energy Efficiency Obligations - EEOs. Following the introduction of the EU Energy Efficiency Directive in 2012 the number of EEOs in Europe has grown from five schemes to now 16 EEOs in operation or planned across the EU.

In 2009, the European Union adopted high-level goals for renewable energy, energy efficiency, and greenhouse gas reductions with targets set toward the year 2020. This was followed in 2012 by adoption of the Energy Efficiency Directive (EED) (2012/27/EU), which included as a major component a requirement for Member States to create Energy Efficiency Obligations Schemes (EEOSs) on energy companies or equivalent alternative measures, and those provisions have now been in effect for three years.