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Environment & Sustainability

Successful certification under ISO 50001

Here’s how your company can profit from the international guideline for active and sustainable energy management

An energy management system in line with ISO 50001

6 minutes 04/26/2022

Effective use of resources is an increasingly high-profile issue. The Paris Agreement and the goal of limiting global warming to below 2°C has drawn an enormous amount of attention to the issue in recent years. Achieving this target means a radical reduction in greenhouse gas emissions as well as the decarbonization of value chains. Therefore, companies are faced with the challenge of securing and using cost-effective yet sustainable energy supplies. Active energy management has a decisive role to play in this. The international standard for energy management systems ISO 50001 is a globally recognized and certifiable standard for introducing and maintaining an energy management system. It can be used by organizations of all types and sizes. The objective of an energy management system is to continuously optimize an organization’s energy performance. This is achieved by measuring, monitoring, and controlling energy-consuming processes and systems. The measures derived from these actions help companies make targeted improvements in energy performance. To facilitate this, company management has to provide the necessary resources, define responsibilities, and document processes accordingly. This ensures that companies adopt a forward-looking approach to energy topics and associated legal requirements. It also enables them to generate motivation among their employees and cut their operating costs.

Concrete benefits of an ISO 50001-certified EnMS for your company

The reasons to implement an energy management system in accordance with ISO 50001 speak for themselves, ranging from lower operating costs to improved collaboration between management and employees. The main motivation for most companies to implement an energy management system can be divided into three main categories: Fulfilling legal requirements while also accessing tax and surcharge relief and sinking the company’s energy costs.

Audit obligation pursuant to Article 8 of EU Directive 2012/27/EU

The European Union’s 20-20-20 climate targets and the associated Energy Efficiency Directive have compelled EU member states to make their use of energy 20 % more efficient by the end of 2020. Under Section 8 EDL-G, all companies — except micro-enterprises and small and medium-sized enterprises (SMEs) within the meaning of European Commission Recommendation 2003/361/ EC – are required to conduct an energy audit every four years. This requirement can be met by introducing high-quality energy management systems such as ISO 50001 or, for example, through the EU Eco-Management and Audit Scheme (EMAS). It is expected that the EU-Directive will be revised in 2022 and audit obligations might then only depend on absolute energy consumption and not business size.

Access tax reliefs

The Special Equalization Scheme set down in the German Renewable Energies Act (EEG) aims to reduce EEG surcharges (2021: 6.5 ct/kWh) for companies and rail operators that compete internationally and have intensive energy costs. The ability to access tax and surcharge relief is one of the reasons companies often opt to implement ISO 50001. The EEG surcharge was introduced to finance the expansion of renewable energy through the German Renewable Energies Act (EEG). In order to access surcharge reductions, a company must operate in one of the sectors listed in Annex 4 EEG and have sufficiently high electricity cost intensity (cf. Section 64 para. 1 no. 2 EEG). However, due to the high energy prices in 2022, the German government is likely to completely cancel the EEG surcharge on power.

Reducing energy consumption and costs

In energy-intensive sectors such as primary production (e.g. iron and steel production, paper production, cement works), energy costs exceed 20% of companies’ gross value added. With this in mind, continuously optimizing energy consumption should be a fundamental part of any future-oriented company’s business strategy. By introducing an energy management system in accordance with ISO 50001, companies can pursue this goal over the long term and stay competitive.

Key requirements of ISO 50001

Energy management can take different forms in companies, from one-off energy audits in accordance with DIN EN 16247 to the systematic approach set out in ISO 50001. ISO 50001 is the central standard in the field of energy management and defines the requirements for introducing, implementing, maintaining and improving an EnMS. The Plan-Do-Check-Act (PDCA) approach aims to enable an organization to achieve systematic and continual improvements in energy performance – including energy efficiency, utilization and consumption. The standard defines specific requirements that enable companies to demonstrate a systematic, data- and fact-based improvement of their energy performance. In simple terms: If the current measured value is below the starting value, it means the company has saved energy.

High Level Structure (HLS) of ISO 50001

ISO 50001 differs considerably from its predecessor from 2013 with respect to its structure and also features additional content. These changes relate to the High Level Structure (HLS) for management systems, which was developed in 2012. The HLS relies on consistent terminology and a standardized overarching structure based on the PDCA cycle. It describes a control circuit for a system that continually improves itself. Since 2012, the HLS has been implemented for all other ISO standards governing management standards, for example ISO 9001 (quality management), 14001 (environmental management) or 45001 (occupational health and safety). This makes it easier to implement different management systems due to the similarity between a significant proportion of the required elements and the fact that only certain sections are topic-specific.

The HLS comprises a total of 10 clauses:

  • Clauses 1-3 detail the scope, normative references, terms and definitions. 
  • Clauses 4-10 describe the normative requirements for certification.

PLAN

Clause 4 – Context of the organization: Defining the context of the organization is the first step in establishing a framework for the energy management system. First 
of all, this means analyzing and evaluating internal and external topic areas, such as through a PESTEL analysis (P = political, E = economic, S = social, T = technological, E = environmental, L = legal), along with the associated stakeholders and their interests.

Clause 5 – Leadership: Management bears responsibility for the energy management system. By formulating an energy policy, a company’s management acknowledges its duties and pledges 
to support the EnMS in all respects. Human and financial resources are a key part of this. In most cases, management appoints one person to oversee the development and maintenance of the EnMS and monitor the system in partnership with the energy team.

Clause 6 – Planning: Strategic planning involves a comprehensive analysis of risks and opportunities; to prepare the organization accordingly for future negative or positive events.

DO

Clause 7 – Support: For an energy management system to achieve its full potential, support processes are vital. These include human, financial and material resources that are planned by the energy team and must be provided by company management.

Clause 8 – Operation: As part of the energy management system, companies must define criteria for all processes that influence the energy performance of SEUs, raise awareness among relevant employees regarding these processes, and subsequently control them. In practice, this entails procedural and operating instructions for management processes such as conducting internal audits, plus instructions on energy-efficient system operation and system maintenance.

CHECK

Clause 9 – Performance evaluation: In the Check phase, the aim is to review whether planned elements such as action plans and energy forecasts have been realized as hoped. The results of the performance evaluation of management, core and support processes forms the basis of the continual improvement process, as the only way to improve the performance of an energy management system is to uncover and rectify weaknesses. This assessment is conducted on different levels and based on specific criteria in the EnMS. The technical elements of the performance evaluation involve monitoring, analyzing and evaluating energy performance, e.g. the power consumption of system X. The energy performance indicators that facilitate this evaluation are typically recorded in a software solution and are continually analyzed and assessed by the energy team.

ACT

Clause 10 – Improvement: The ACT phase focuses on handling deviations and nonconformities in the energy management system. These issues can emerge in the course of regular reviews, monitoring and audits, management reviews, or in day-to-day operations. Translating nonconformities into improvements requires corrective action. This begins with immediate action and then moves on to an analysis of the causes to prevent such issues from arising in future. It is vital that you review the efficacy of these remedial measures and adjust them if necessary. The purpose of this to achieve continual improvement of the energy management system. However, it might be difficult to ensure continuous improvement in some circumstances, such as if a company has already achieved quick wins in the first years of operating a EnMS and further measures are either hard to implement from a technical or an economic perspective. In this case it is beneficial to seek external assistance to get access to sector-specific best practices and available funding or subsidies.

Your path to certification under ISO 50001

Obtaining certification for your energy management system requires an external audit, in which an independent third party assesses the conformity of your company’s EnMS against the standard and, if successful, issues a certificate, which can then be used for external and internal communication. Certification of an energy management system is a two-stage process following the principles of ISO 19011.

  • The first stage is an analysis of documented information. If this review shows that the energy management system generally meets the eligibility requirements for certification, then the audit proceeds to Stage 2.
  • In the second stage, the auditor conducts an on-site audit along with interviews, site inspections and in-depth document reviews.

The audit duration is guided by ISO 50003 and depends on the organization’s size, its energy consumption, and its level of complexity. Once issued, certification is valid for a period of three years. A surveillance audit is conducted after the first and second years. At the end of the certification period, the system undergoes a recertification audit and a new cycle begins. As a fundamental rule, companies have a free choice of external auditor. The costs of a three-year certification cycle are at least € 10,000.

Checklist ISO 50001 Certification

  • Document review

    (Remote) review of documented information to determine whether the EnMS is eligible for certification

  • On-site audit

    Examination of documented information to determine whether it reasonably reflects actual practice and the standard's requirements

  • Resolution of deviations

    If the audit identifies deviations, the organization must correct these by a set deadline

  • Certification issued

    You receive a certificate as evidence

  • Surveillance audit

    The status of the EnMS is audited annually for the first two years of the cycle

  • Recertification audit

    Certification expires after three years and must then be renewed

Working towards sustainability

Introducing and operating an energy management system in accordance with ISO 50001 can be the first step for companies towards climate protection and sustainability. They can achieve this above all by increasing their energy efficiency, replacing fossil fuels, and, in some cases, by changing their predominant consumption pattern. After a period of time, many companies reach a point at which they have achieved quick wins and further measures appear uneconomical.

At this point, it is worthwhile to begin optimizing the value chain beyond the boundaries of the company itself as well as non-energy related environmental aspects. This broader focus is the domain of environmental management systems in accordance with ISO 14001 or EMAS could address. You could go one step further by committing to sustainability in a commercial context. An associated topic is corporate social responsibility (CSR), which is based on sustainable business with regard to economic, environmental and social aspects.

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