Draft UC121: what the Energy Law amendment means for district heating

On 19 May 2026 the Ministry of Energy sent draft UC121 — an amendment to the Energy Law implementing the EED directive for district heating — for public consultation. Below: what the draft actually changes for district heating companies and local authorities.

UC121 is largely the completion of transposition — implementing the Energy Efficiency Directive (EED, 2023/1791) and related RED III provisions. Some of the rules are already in force; the draft fills the gaps and, more importantly, hardens the timeline. The public consultation runs for 21 days, and the draft is available in the Government Legislation Centre.

Efficient-system status — a moving target, not a label

The definition of an "efficient district heating system" takes on successive, progressively stricter forms: until the end of 2027 — at least 50% renewables, 50% waste heat, 75% cogenerated heat or 50% of a combination; ultimately, from 2050 — only renewables and waste heat. New is an alternative emissions criterion: up to 100 kg CO₂/MWh from 2035, 50 kg from 2045, 0 kg from 2050. The emissions route is optional — it requires an application to the minister submitted at least 12 months in advance.

A plan for inefficient systems

Operators of systems above 5 MW that do not meet the efficient-system criteria will, every five years (by 31 March), prepare a compliance plan — more efficient primary energy use, reduced distribution losses, a higher renewables share — agreed with the President of the Energy Regulatory Office and incorporated into the development plan.

Gas: the window closes in 2030

New generation units in efficient systems may not use fossil fuels — except gas units whose construction or significant modernisation is completed by 31 December 2030. After that date, no new gas. For cogeneration, a threshold of 270 kg CO₂/MWh has been introduced.

Cost-benefit analyses — a wider catalogue

The obligation will cover thermal installations above 10 MW, industrial installations above 8 MW, service-infrastructure facilities above 7 MW and data centres above 1 MW — the latter will have to recover waste heat unless an analysis shows this to be uneconomic.

Local authorities: from "assumptions" to binding plans

The draft replaces "plan assumptions" with a mandatory heat, electricity and gas supply plan. In municipalities above 45,000 inhabitants the plan must include a separate heating and cooling part — including mapping the potential for low-temperature networks, cogeneration, waste heat and renewables. Municipalities without a current plan will have 18 months to adopt one.

What it means in practice

UC121 is not a revolution — it is the completion of the EED. It does, however, change the nature of the "efficient district heating system": from a label into a moving target with hard dates. The practical takeaway for an operator: you need to know today which route — share-based or emissions-based — the system will take, and in which year, because the emissions route requires an application a year in advance, and the window for new gas closes unconditionally in 2030. Efficient-system status is at the same time a condition of access to public funding — which is why the compliance of investment plans with these criteria is worth assessing before decisions are made.