In October 2012, the European Parliament and Council adopted the Energy Efficiency Directive (EED) to provide a stronger legal framework for Member States, energy companies, businesses, and consumers to capture a growing fraction of the cost-effective energy efficiency potential still untapped in European economies. This Policy Memorandum addresses some of the leading questions Members States and the European Commission will face in interpreting and applying the Energy Efficiency Obligation provisions in the EED. Here RAP sets out how energy savings arising from Energy Efficiency Obligations should be credited to the incremental annual 1.5% targets, and clarify the differences between the flexibility provisions and the early action credit provisions contained in Article 7 and Annex V of the Directive.