Energy Saving Opportunity Scheme (ESOS) Phase 4 Compliance

Following the outcome of the UK’s Government’s Energy Saving Opportunity Scheme consultation, a number of changes were made to enhance the quality of the compliance and increase the carbon and cost saving made. In addition to these changes, the Government discussed what may be included in Phase 4 of the scheme.

Who needs to comply with ESOS?

Companies will need to comply with ESOS Phase 4 if they are:

  • Registered or based in the UK or a UK establishment
  • Employ 250 people or more or
  • Have an annual turnover greater than £36m,
  • or an annual balance sheet greater than £18m

From Phase 4 onwards, the Government will change the ESOS balance sheet and turnover thresholds to align with the Streamlined Energy and Carbon Reporting (SECR), requiring more organisations to report on their ESOS. Organisations that are part of a corporate group which contains at least one large undertaking will also continue to be in scope.

To support the UK Government’s target to be Net Zero by 2050, Phase 4 will focus on how organisations are addressing energy efficiency AND net zero. ESOS Phase 4 will include:

  • Identifying potential risks to organisations in moving to net zero and emission reduction trajectories
  • Information to support organisations in creating a net zero plan or helping them to meet their existing carbon reduction strategies
  • Increased clarity and guidance on site audit sampling, including most likely a minimum threshold for both the number of buildings audited and percentage of total energy consumption sampled.
  • Reports will need to meet either ISO 50002 or EN 16247 auditing standards. Currently, this is only a recommendation in Phase 3 guidance.
  • Display Energy Certificates (DEC) and Green Deal Assessments will be removed as a route to compliance.
  • For organisations not in scope for SECR, a reporting function on the ESOS web portal will be developed to allow for annual progress reporting. From Phase 4 onwards a requirement will be introduced that if the goal has not been met, the participant must explain why.
  • Following SECR, it will become mandatory for some data, such as a minimum energy or carbon reduction targets and net zero assessments to be made public.
  • ESOS reports will be required to improve the collection and monitoring of energy data, setting of controls, and appropriate staff training, both within the descriptive element of the ESOS report and within audit recommendations.
  • Ensuring that businesses are alert to their future electricity demand in the context of system impact will be considered as part of the net zero assessment from the Phase 4 compliance period.

Our expert energy consultants are knowledgeable and up to date with ESOS compliance legislation and what will be required from organisations. Throughout your review we will help you collate data for your building, transport, and process energy use, analysing the data and reviewing your portfolio.

We will carry out your building’s energy surveys, produce the ESOS survey reports and ensure you can maximise the benefits of the scheme through conducting the ESOS review, verification and sign off. Our team of lead assessors will include any necessary changes to your audit and report introduced to the scheme by the Environment Agency.

The compliance year for ESOS Phase 4 is 2027, however it is never too early to get started, site energy audits can start from January 2024. If you need support with any of the ESOS Phases, our team will help guarantee your compliance.

If a qualifying organisation misses the deadline, they can expect to receive a basic fine of £50,000, plus an additional fine of £800 per day up to a maximum of 80 days.

For more information, you can speak to a member of the team on 01908 690018 or contact us online and we will get in touch with a quote.

Speak to an ESOS Consultant

Call 01908 036 488 to find out how our consultants can help you make the most of ESOS

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