ESOS: Navigating the new requirements

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment program introduced by the UK government, aimed at promoting energy efficiency and reducing greenhouse gas emissions within large organisations. Established under the EU Energy Efficiency Directive, ESOS requires large enterprises to undertake comprehensive assessments of their energy usage across buildings, industrial processes, and transport every four years.

Whilst phases 1 and 2 simply had reporting requirements every 4 years with a break in between, ESOS Phase 3 brings significant changes, demanding more from participants. Gone are the days of merely identifying energy-saving opportunities – now, it’s about demonstrating commitment.

What’s Changed?

What does this mean for participants? 

ESOS Evolution

The table below shows the different ESOS phases, key dates and reporting requirements:

*Deadline extended

Start date:

This is the start date of each ESOS phase. Any audits used for each ESOS report and submission must have taken place after the start date. This prevents businesses from relying on outdated audits and ensures that sites are physically audited by a qualified lead assessor at least once every 4 years.

End Date (Qualification Date):

The end date for each phase also serves as the qualification date. This qualification date is a point in time where staff numbers, turnover, and balance sheet should be measured to decide whether an organisation needs to comply with that ESOS phase.

Qualification for every phase so far has been set at the following:

It is worth noting that these levels have remained the same since the inception of the ESOS scheme, which means that more companies are dragged into the scheme each phase due to inflationary increases in monetary terms, while the thresholds remain the same.

Reference Period:

All ESOS report submissions should use 12 months of data and this data must come from within the reference period.

ESOS Report Submission:

Every 4 years, organisations that meet the qualification criteria must audit sites, analyse energy data, and create a standard report in a specific format. All of these tasks need to be carried out and/or signed off by a qualified ESOS lead assessor. The report must also be signed off by a director of the organisation and the Environment Agency (EA) must be notified by the specified deadline for that phase.

Action Plan

From Phase 3 onwards, ESOS includes additional compliance stages post-submission of the compliance notification; the ESOS action plan and the ESOS annual progress updates. The action plan must be signed off by a board-level director (or equivalent) and submitted via the compliance notification system by the action plan deadline for the third compliance period, which is 5th December 2024.

Action Plan Contents

Required Information

Additional Inclusions (Optional)

Annual Progress Updates

Following the submission of the action plan, organisations must then submit annual progress updates against their action plan commitments in the 2 subsequent years. This means that the annual reporting pattern is; ESOS Report Submission > Action Plan Submission > Progress Update > Progress Update > ESOS Report Submission, and so on. 

As with the ESOS report, and action plan, the progress updates must be signed off by a board-level director (or equivalent), and submitted via the notification system, where it will be published.

Each annual progress update must include a list of all the energy-saving actions detailed in the action plan submitted.

For projects from the list that have been implemented during the 12 months prior to the update deadline:

Additional Information (Optional): 

For projects from the list that have not been implemented, participants will need to include:

In the first progress update (due December 2025), participants should also include actions taken between the compliance date and the action plan deadline (6 December 2023 onwards). For the second progress update, participants should provide additional estimates of savings from actions reported in the first progress update.

Summary

Ensure your business meets the new ESOS requirements by implementing a structured approach to your energy efficiency and reporting. With the new emphasis on continuous reporting and board-level involvement, your action plan and annual progress updates are crucial for compliance and achieving substantial energy and cost savings. Our specialists are here to guide you through the enhanced requirements, helping your business navigate the new complexities and secure ongoing compliance. Reach out for expert assistance with your ESOS obligations.