ESOS is an energy auditing and assessment scheme introduced by the UK government, intended to encourage large enterprises in the UK to focus on being more energy efficient. It is mandatory for organisations which meet the qualification criteria.
If your company qualifies for ESOS, it must undertake an energy assessment and audit every four years and to identify ways to save energy.
ESOS reports are submitted every four years and look ahead to identify potential opportunities to improve energy efficiency in an organisation. ESOS reports should quantify the potential energy and carbon savings, as well as the financial implications of any opportunities to implement energy efficiency measures.
Streamlined Energy and Carbon Reporting (SECR) looks backwards and presents carbon emissions and energy usage for the previous year, within annual financial reporting. Details of any energy efficient actions that have been implemented during the reporting year are also reported, with the idea that the benefits of such actions will show in the organisation’s Intensity Ratio (when compared to previous years’ ratios). If energy efficient actions have been put in place due to recommendations in previous ESOS reports, it is recommended that the ESOS report is referenced within the SECR section of the organisation’s annual report.
The qualification date for ESOS Phase 4 is 31 December 2026.
Currently, ESOS applies to all non-SME (small and medium enterprises) with:
(in the UK or abroad).
or an annual balance sheet of £50m or more.
250 or more employees
This figure is based on an average number
employed in the year
An annual turnover of £44m or more
Some of the main changes for Phase 3 were as follows:
The above changes aimed to strengthen the regulations of the scheme, while ensuring a level of standardisation and quality in ESOS reports going forward.
Calculate the total amount of energy consumed by your organisation – that is used by buildings, manufacturing processes, and transport.
Identify the activities and assets that account for at least 95% of your total energy consumption. Energy Saving Opportunities should also be identified, and their monetary and energy savings calculated/reported as well.
Appoint a lead assessor to review your energy audits and ESOS assessments. This may be an employee or an external approved contractor. A Director’s approval is also needed and if the Lead Assessor is internal, two Director’s signatures are required.
On completing your ESOS assessment, you must then notify the Environment Agency you are compliant with your obligations o MESOS- the government portal.
An evidence pack will need to be compiled keep a record of how you have complied with your obligations.
Produce and submit Action Plan after submitting your report. Provide updates to this in the two following years.
Calculate
Identify
Review
Notify
Record
Action Plan
You can submit a notification via the government’s new online notification system – MESOS
As of Phase 3, this notification now details the total energy audited and extent of savings achievable by implementing the identified opportunities.
As of January 2021, UK installations are no longer in the EU ETS. They are in the UK ETS, which abides by very similar rules and principles.
For more details visit https://www.gov.uk/guidance/energy-savings-opportunity-scheme-esos.
It is expected that as the government aims to align ESOS with the SECR, the qualification thresholds for Phase 4 ESOS are due to change, to match the SECR thresholds.
The new thresholds are expected to be:
This will result in a greater number of participants within the ESOS scheme.
There are further plans to also incorporate a greater focus of net zero within the scheme.
The compliance period for Phase 4 will begin on the 6th of December 2023 with a qualification date of the 31st of December 2026 and a compliance deadline on the 5th of December 2027.
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