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Energy Savings
Scheme (ESOS)

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 those organisations which meet the qualification criteria.

If your company qualifies for the Energy Savings Opportunity Scheme (ESOS), it must undertake an energy assessment and audit every four years and to identify ways to save energy.

The Energy Savings Opportunity Scheme (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 saving, as well as the financial implications of any potential opportunities to implement energy efficiency measures.

Streamlined Energy and Carbon Reporting is annual and looks backwards and details any energy efficient actions that have been implemented during the reporting year, 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 3 was the 31st of December 2022. The Energy Savings Opportunity Scheme (ESOS) applies to all non-SME (small and medium enterprises) with:

250 or more employees

(in the UK or abroad).
This figure is based on an average number
employed in the year

An annual turnover of €50m

(£44,845,000) or more, or an annual balance sheet exceeding of €43m (£33,566,700) for Phase 3, or an annual turnover of £44 million or more, and an annual balance sheet of £38 million or more

As stated within the 2022 Strengthening the Energy Savings Opportunity Scheme (ESOS): Government Response, the requirements for Phase 4 ESOS have now changed.

The main purpose of these changes is to strengthen the regulations of the scheme to ensure a level of standardisation and quality in ESOS reports going forward.

Some of the main changes set out by the government are as follows:

  • A summary template which includes compliance information must be included within the ESOS report.
  • Additional information as stated by the Environment Agency must be included within the compliance notification.
  • It is now compulsory to include energy intensity metrics within reports.
  • The de minimis exemption has now changed from 10% to 5%, which means that a participant’s report must cover at least 95% of their total energy consumption.
  • Where an ESOS participant is part of a corporate group, the ESOS report must now be shared with subsidiaries.
  • Participants must create an action plan or set targets following the Phase 3 compliance deadline, however this must be reported against within the participant’s Phase 4 ESOS report.
  • Reports must provide greater details on how and when recommendations should be implemented.

It is important to note that these proposed changes are subject to legislative scrutiny and timetable, as the enabling primary legislation (The Energy Bill) is currently passing through Parliament.

Once the bill has received Royal Assent, further government guidance will be published on these changes.

However, the draft regulations which encompass these changes have been published, to allow for participants to prepare for their enforcement.

Has the compliance deadline for Phase 3 ESOS changed?

Yes, the compliance deadline for Phase 3 ESOS has changed. The original deadline was the 5th of December 2023; however, this has now been postponed until the 5th of June 2024.

This extension has been granted to allow for necessary time for participants to meet the new ESOS Phase 3 requirements.


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.


Appoint a lead assessor to carry out and review your energy audits and ESOS assessments.
This may be an employee or an external approved contractor.


On completing your ESOS assessment, you must then notify the Environment Agency you are compliant with your obligations.


An evidence pack will need to be compiled keep a record of how you have complied with your obligations.

Under the regulations, it is mandatory that a notification of compliance is submitted to the Environment Agency to prove that you have complied with the regulations.

You can submit a notification via the government’s online notification system.

However, notifications of compliance cannot yet be submitted until the Phase 3 legislation changes have been finalised, as the online system will need to be updated to incorporate these changes.

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:

  • 250 or more employees
  • A balance sheet of at least £18 million
  • Or a turnover of at least £36 million.

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.

If you qualify for the Energy Savings and Opportunity Scheme, and your organisation has fully achieved ISO 50001 certification, you do not need to carry out an ESOS assessment and you will be considered to have met your ESOS obligations. You just need to notify the Environment Agency.
Swan Energy Know How
We help our clients to gain the most out of the Energy Savings Opportunity Scheme (ESOS), and take the headache out of compliance.