The Energy Savings Opportunity Scheme (ESOS) is mandatory for all obligated large undertakings and their corporate groups. Large organisations are required to assess energy use and identify opportunities to save energy.
Why was ESOS introduced?
- To help the EU to reduce its carbon emissions by 20% by 2020
- £1.6 billion net benefit to the economy (large opportunity for businesses to save money)
What are the key dates for ESOS?
Phase 1:
- Qualification date: 31 December 2014
- Compliance date: 5 December 2015
Phase 2:
- Qualification date: 31 December 2018
- Compliance date: 5 December 2019
Phase 3:
- Qualification date: 31 December 2022
- Compliance date: 5 December 2023
Who is obligated under ESOS?
Phase 2:
- Employs 250 or more staff or
- Turnover over £44,845,000 AND balance sheet over £38,566,700
Phase 3:
- Employs 250 or more staff or
- Turnover over £44m AND balance sheet over £38m
What are the routes to compliance?
- ISO 50001 certification
- Display Energy Certificates (DECs)
- Green Deal Assessments (GDAs)
- ESOS compliant energy audits
What is required to comply?
For the energy audit route:
- Appoint a Lead Assessor
- Report all energy use including electricity, heating, fuel for fleet
- Conduct energy audit to identify energy saving measures
- Achieve sign off from a company Director
- Report to Environment Agency
- Maintain a pack of evidence including invoices, calculations, etc
What is a lead assessor?
A Lead Assessor is an experienced energy management professional. Lead Assessors must be members of an approved register. Lead Assessors will oversee your ESOS assessment and conduct onsite audits. They will also sign off your overall ESOS assessment.
What energy data needs to be included?
- Electricity
- Gas
- Combustible fuels
- Renewable energy
- Fuel used in transport
- There are no fuel type exemptions in ESOS
What is the reference year?
A period of 12 consecutive months including the qualification date for the relevant phase e.g. phase 2 needs to include 31 December 2018.
What is the de-minimis?
You must identify assets and activities that amount to at least 90% of your total energy consumption – you can exclude up to 10% of total energy consumption from any audit or alternative compliance measures. This is your ‘de minimis energy consumption’.
How does ESOS work for company groups?
The responsibility for ESOS notification lies with the highest UK parent company; if one organisation in your corporate group exceeds the ESOS thresholds the whole group will be required to comply.
What are the penalties for non-compliance?
Failure to comply with ESOS could result in fines up to £50,000 and / or an additional fine of £500 per day until compliance is complete for a maximum of 80 days. Non-complying companies will also be publicly named by the Environment Agency.
What do I do if I’ve missed the compliance deadline date?
We can help you become compliant with ESOS quickly and efficiently. Don't delay - call our expert ESOS team today on 01756 794 951 or email carbon@complydirect.com if you would like to discuss steps toward achieving compliance.
What do I do if I’ve received an enforcement notice?
If you have received an enforcement notice, contact us to learn more about our free confidential compliance identification service. We can help you identify if you need to comply, and help you take steps to ensure compliance where required. If you are obligated and yet to comply, the more proactive you are the better, so you can mitigate potential fines from the Environment Agency.
How does ESOS differ from SECR?
Streamlined Energy & Carbon Reporting (SECR) has different thresholds, so can obligate companies who are not also required to comply with ESOS. You can view the SECR thresholds HERE.
In addition, ESOS is regulated by the Environment Agency whereas SECR is regulated by the Financial Reporting Council and Companies House. Both bodies have the power to fine companies for not meeting their obligations in relation to these areas, however, the Environment Agency notify businesses who are not compliant with ESOS but for SECR, there is not a notification system and Financial Reporting Council Conduct Committee has the power to apply for a court order requiring Directors to prepare a revised report/set of accounts where the relevant disclosures have not been provided.
