February 2024 update
Phase 4 changes
The government has decided to postpone some changes announced in the previous governments response to the ESOS consultation. See below for full details of which changes will and will not go ahead in Phase 4 compliance deadline 5 December 2027. Action plans
Participants should note that the deadline for submitting an action plan for the third compliance period passed on 5 December 2024. Action plans can still be submitted after this deadline via the Manage your ESOS reporting system.
No remedial actions will be considered for action plans submitted up until 5 March 2025. ESOS latest updates
Phase 4 changes
The following changes announced in the previous governments response to the ESOS consultation will not go ahead for Phase 4
Following delays to the introduction of Phase 3 legislation and guidance, and in order to give sufficient time for such a major change to ESOS, the new government has decided to postpone the introduction of net zero requirements until Phase 5. The following changes announced in the previous governments response to the ESOS consultation are intended to go ahead for Phase 4, subject to parliamentary time and scrutiny
Further details of these changes will be provided in due course. These changes and full guidance, as well as the necessary changes to the Manage your ESOS reporting system are planned to be in place by early 2027 in advance of the notification of compliance deadline for Phase 4, which is 5 December 2027. Publication of new PAS standards
On 7 February the British Standards Institution BSI published two new standards which were referenced in the government response to the ESOS consultation
Participants will be able to use these standards on a voluntary basis for ESOS compliance. Further guidance on voluntary use of these standards will be published in due course. The existing competency standard, PAS 512152014 Energy efficiency assessment Competence of a lead energy assessor Specification, will continue to be used as the competency standard for ESOS lead assessors for Phase 4. The new PAS 51215-22025 competency standard can be used on a voluntary basis by organisations wanting to determine whether an assessor is suitable to carry out an assessment according to PAS 51215-12025. ESOS action plan
If you were required to submit a notification of compliance for the third compliance period deadline 5 June 2024, you must also submit an action plan and progress updates during the subsequent relevant compliance period. If you did not qualify for ESOS for the third compliance period, you do not need to complete an action plan or progress updates in the subsequent compliance period. For details about ESOS action plans, see Section 12 in the full guidance. The action plan must be signed off by a board level director or equivalent, and submitted via the Manage your ESOS reporting system by the action plan deadline. For the third compliance period this deadline was 5 December 2024, which has now passed. If you have not yet submitted an action plan, you can still submit this using the Manage your ESOS reporting system. No remedial actions will be considered for action plans submitted up until 5 March 2025. Start your action plan now
Annual progress updates
Following submission of the action plan, you must submit an annual progress update against your action plan commitments in the 2 subsequent years. The deadline for submitting an annual progress update is 12 months after the action plan deadline, and then 12 months after the submission deadline for the first progress update. For the third compliance period, the deadlines are 5 December 2025 and 5 December 2026. The progress update must be signed off by a board level director or equivalent, and submitted via the Manage your ESOS reporting system. For full details of ESOS annual progress updates, see Section 13 of the guidance. About the Energy Savings Opportunity Scheme ESOS
ESOS is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. The Environment Agency is the UK scheme administrator. Organisations that qualify for ESOS must carry out ESOS assessments every 4 years. These assessments are audits of the energy used by their buildings, industrial processes and transport. The ESOS audit is designed to identify tailored and cost-effective measures to allow participating businesses to save energy and achieve carbon and cost savings. The audit costs are estimated to be significantly outweighed by the savings from implementing the recommendations. For full details of how to comply with ESOS requirements see
The guidance works alongside the legislation to help participants understand the requirements, but the ultimate source of ESOS requirements is the legislation. Find out if you qualify for ESOS phase 3
ESOS applies to large UK undertakings and their corporate groups. It mainly affects businesses but can also apply to not-for-profit bodies and any other non-public sector undertakings that are large enough to meet the qualification criteria. Your organisation qualified for the third compliance period ESOS phase 3 if, on 31 December 2022, it met the ESOS definition of a large undertaking. Corporate groups qualify if at least one UK group member meets the ESOS definition of a large undertaking. UK registered establishments of an overseas company will also need to take part in ESOS regardless of their size if any other part of their global corporate group activities in the UK meet the ESOS qualifying criteria. For organisations very close to the qualification threshold or which have substantially increased or decreased in size in recent years, read the full guidance on complying with ESOS. This includes additional information on how to assess if you qualify. Public sector organisations do not usually need to comply with ESOS. For more information on organisations that do not need to comply, see section 1.2 of the full guidance on complying with ESOS
Large undertakings
For the qualification date for the third compliance period of ESOS 31 December 2022 a large undertaking is any UK company that either
A person is employed by an undertaking if they are
An employee is a person employed under contracts of service. Their contracted hours and status full time or part time are irrelevant to their classification as an employee.
For further guidance on who qualifies for ESOS, see section 1 in the full guidance. Deadlines for ESOS compliance
Organisations that qualify for ESOS must notify the Environment Agency by a set deadline that they have complied with their ESOS obligations. The deadline for submitting a notification of compliance for phase 3 of ESOS was 5 June 2024. Any organisation that qualified for phase 3 of ESOS and has failed to submit a notification of compliance is now at risk of enforcement action and should contact the Environment Agency immediately. The qualification thresholds and date for phase 3 have not been changed phase 3 of ESOS still applies to all organisations and their corporate groups that were classed as large undertakings on 31 December 2022. Organisations that qualified for ESOS in Phase 3 will be required to comply with the Energy Savings Opportunities Scheme Amendment Regulations 2023. Changes include
ESOS regulation and penalties
Your environmental regulator is responsible for compliance and enforcement activities. It may issue civil sanctions including financial penalties if an organisation does not meet the schemes obligations. Read the Environment Agencys approach to ESOS regulation and penalties in their enforcement and sanctions policy annex 2, section D. Other scheme regulators apply a similar approach - see section 15 of the full guidance. A summary of the penalties imposed is available on data.gov.uk. If you do not qualify for ESOS phase 3
If you have been contacted by the Environment Agency in the past, or you qualified for phase 1 andor phase 2 but not for phase 3, you need to tell the Environment Agency you do not qualify. Complete an ESOS assessment
Completing an ESOS assessment now has additional requirements, in line with the 2023 regulations. For full details of how to comply with ESOS requirements, see
The guidance works alongside the legislation to help participants understand the requirements, but the ultimate source of ESOS requirements is the legislation. Summary of the steps required to complete an ESOS assessment
This is the energy used by assets held or activities carried out by your organisation or group. This includes the energy consumed by buildings, industrial processes and transport. This is the energy used by assets held, or activities carried out, by your organisation that needs to be included in an energy audit or covered by another route to compliance see 4 below and must account for at least 95 of your total energy consumption. You must calculate energy intensity ratios for each of
An energy intensity ratio is a measurement which relates an organisations consumption to an appropriate indicator activity. This allows comparison of energy efficiency performance over time. For full details on calculating energy intensity ratios, see section 6 in the full guidance. We recommend the approach set out in the full guidance, but the legal requirement is that the indicator for each organisational purpose is
You should explain the approach you have taken in your compliance notification, if it differs from the one suggested in guidance. You should also keep a record of the approach you have taken in your evidence pack. You must choose one or more routes to compliance, ensuring all areas of either significant or total consumption as appropriate are covered. If complying with ISO 50001, display energy certificates andor green deal assessments, it must have been issued after 5 December 2019 and be valid at either the original compliance date 5 December 2023 or the extended compliance date 5 June 2024. All participants need to have their ESOS assessment signed off by an ESOS lead assessor, unless 100 of your energy supplies are covered by ISO 50001, or your total energy consumption is less than 40,000 kWh. For guidance on appointing a lead assessor and using an alternative compliance route, see Sections 7 and 9 in the full guidance. An ESOS compliant energy audit must meet these criteria
For guidance on carrying out an ESOS energy audit, see Section 8 in the full guidance. You must complete an ESOS report detailing your ESOS assessment audit or alternative compliance route, unless you have zero energy supplies. The ESOS report is a record of your assessment and includes information about the compliance route used and what it covers, the energy saving opportunities identified and energy savings achieved since the previous ESOS compliance date. If your organisation is part of a corporate group you must provide relevant information from the ESOS report to all members of the corporate group, as detailed in the Energy Savings Opportunities Scheme Amendment Regulations 2023. For more detail of the specific requirements for an ESOS report, see section 10 in the full guidance. When you have undertaken an ESOS assessment and are compliant with your obligations, you must submit a notification of compliance using the Managing your ESOS system. The notification includes
The deadline for submitting a compliance notification for the third compliance period was 5 June 2024. Any organisation that qualified for phase 3 of ESOS and has failed to submit a notification of compliance is now at risk of enforcement action and should contact the Environment Agency immediately. Before submitting the compliance notification, you must get one board level director or person exercising management control from one of the undertakings in the participant group to sign off on both the ESOS assessment and the content of the compliance notification. See section 11 in the full guidance for more details on Director sign-off. Use the Managing your ESOS MESOS system to complete your notification of compliance
You can partially complete your notification and save it for submitting later. Start your notification of compliance now
The scheme administrator will publish the majority of the information in your compliance notification, with the exception of personal or commercially sensitive details and feedback. Appendix B of the full guidance provides details of the information that will be published.
8. Evidence pack
You need to keep records of how you have complied with ESOS in an evidence pack. For details of what you must include in your evidence pack, see Section 14 of the full guidance. List of approved registers for ESOS lead assessors
If you want to become a lead assessor, you have to be or become a member of an approved professional body register. Individuals cannot apply directly to the Environment Agency to be approved. You can contact the approved organisations listed here for further information about the application processes or approved lead assessors on their registers. ESOS published data
Notification of compliance data
The Environment Agency publishes the data provided by organisations that submitted a notification of compliance in phases 1 and 2 of ESOS. This data is published to meet the Environment Agencys statutory responsibility under the Energy Savings Opportunity Scheme Regulations 2014 and in alignment with government open data policies.
The published data
Some organisations within a group may be covered by a notification of a UK parent and may not be readily identifiable. More information about ESOS
The introduction of ESOS in 2014 addressed a finding in the 2012 UK Energy Efficiency Strategy that lack of information was a key barrier to the uptake of energy efficiency measures by business. Government established ESOS to implement Article 8 4 to 6 of the EU Energy Efficiency Directive 201227EU. The ESOS Regulations 2014 give effect to the scheme. The current high cost of energy and the UKs net zero legislation has made it more important to help businesses reduce their energy and emissions since leaving the EU. A Post Implementation Review of ESOS in 2020 found businesses were unlikely to carry out energy audits unless mandated to do so, which makes ESOS an important lever in encouraging energy efficiency in business. UK regulators
The UK regulators are
Contact details
For more information on ESOS, email esosenvironment-agency.gov.uk. The Environment Agency will respond within 10 working days. Send your queries well in advance of the compliance deadline to ensure you have enough time to fulfil your obligations before submitting your notification of compliance. For queries on the MESOS reporting system, email esos-itenvironment-agency.gov.uk. For offshore related queries, email OPREDenergysecurity.gov.uk.