Environment Agency provide updated guidance to comply with ESOS

On 28th November, following a lengthy legislative process, the Environment Agency have provided updated guidance on the new requirements to comply with the Energy Savings Opportunity Scheme (ESOS) going forward.

ESOS is a mandatory energy assessment and energy saving identification scheme in the United Kingdom. It requires large businesses to conduct regular energy audits and identify energy-saving opportunities within their operations. The goal is to promote energy efficiency and reduce carbon emissions.

Organisations eligible for ESOS are obligated to undertake ESOS assessments every four years. We are currently in the third cycle of this four-year period, referred to as Phase 3. Following a lengthy legislative process, the Environment Agency have provided updated guidance on the new requirements to comply with the scheme going forward. These requirements were mandated through the Energy Act which was passed in October 2023. 

The deadline for compliance for Phase 3 has been extended to the 5th of June 2024, allowing more time for businesses to comply with the updated ESOS regulations outlined in this article. However, the EA have confirmed that they will not take enforcement action on organisations until 6 August 2024. This is not a deadline extension, it is described as a ‘regulatory enforcement extension period’. Organisations should still seek to comply by the 5 June 2024, but provided organisations have registered with the new IT notification system by the 5 June 2024 and submit a notification by 6 August 2024 they will not take enforcement action.

Key updated information includes the need to:

•    Report on and cover at least 95% of total energy consumption, ‘de minimis’ rule previously 90%
•    Report on intensity metrics relevant to organisation
•    Share findings of ESOS report to all corporate group members
•    Submit an action plan following on from ESOS report
•    Submit annual progress updates on energy savings actions 

Action plans

By the 5 December 2024, 6 months following ESOS Phase 3 compliance, an action plan must be produced to display how suggested energy savings opportunities will be implemented until 5 December 2027. This should include details on:

•    What opportunities will be acted upon
•    Time scale of implementation
•    Whether it was recommended through ESOS report
•    What energy savings (consumption) are expected over 4-year period covered by Action plan
•    How these estimated savings were calculated

Intensity metrics

Within the report, the total energy consumption should be calculated against a metric such as floor space, km travelled, production / process to primarily compare with the performance of the company across a number of years, allowing the Phase 3 values to act as a baseline for future reporting.
You must calculate an energy intensity ratio for each of the following areas (termed ‘organisational purposes’) except where you have used no energy for that purpose during the reference period:

•    buildings
•    transport
•    industrial processes
•    other energy uses outside the above three categories

Annual Progress updates

Building upon both ESOS compliance and the action plan – businesses will be required to report on any progress made on energy savings against the commitments outlined in the action plan. 
This is to provide a method to act on the reporting of energy consumption and the possible savings. The deadlines for successive progress updates are 5 December 2025 and then 2026.

Increased private and public disclosure

In ESOS corporate group reporting, each entity must share relevant information from the ESOS report with others in the group included within the report. The director at the board level, overseeing compliance sign off must confirm the sharing of information.

In terms of public disclosure, the Environment Agency will publish most details from your compliance notification, such as total/significant energy consumption, potential reduction estimates, and energy savings from the prior compliance period. Your Action Plan and Progress Reports will also be available to the public.

Phase 3 (Current) milestone dates

Phase 4 (future) milestone dates

If you’re a current customer wanting to find out more or to begin the steps to ESOS Phase 3 compliance with Beyondly then click here or contact solutions@beyond.ly .