About The Energy Savings Opportunity (ESOS)
The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme run by The Environment Agency, for companies in the UK that meet the qualification criteria. The aim of the scheme is to boost the energy efficiency of UK businesses. Companies that qualify for ESOS must carry out ESOS assessments every 4 years, as well as tracking and reporting their energy usage.
Who does ESOS apply to?
We’re now in the 3rd phase of the scheme (it began in 2015 and each phase is 4 years), which applies to companies in the UK that meet the following criteria on 31 December 2022:
- More than 250 employees in the UK; or
- A turnover exceeding £44m AND a gross balance sheet exceeding £38m
If a Company qualifies, they must take the ESOS assessment, which is a six-stage assessment and involves appointing a lead assessor, measuring energy usage, undertaking an audit of energy consumption and recordkeeping. When the assessment is completed, they need to submit a notification of compliance to the Environment Agency and they are expected to maintain records of how they’ve complied with ESOS in an evidence pack.
All group companies qualify if at least one UK group company meets these measures. When a group qualifies, the highest UK parent will act as a responsible undertaking and be responsible for ensuring the group complies (unless otherwise agreed). 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.
If a Company qualifies for ESOS but they are fully covered by ISO 50001 (energy management certificate), they do not need to do the ESOS assessment and instead just notify the Environment Agency of their ISO 50001 coverage.
Deadline for ESOS assessment
The deadline to complete the ESOS assessment 3rd phase, is 5th December 2023. As you can tell, there is a significant amount of compliance involved if a company meets the criteria and therefore it is important that they begin the assessment as soon as possible.
Penalties for non-compliance
Failure to notify the Environment Agency, for example, can lead to an initial penalty of up to £5,000 and a daily fine of up to £500 for each working day of non-compliance. Making a false or misleading statement could lead to fees of up to £50,000.
If you believe your company qualifies for the Energy Savings Opportunity Scheme or would like more guidance regarding the criteria for qualifying, please get in touch with our ESOS experts.
