The

ESOS latest updates

Phase 4 changes

ForThe fullfollowing detailschanges ofannounced howin the previous government’s response to complythe with ESOS requirements see:consultation will not go ahead for Phase 4:

• the Energychanges Savingsto Opportunitiesrefocus Schemethe Regulationsscheme 2014 asto amendedcover mostnet recentlyzero byas the Energywell Savingsas Opportunitiesenergy Schemeefficiency (Amendment)(responses Regulationsto 2026questions 16, 17, 18 and 19)
• the guidancechange onto howqualification thresholds to complybetter align with ESOSStreamlined phaseEnergy 4 and Carbon Reporting (SECR) (response to question 23)

ThisFollowing guidancedelays worksto alongside the introduction of Phase 3 legislation and guidance, and in order to helpgive yousufficient understandtime thefor requirementssuch ofa themajor scheme.

change to ESOS, latestthe updates

Phasenew 4government changes

has decided to postpone the introduction of net zero requirements until Phase 5.

The governmentfollowing haschanges amendedannounced in the Energyprevious Savingsgovernment’s Opportunityresponse Schemeto Regulationsthe 2014ESOS aheadconsultation ofare theintended fourthto compliancego period,ahead alsofor knownPhase as4, ESOSsubject phaseto 4. Thisparliamentary meanstime that:and scrutiny:

• youremoval canof no longer use Display Energy Certificates (DECs)(DECs) and Green Deal assessmentsAssessments (GDAs)(GDAs) as alternative compliance routes (response to question 10)
• progress against action plan commitments mustto be included in yourthe ESOS assessment
• you mustassessment provide(response anto explanationquestion 20)
• where action plan commitments have not been metmet, participants must provide an explanation (response to question 20)

Net

Further zerodetails assessments

Participantsof these changes will be provided in phasedue 4course. canThese voluntarilychanges includeand netfull zeroguidance, considerationsas inwell theiras the necessary changes to the Manage your ESOS assessmentreporting usingsystem are planned to be in place by early 2027 in advance of the followingnotification of compliance deadline for Phase 4, which is 5 December 2027.

Publication of new PAS standards

On 7 February the British Standards Institution (BSI) standards:published two new standards which were referenced in the government response to the ESOS consultation:

• PAS 51215-1:2025 Energy and decarbonization assessment – Part 1: Process – Specification
• PAS 51215-2:2025 Energy and decarbonization assessment – Part 2: Competencies of lead assessors and assessment teams – Specification

TheseParticipants standardswill combinebe theable processto anduse leadthese assessorstandards competenceon standardsa requiredvoluntary basis for theESOS mandatorycompliance. energyFurther assessmentguidance foron ESOSvoluntary anduse aof decarbonisationthese assessment.standards will be published in due course.

The existing competency standard, standard, PAS 51215:2014 Energy efficiency assessment: Competence of a lead energy assessor – Specification, remainswill continue to be used as the competency standard for for ESOS lead assessors.lead assessors for Phase 4.

ManageThe yournew EnergyPAS Savings51215-2:2025 Opportunitycompetency Schemestandard Reportingcan (MESOS)be used on a voluntary basis by organisations wanting to determine whether an assessor is thesuitable onlineto systemcarry forout reportingan complianceassessment withaccording theto PAS 51215-1:2025.

ESOS action requirements.plan

If MESOSyou doeswere notrequired allowto reportingsubmit a notification of anycompliance voluntaryfor decarbonisationthe assessments,third althoughcompliance theperiod Department(deadline for5 EnergyJune Security2024), you must also submit an action plan and Netprogress Zeroupdates (DESNZ)during isthe consideringsubsequent thisrelevant forcompliance potentialperiod. future If changesyou todid not qualify for ESOS for the onlinethird system.compliance Organisationsperiod, mayyou wishdo not need to publishcomplete thisan informationaction viaplan theiror ownprogress reportsupdates orin websites. the subsequent compliance period.

Reminder:

For Phasedetails 3about ESOS action requirements

plans, see Section 12 in the full guidance.

IfThe youaction qualifiedplan formust be signed off by a board level director (or equivalent), and submitted via the Manage your ESOS inreporting system by the action plan deadline. For the third compliance period,period alsothis knowndeadline aswas 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 phasereporting 3,system. betweenNo 6remedial Decemberactions 2019will andbe considered for action plans submitted up until 5 DecemberMarch 2023,2025.

Start your action plan now

Annual progress updates

Following submission of the action plan, you must submit an annual progress update isagainst dueyour toaction beplan submittedcommitments byin 5the December2 2026subsequent inyears.

The relationdeadline tofor submitting an annual progress update is 12 months after the action plan youdeadline, submitted. 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)equivalent), and submitted via MESOSthe Manage your ESOS. reporting system.

For full details of ESOS annual progress updates, see Section 13 of howthe toguidance.

About the complete Energy Savings Opportunity Scheme (ESOS annual)

ESOS is progressa updates,mandatory seeenergy sectionassessment 14scheme 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 guidanceenergy onused 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 with ESOS requirements phasesee:

• the 4Energy Savings Opportunities Scheme Regulations 2014 as amended most recently by the Energy Savings Opportunities Scheme (Amendment) Regulations 2023,
• the Phase 3 guidance.
  We will update this guidance for Phase 4.

IfThe youguidance haveworks notalongside yetthe submittedlegislation anto actionhelp planparticipants youunderstand shouldthe contactrequirements, but the Environmentultimate Agency.source of ESOS requirements is the legislation.

Find out if you qualify for ESOS phase phase 4 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 qualifiesqualified for the third compliance period (ESOS phase 4phase 3) if, on 31 December 2026,2022, it meetsmet the ESOS definition of a large undertaking.

For phase 3, the qualification date was 31 December 2022.

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, seeread section 1.6 of the full guidance on howcomplying to comply with ESOS phase 4. 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 dothat do not need to comply,comply, see see section 1.2 of thethe full guidance on howcomplying to comply with with ESOS phase 4.

Large undertakings

For the qualification date for the third compliance period of ESOS phase(31 4,December 2022) a large undertaking is any UK company that either:

• employs 250 or more people, or
• has an annual turnover in excess of £44 million, and an annual balance sheet total in excess of £38 million

A person is employed by an undertaking if they are:

• an employee
• an owner or manager
• a partner

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,qualifies see for ESOS, see section 1 ofin the full guidance.

Deadlines onfor ESOS compliance

Organisations howthat toqualify complyfor 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 4.3 of ESOS was 5 June 2024.

If

Any youorganisation dothat notqualified qualifyfor for phase 3 of ESOS phase 4

and has failed to submit a notification of compliance is now at risk of enforcement action and should contact the Environment Agency immediately.

IfThe youqualification thresholds and date for phase 3 have previouslynot been contactedchanged; byphase your3 regulator,of orESOS youstill applies to all organisations (and their corporate groups) that were classed as large undertakings on 31 December 2022.

Organisations that qualified for anyESOS previousin phasesPhase but3 notwill be required to comply with the Energy Savings Opportunities Scheme (Amendment) Regulations 2023.

Changes include:

• standardization through strengthening requirements for phaseaudits
• all 4,participants youare neednow expected to tellproduce youran regulatorESOS youreport, doaction notplan qualify.
  and annual progress reports
• participants will now also be required to publicly disclose high level recommendations

ESOS regulation and penalties

Your ESOSenvironmental regulator is responsible for compliance and enforcement activities. It may issue civil sanctions including financial penalties if an organisation does not meet the scheme’s obligations.

Read the Environment Agency’s approach to ESOS regulation and penalties in their enforcement and sanctions policy (annex 2, section D). Other scheme regulators apply a similar approach - see see section 15 of the guidancethe full on how to comply with ESOS phase 4guidance.

A A summary of the penalties imposed in England is available.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 and/or 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 phasewith 4 ESOS requirements, requirements, see:

• the the Energy Savings Opportunities Scheme Regulations 2014 as2014 as amended most recently by the the Energy Savings Opportunities Scheme (Amendment) Regulations 20262023 ,
• the the Phase 3 guidance. onWe howwill toupdate complythis withguidance ESOSfor phasePhase 4

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 an ESOS assessment assessment

1. Calculate your total energy consumption

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.

2. Identify your areas of significant energy consumption

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 step4 4)below) and must account for at least 95% of your total energy consumption.

3. Calculate your energy intensity ratios

You must calculate energy intensity ratios for each of:

• buildings
• transport
• industrial processes
• other energy uses outside of thesethe above 3

An energy intensity ratio is a measurement which relates an organisation’s consumption to an appropriate indicator activity. This allows comparison of energy efficiency performance over time.

For full details on calculating energy intensity ratios, see see section 6 ofin the guidancefull on how to comply with ESOS phase 4guidance.

We recommend the approach set out in the full guidance, but the legal requirement is that the indicator for each organisational purpose is: 

• quantifiable
• associated with the assets or activities that relate to the specific organisational purpose
• calculated using verifiable data where reasonably practicable or a reasonable estimate (from phase 4 onwards)

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.

4. Decide on your routesroute(s) to compliance and appoint a lead assessor

You must complychoose usingone an energy audit or anmore ISOroutes 50001 certification to covercompliance, ensuring all areas of either significant energy consumption or total energy consumption (as applicable).appropriate)  Fromare phase 4 onwards, DECs and GDAs can no longer be used as alternative compliance routes.covered.

If complying with ISO 50001, thedisplay certificationenergy certificates and/or green deal assessments, it must have been issued after 5 December 20232019 and be valid at either the original compliance date,date 5(5 December 2027.2023) or the extended compliance date (5 June 2024).

YouAll participants need to have your their ESOS assessment signed off by an ESOS lead assessorassessor, unless:

• yourunless total100% of your energy consumptionsupplies isare covered by an ISO 5000150001, certification or or is less than 40,000 kWh
• your significanttotal energy consumption is coveredless bythan an40,000 ISOkWh. 50001 certification, from phase 4 onwards

 

For guidance on appointing a lead assessor and using thean ISO 50001 alternative compliance route, see sectionsSections 7 and 9 in the guidancefull on how to comply with ESOS phase 4guidance.

5. Carry out any necessary necessary ESOS energy energy audits

An An ESOS compliant compliant energy audit must meet these criteria:

• it must be based,based soon far12 asmonths’ reasonably practicable, on verifiable energydata, consumptionbeginning data measured over a 12-month period, which begins no earlierearly than 6 December 20222018 for phase 4
• the 12-monthphase period3 mustcompliance begin no earlier than 24 months before the start of the ESOS energy auditperiod
• it must analyse the participant’s energy consumption and energy efficiency
• it must identify energy saving opportunities
• it must include site visits

For guidance on carrying out an an ESOS energy energy audit, see sectionsee Section 8 ofin the guidancefull on how to comply with ESOS phase 4guidance.

6. Complete the the ESOS report report and share with the corporate group

You must complete an an ESOS report report detailing your your ESOS assessment (anassessment audit(audit only, or aalternative combinationcompliance ofroute), an audit and ISO 50001 certification if the ISO 50001 certification does not cover the significant or total energy consumption), unless you have zero energy supplies.

The The ESOS report report is a record of your assessment and includes:

• includes information about the energycompliance auditroute and any ISO 50001 certification used in addition to it, and what theyit cover
• covers, the energy saving opportunities identified
• the and energy savings achieved since the previous ESOS complianceprevious date

If you comply exclusively using an ISO 50001 certification to cover either the significant or total energy consumption, an ESOS reportcompliance is not required.date.

From phase 4 onwards, additional detail must be provided on the energy savings achieved, and the action plan must be reviewed to identify any measures in it that were not implemented and an explanation provided of the reasons why.

If your organisation is part of a corporate group,group you must provide relevant information from the the ESOS report report to all members of the corporate group.group, as detailed in the Energy Savings Opportunities Scheme (Amendment) Regulations 2023.

For more detail of the specific requirements for an an ESOS report, see report, see section 10 in the full guidance.

7. onNotify howthe toEnvironment complyAgency

When withyou have undertaken an ESOS phaseassessment 4.

7.and Notificationare ofcompliant compliance

Youwith your obligations, you must submit a notification of compliance using MESOSthe Managing your ESOS. system.

The notification includes:

• details about your organisation
• how it has complied
• energy consumption information
• energy savings opportunities that have been identified

BeforeAny submittingorganisation thethat compliancequalified notification,for youphase must3 getof signESOS offand onhas bothfailed the ESOS assessmentto submit a notification of compliance is now at risk of enforcement action and should contact the contentEnvironment ofAgency immediately.

Before submitting the compliance notificationnotification, fromyou must get one board level director, director or a person exercising management control from one of the undertakings in the participant group.

See sectiongroup 12to ofsign theoff guidance on howboth tothe comply with ESOS phaseassessment 4and forthe morecontent detailsof onthe sign-off.compliance notification.

YouSee section should11 usein MESOSthe tofull completeguidance for yourmore notificationdetails ofon compliance.Director Yousign-off.

Use willthe beManaging ableyour toESOS create(MESOS) asystem GOV.UK One Login to signcomplete inyour tonotification MESOS.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. feedback. Appendix B ofB of the full guidance on how to comply with ESOS phase 4 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 sectionsee 11Section 14 of the guidancefull on how to comply with ESOS phase 4guidance.

ApprovedList of approved registers for ESOS lead assessors

If you want to become a lead assessor, you have to be 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 for further information about the application processes or approved lead assessors on their registers.

You must appoint a lead assessor from this list, or your energy audit will not be considered as complying with the regulations:

• Association of Energy Engineers – certified energy auditor international or certified energy manager international
• CIBSE (TheCIBSE (The Chartered Institution of Building Services Engineers) – CIBSE low – CIBSE low carbon consultant (LCC) register, ESOS lead assessor subset
• Elmhurst Energy Systems – Elmhurst approved ESOS lead assessor
• Energy Institute – chartered energy manager, register of professional energy consultants
• Energy Managers Association – EMA energy – EMA energy saving opportunity scheme lead assessor register
• The Institute of Sustainability and Environmental Professionals – register of ISEP members who can act as third-party lead assessors
• Quidos –  – ESOS register,  register, ESOS lead lead assessor certification

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.

Published ESOS: published data

Notification of compliance data

The Environment Agency publishes the the data provided by organisations that submitted a notification of compliance in previous phases 1 and 2 of ESOS. This data is published to meet the Environment Agency’s statutory responsibility under the Energy Savings Opportunity Scheme Regulations 2014 and in alignment with government open data policies.

The published data:

• shows the information on existing requirements that are published by the scheme administrator, as detailed in appendixin Appendix B of thethe full guidance on howcomplying to comply with with ESOS phase 4
• does not include personal data – this is protected under the General Data Protection Regulation 2018 (GDPR)
• contains no amendments – unless requested or to remove personal data
• has not been verified for compliance – it is a record of notifications

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 (2012/27/EU). The ESOS Regulations 2014 give effect to the scheme.

The current high cost of energy and the UK’s 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:

• Environment Agency for organisations whose registered office is in England
• Natural Resources Wales for organisations whose registered office is in Wales
• Northern Ireland Environment Agency for organisations whose registered office is in Northern Ireland
• Scottish Environment Protection Agency for organisations whose registered office is in Scotland
• Secretary of State for Department for Energy Security and Net Zero for organisations whose activities consist wholly or mainly of offshore activities

Contact details

For more information on on ESOS, email esos@environment-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 the MESOS reporting reporting system, email email esos-it@environment-agency.gov.uk.

For offshore related queries, email OPRED@energysecurity.gov.ukOPRED@energysecurity.gov.uk.