ESOS: What is coming?
Let's examine some of the latest ESOS updates from the Environment Agency.
The Energy Savings Opportunity Scheme (ESOS) is evolving fast, making it essential to stay informed about the latest compliance requirements.
However, delays to the introduction of ESOS Phase 3 legislation and guidance have meant successional announcements this past year.
When information comes in thick and fast, the regulatory landscape can seem inordinate to navigate. Therefore, now is a good time to look at some of the latest ESOS updates from the Environment Agency.
ESOS Phase 3: Participants who do not submit an action plan risk penalties
The Environment Agency, the scheme administrator, has provided further clarification to Phase 3 participants, regarding additional compliance stages introduced: ESOS action plan and ESOS annual progress updates.
Although the official deadline of 5th December 2024 has passed, Phase 3 participants have a grace period until 5th March to make their action plan submission.
Phase 3 participants must make a compliant submission to meet the deadlines to avoid enforcement action regardless of whether they choose to define an action plan.
Failing to comply with the scheme rules could result in financial and reputational risks for non-compliance, including:
- Financial penalties up to £90,000.
- Public disclosure of civil penalties on the gov.uk website for 12+ months.
What will change for ESOS Phase 4?
Subject to parliamentary time and scrutiny, some proposed changes for Phase 4 are intended to go ahead:
- Removal of Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) as compliance routes.
- Progress against action plan commitments to be included in the ESOS assessment.
- Where action plan commitments have not been met, participants must provide an explanation.
The Department for Energy Security and Net Zero (DESNZ) will provide further details of these changes in due course.
What has been deferred?
- In 2021, the previous government outlined their intention for Phase 4 (2023-2027) participants to be required to include net zero considerations in their audit. However, the new government has decided to postpone this until ESOS Phase 5 (2027-2031).
- Proposed changes to qualification thresholds for ESOS to align with Streamlined Energy and Carbon Reporting (SECR) requirements will not be taken forward in Phase 4.
- Therefore, the Phase 4 qualification criteria and the qualification date (31 December 2026) will remain unchanged.
New standards to support voluntary net zero reporting
Recognising that ESOS participants and lead assessors may already be carrying out work which covers some of the elements of a net zero assessment, DESNZ has worked with the British Standards Institution (BSI) to finalise two Publicly Available Specification (PAS) standards which can be used for ESOS compliance in Phase 4 on a voluntary basis:
- 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.
DESNZ will provide guidance for participants to use alongside PAS 51215-1:2025 to ensure they are compliant with the requirements for an ESOS audit. The Environment Agency is set to confirm soon when this guidance is expected to be available.
How can Inspired help?
ESOS represents a real opportunity to create long-term energy, cost and carbon savings, and Inspired has a strong track-record of offering comprehensive support with the scheme.
Whether this means support with your compliance, or with your voluntary energy and decarbonisation assessments, please contact our team on 01772 689250 or email us at [email protected]
