The Environment Agency has recently announced that the deadline for Phase 3 of the Energy Savings Opportunity Scheme (ESOS) is extended from 5 December 2023 to 5th June 2024.
The extension gives organisations more time to meet new reporting requirements, which aims to strengthen the scheme and drive greater response from business on energy efficiency.
While the compliance date has been extended, the qualification thresholds and date remain unchanged. ESOS still applies to all organisations (and their corporate groups) that were classed as large undertakings on 3 December 2022.
Amendment Regulations to make this happen are still passing through Parliament, however it is expected that the new regulations will be in place well before the end of this year, ahead of the compliance deadline.
Expected ESOS Phase 3 changes
In the current phase of ESOS (phase 3), changes will now require you or the auditor carrying out the ESOS assessment to:
- Include a summary template of compliance information in the ESOS report.
- Include additional data in the compliance notification
- Cover at least 95% of your total energy consumption (the “de minimis” rule has changed from 10% to 5%).
- Include energy intensity ratios in your reporting.
- Share ESOS reports with subsidiaries.
- Provide more information on next steps for implementing recommendations.
- Set a target or action plan following the Phase 3 compliance deadline, and report against this for Phase 4.
- Provide additional data for compliance monitoring and enforcement.
What to expect in Phase 4
ESOS currently just covers energy consumption, but Phase 4 will introduce a wider ‘net zero element’ to ESOS audits. Reports will need to include an assessment of actions needed to meet future net zero commitments. The government is currently working with BSI on the production of a new net zero audit PAS standard to facilitate this. As well as this, the following updates are expected:
- Changing the ESOS balance sheet and turnover thresholds to align with SECR. Organisations would be in scope of ESOS if they meet at least one of the SECR qualification criteria: at least 250 employees, a balance sheet of at least £18 million, or turnover of at least £36 million.
- Mandating action on audit recommendations. Firms will need to provide an explanation if targets and goals have not been met.
- ESOS reporting will be required to follow an existing auditing standard such as ISO 50002 or EN 16247.
- Display Energy Certificates (DECs) and GDAs will be removed as compliance routes for ESOS.
Companies certified to ISO50001 energy management system still do not need to have an ESOS assessment produced, but must still submit a notification to the regulator.
In order to keep up-to-date with changes to environment and H&S legislation, or for an internal audit of your current compliance, get in touch at jamie@ehsmanagement.co.uk.
