Strengthening of the Energy Saving Opportunity Scheme (ESOS)

The government opened a consultation in July 2021 with regards to strengthening the current ESOS scheme, in July this year the government’s response was published including an intention to legislate changes to both phase 3 and phase 4 of the ESOS scheme.

A summary of the changes to be made are as follows:

Phase 3 (31 December 2022 qualification date)

• a new standardised template will be made available for the reporting of ESOS information. Considered to have minimal impact on those subject to the scheme, the impact will be on the assessor

• a reduction of the 10% de minimis exemption to up to 5%. This will result in an additional 5% of your energy data being subject to audit by an assessor

• the addition of an energy intensity metric in ESOS reports. For organisations already participating in Streamlined Energy and Carbon Reporting (SECR) this can be the same intensity metric. For those not within SECR an intensity metric such as turnover, number of people or floor space could be appropriate

• a requirement to share ESOS reports with subsidiaries This has a purely internal impact, onus being on group organisations to share their data

• requirement for ESOS reports to provide more information on next steps for implementing recommendations and set a target and action plan following phase 3 which will be reportable at phase 4 as well. An explanation will now be required of an organisation’s next steps in order to reduce its carbon impact. This will be reportable in future periods to demonstrate action taken and hold organisation’s to account. Again, this is similar to the requirements of SECR.

Phase 4 (31 December 2026 qualification date)

• Threshold for participating in ESOS will extend to also include all organisations who are within the scope of SECR regardless of whether they hit the standalone ESOS thresholds. This will mean that more organisations are required to get their energy data audited which they will not currently be required to do under SECR and will therefore result in an additional compliance cost to organisations.
• Annual performance reporting required through SECR or online. The online portal is not yet available.
• More standardisation of reporting based on ISO50001 or EN16247 This will impact the assessor rather than your organisation
• Removal of Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) from the compliance route for ESOS (still permitted, but discouraged, for Phase 3) This will impact organisation’s who currently use the above certificates to comply with ESOS, this will no longer be permitted so will result in an additional compliance cost for these organisations.

Collaborate to Achieve

If you would like to discuss your ESOS or energy reporting requirements please get in touch with your usual Albert Goodman contact or Sophie Parkhouse direct.