ESOS Phase 3

The Energy Savings Opportunity Scheme (ESOS) deadline is December 2023. ESOS is a compulsory government scheme for businesses of a certain size that aims to create and nurture sustainability and energy efficiency across all industries.

    What is ESOS Phase 3 and which businesses qualify?

ESOS affects up to 10,000 UK businesses classified as ‘large undertakings’. ESOS applies to your business if you meet either or both of the following criteria:

• You have more than 250 employees
• You have an annual turnover of more than £44m+ and a balance sheet £38m+ as of 31st December 2022.

For corporate groups, only one business under your umbrella needs to meet the criteria for you to qualify. The qualification date to determine whether your business qualifies for the scheme is 31st December 2022.

For businesses that qualify, the final compliance date for ESOS Phase 3 is 5th December 2023.

If you qualify, then you must register your ESOS compliance with the Environment Agency on or before this date which must first be signed off by an accredited ESOS Lead Assessor.

If you are not sure whether you qualify, or your business is very close to the threshold please contact GLEG directly at hello@gleg.co.uk.

What are the requirements from ESOS Phase 3?

The foundations of ESOS remain the same for Phase 3 as the previous two phases. However, there will likely be some changes you will need to be aware of if you qualify for this phase.

Essentially, ESOS compliance requires qualifying businesses to:

• Identify and measure your total energy consumption for all energy classifications
• Carry out energy audits to identify and assess energy savings opportunities
• Report compliance to the Environment Agency every four years

ESOS is a significant undertaking, especially if Phase 3 is your first time qualifying for the scheme. It involves collecting, collating, and analysing significant amounts of data along with a strategic approach to auditing and energy-saving assessments.

What has changed for ESOS Phase 3?

Target or Action Plan following Phase 3 Your business will need to report progress annually, mainly via SECR reports. Targets won’t need to be met in the current phase, but this will become mandatory from Phase 4 onwards (or organisations must explain why they haven’t met the target).

Standardised Reporting Details including Organisational details, reason for qualification, route to compliance, lead assessor details, energy consumption details, number of sites, sampling method, summary of audit finding, actions taken and executive sign off will be standardised.

Energy Intensity Metric To be expressed in terms of kWh/m2 for buildings, kWh/unit output for industry and kWh/miles travelled for transport.

5% De-minimis Rule This approach allows participants to realise more significant energy saving benefits from areas of the organisation that may not previously have been considered, but without placing disproportionate costs on participants. In reality, this will only impact a small number of businesses, potentially bringing more focus on transport in Phase 3.

For a more detailed discussion on ESOS phase 3 and how to best deliver this project for your business please contact hello@gleg.co.uk.