For businesses that have yet to comply with ESOS requirements, a new announcement about the scheme’s extension should be an alert signal. Let’s take a look at how the new ESOS phase 4 date may affect your business.
The Energy Savings and Opportunities Scheme, or ESOS, is a government directive aimed at encouraging businesses to reduce their carbon emissions and increase their energy efficiency. ESOS, unlike the yearly SECR obligations, occurs in phases.
Originally the final ESOS compliance date was set to be in December 2023. However, the government updated its guidance and ESOS has now been extended. The new ESOS phase 4 will take place between the 31st December 2026 (qualification date) and the 5th of December 2027 (compliance date.)
The new full dates are below:
|Phase||Qualification date||Four-year compliance phase||Compliance date|
|1||31st December 2014||6th December 2011 – 5th December 2015||5th December 2015|
|2||31st December 2018||6th December 2015 – 5th December 2019||5th December 2019|
|3||31st December 2022||6th December 2019 – 5th December 2023||5th December 2023|
|4||31st December 2026||6th December 2023 – 5th December 2027||5th December 2027|
What does this extension mean for you?
This extension not only shows that the government is committed to making businesses more energy efficient – but it also means that while you may not currently meet ESOS criteria, you may by 2026. Therefore, all growing businesses must be aware of this new phase.
To be eligible for ESOS, your business must have more than 250 employees OR an annual turnover exceeding £50m and a balance sheet exceeding £43m. If you’re part of a corporate group, any member of that group who is eligible means the entire group is eligible.
What happens if you don’t comply by the specified dates?
Failure to comply with ESOS can lead to fines of up to £50,000 and then £500 a day until you are compliant. This sort of fine can lead to heavy ramifications for your business – making it vital that you get an ESOS review booked if you feel you will be eligible anytime before 2026.
Compliance with ESOS requires following a number of stages:
- Identify whether you’re eligible. Full eligibility criteria are available here on our website. Rember: you may not be eligible at the moment, but if your business grows to meet criteria by 2026, you must comply or risk fines.
- Identify your total energy consumption, then your significant energy consumption (90% of your total energy consumption).
- Audit your significant energy consumption to identify savings opportunities.
- Have the audit reviewed by lead assessors and signed off by directors.
- Notify the environment agency of ESOS completion.
These steps can vary in complexity depending on the size, scope and general organisation of your business. At Integral Energy, we offer full ESOS management services that take all of the effort and worry away from your business – leaving you to focus on what you do best while we use our expertise to ensure your ESOS obligations are followed.