Environment Agency
July 2024 update
If your organisation qualifies for phase 3 of ESOS but has not submitted a notification of compliance, you must register on the MESOS system as soon as possible. The Environment Agency will not take enforcement action if you submit a notification of compliance that meets the necessary regulatory requirements by 6 August 2024.
For full details of how to comply with ESOS requirements see:
- the Energy Savings Opportunities Scheme Regulations 2014 as amended by the Energy Savings Opportunities Scheme (Amendment) Regulations 2023, that came into force in November 2023
- the Phase 3 guidance. We will update this guidance in line with feedback from user testing
The guidance works alongside the legislation to help participants understand the requirements, but the ultimate source of ESOS requirements is the legislation.
Aboutthe Energy Savings Opportunity Scheme (ESOS)
ESOSis a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. The Environment Agency is the UK scheme administrator.
Organisations that qualify forESOSmust carry out ESOS assessments every 4 years. These assessments are audits of the energy used by their buildings, industrial processes and transport.
The ESOS audit is designed to identify tailored and cost-effective measures to allow participating businesses to save energy and achieve carbon and cost savings. The audit costs are estimated to be significantly outweighed by the savings from implementing the recommendations.
Find out if you qualify forESOSphase 3
ESOSapplies to large UK undertakings and their corporate groups. It mainly affects businesses but can also apply to not-for-profit bodies and any other non-public sector undertakings that are large enough to meet the qualification criteria.
Your organisation qualifies for the third compliance period (ESOS phase 3) if, on 31 December 2022, it met theESOSdefinition of a large undertaking.
Corporate groups qualify if at least one UK group member meets theESOSdefinition of a large undertaking.
UK registered establishments of an overseas company will also need to take part inESOS(regardless of their size) if any other part of their global corporate group activities in the UK meet theESOSqualifying criteria.
If youre very close to the qualification threshold or have substantially increased or decreased in size in recent years, read thefull guidance on complying withESOS. This includes additional information on how to assess if you qualify.
Public sector organisations do not usually need to comply withESOS. For more information on organisations that do not need to comply, see section 1.2 of thefull guidance on complying withESOS
Large undertakings
For the qualification date for the third compliance period of ESOS (31 December 2022) a large undertaking is any UK company that either:
- employs 250 or more people, or
- has an annual turnover in excess of 44 million, and an annual balance sheet total in excess of 38 million
A person is employed by an undertaking if they are:
- an employee
- an owner or manager
- a partner
An employee is a person employed under contracts of service. Their contracted hours and status (full time or part time) are irrelevant to their classification as an employee.
For further guidance on who qualifies for ESOS, see section 1 in the full guidance.
Deadlines forESOScompliance
Organisations that qualify for ESOS must notify the Environment Agency by a set deadline that they have complied with theirESOSobligations.
The deadline for submitting notification of compliance for phase 3 of ESOS was5 June 2024.
If your organisation qualifies for phase 3 of ESOS and has not submitted its notification of compliance, you must register on the Manage Your Energy Savings Opportunity (MESOS) system as soon as possible.
The Environment Agency will not take enforcement action if you submit a notification of compliance that meets the necessary regulatory requirements by 6 August 2024.
The qualification thresholds and date have not changed; ESOS still applies to all organisations (and their corporate groups) that were classed as large undertakings on31 December 2022.
Organisations that qualify for ESOS in Phase 3 will be required to comply with the Energy Savings Opportunities Scheme (Amendment) Regulations 2023.
Changes include:
- standardization through strengthening requirements for audits
- all participants are now expected to produce an ESOS report, action plan and annual progress reports
- participants will now also be required to publicly disclose high level recommendations
ESOSregulation and penalties
Yourenvironmental regulator is responsible for compliance and enforcement activities. It may issue civil sanctions including financial penalties if an organisation does not meet the schemes obligations.
Read the Environment Agencys approach toESOSregulation and penalties in theirenforcement and sanctions policy (annex 2, section D). Other scheme regulators apply a similar approach - see section 15 of thefull guidance.
A summary of the penalties imposed is available ondata.gov.uk.
If you do not qualify forESOSphase 3
If you have been contacted by the Environment Agency in the past, or you qualified for phase 1 and/or phase 2 but not for phase 3, you need to tell the Environment Agency you do not qualify. You can do this using the MESOS system.
Complete anESOSassessment
Completing an