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BEIS to require more businesses to comply with ESOS

Published August 25, 2022

BEIS to require more businesses to comply with ESOS

The Department for Business, Energy and Industrial Strategy (BEIS) is to increase the number of businesses that must comply with the Energy Savings Opportunity Scheme (ESOS).

The increase was announced in BEIS’ response to a consultation on strengthening ESOS. BEIS will require ESOS qualification thresholds to be brought in line with those of SECR by Phase 4. This means thousands of additional businesses will fall within the scope of ESOS compliance.

Some of the changes announced by BEIS are expected to be implemented in advance of the current Phase 3 compliance deadline (05 December 2023), and others in Phase 4 (05 December 2027).

The key changes to be aware of are:

  • ESOS qualification thresholds in line with those of SECR by Phase 4
  • A standardised template for including compliance information in the ESOS report
  • The reduction of the 10% de minimis exemption to 5%
  • The addition of an energy intensity metric in ESOS reports
  • A requirement to share ESOS reports with subsidiaries
  • A requirement for ESOS reports to provide more information on next steps for implementing recommendations
  • A requirement for participants to set a target or action plan following the Phase 3 compliance deadline, on which they will be required to report against for Phase 4
  • The collection of additional data for compliance monitoring and enforcement
  • The removal of Display Energy Certificates and Green Deal Assessments as compliance routes for ESOS in Phase 4.

The addition of a net zero element to ESOS audits will not become a requirement until Phase 4. However, BEIS is currently working with BSI on the production of a new net zero audit PAS standard, which will enable ESOS participants to implement the proposal in Phase 3 on a voluntary basis.

“Now, more than ever, it is crucial to secure a qualified ESOS lead assessor to guide your business through the evolving compliance process and to guarantee compliance ahead of the Phase 3 deadline,” said Gianluigi Corbani, Head of Sustainability and Asset Management, Alfa Energy Group. Get ahead by being prepared and reap the rewards.”

Although the deadline for Phase 3 ESOS is December 2023, companies can start collecting the 12 months’ energy data from 01 January 2022.

LEAD assessors are in high demand, and particularly as you get closer to the deadline, so we recommend:

  • Securing your assessor now
  • Scheduling the phases of work to be undertaken
  • Allowing plenty of time to plan site visits and
  • Ensuring appropriate systems and processes are in place for data collection and storage.

With energy prices at record highs and growing stakeholder demands surrounding ESG, getting ahead with ESOS Phase 3 and acting upon the recommendations could alleviate some of these pressures.

In addition, getting prepared means you can consider combining ESOS compliance with other mandatory and voluntary schemes (such as SECR, ISO5001 and SBTi) or indeed a net zero strategy, which will streamline processes and lead to cost savings.