ESOS Phase 4: What You Need to Know as a Business
ESOS stands for Energy Savings Opportunity Scheme, and it is a program that large UK businesses must abide by. It ensures that companies are working to reduce their energy consumption and are taking measures to be more environmentally friendly. The goal is to achieve net-zero carbon emissions by 2050.
As of 6th December 2023, we entered the 4th phase for ESOS compliance. The deadline for the initial action plan submission is 5th December 2027.
Who qualifies for ESOS Phase 4?
To qualify for ESOS, your business must both:
- Be registered in or based in the UK
- Employ 250 or more employees, or have an annual turnover of £44+ million and an annual balance sheet of £38+ million
Typically, small and medium-sized enterprises (SMEs) and public-sector bodies are exempt from ESOS requirements.
ESOS Phase 4 Requirements
If you qualify for the Energy Savings Opportunity Scheme, you need to make an action plan. You also have to carry out an energy audit to show that your business is saving energy.
The Phase 4 action plan deadline is 5th December 2027, but you can begin working on it now. If you fail to meet the deadline, there is a £50k fee, with an additional £800 charge for each day it is late, up to 80 days.
Your action plan is the initial document that must be signed off by a board-level director (or equivalent) and submitted through the Manage your ESOS portal. As part of your action plan, you must calculate your total energy consumption and the areas of significant energy use. Then, decide on your route to compliance and formulate a plan with objectives to reduce your energy usage.
Once you have submitted an action plan, you must then submit progress reports on your objectives for the two following years after the original action plan deadline. The ESOS phase 4 deadlines for these documents are 5th December 2028 and 5th December 2029.
Changes from Phase 3 to Phase 4
The government has made some changes to the ESOS procedure since Phase 3. They will no longer offer Display Energy Certificates (DEC) and Green Deal Assessments as compliance routes. Therefore, you cannot use these to support your action plan.
Progress against your action plan commitments is now to be included in your assessment. The government will also now require an explanation if your business has failed to meet its action plan commitments.
While the government previously announced that net-zero requirements would be in place for Phase 4, they have now postponed this development until Phase 5.
It is important to be aware of the latest requirements and deadlines for ESOS documents. You can find out more information on gov.uk. To learn more about how Apertus Group’s energy procurement services can help you reach your energy business goals, call 01604 212 828 or email info@apertusgroup.co.uk.
