Summary

The Energy Savings Opportunity Scheme (“ESOS”) is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria.

Qualification is assessed every four years, and the latest qualification date (31 December 2018) has just passed.

If your organisation qualifies, you need to do a number of things before 5 December 2019.

 

Qualification

An organisation qualifies for ESOS if, on 31 December 2018, it met the ESOS definition of a “large undertaking”. A large undertaking is:

  • any UK company that either:
  1. employs 250 or more people (on average during the year to 31 December 2018), or
  2. has an annual turnover in excess of €50 million (£44,845,000 approx), and an annual balance sheet total in excess of €43 million (£38,566,700 approx)
  • an overseas company with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK).

An organisation also qualifies if it is part of a corporate group which includes another UK undertaking or UK establishment which meets these criteria.

ESOS assessment

Save where fully covered by ISO 50001, organisations that qualify for ESOS must carry out an ESOS assessment. The assessment is an audit of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures.

If an organisation qualifies for ESOS, and it is fully covered by ISO 50001, it does not need to carry out an ESOS assessment.

A lead assessor needs to be appointed to carry out and oversee or review the energy audits and overall ESOS assessment. Lead assessors can be employees or external contractors as long as they are members of an approved professional body register.

Notify the Environment Agency

A qualifying organisation needs to submit an online ESOS notification of compliance to the Environment Agency that it has undertaken an ESOS assessment. The deadline for this is 5 December 2019. The ESOS assessment needs to be retained.

Where a corporate group participates in ESOS, unless otherwise agreed, the highest UK parent will act as a ‘responsible undertaking’ and be responsible for ensuring the group as a whole complies.

Enforcement

The deadline for notification to the Environment Agency was extended for Phase 1 for a few weeks as organisations grappled with the new rules. The deadline is unlikely to be extended for Phase 2. Organisations should remember that civil sanctions including financial penalties can be levied if ESOS obligations are not met.