Organisations across the globe have a responsibility to make sure that they are doing what they can to achieve carbon net zero. As part of the UK’s delivery plan to reduce carbon emissions, the UK government is using the Energy Savings Opportunity Scheme (ESOS), which is now in its third phase.
What is ESOS?
The ESOS scheme derives from an EU directive back in 2012 and is a mandatory assessment scheme for organisations within the UK. The aim of the scheme is to ensure that directors and senior management are aware of all energy usage and costs (including gas, electric, oil and transport fuel) and how to reduce them accordingly.
Who qualifies for ESOS?
ESOS applies to companies who employ 250 people or more, with an annual turnover of £44 million and an annual balance sheet of £38 million. They could also be an overseas company with a UK registered establishment and 250+ UK employees (paying income tax in the UK). For a large organisation with sub companies, the parent company is responsible for complying with ESOS. If one company within the group qualifies for ESOS, all the companies within the group must be included in the ESOS submission.
If your organisation meets the above criteria and is fully covered by ISO 50001 accreditation via a certified body, you do not need to carry out an energy assessment. All that is required is to notify the Environment Agency that you are compliant with ESOS. If you do not have an ISO 50001 energy management system or it only covers part of your energy use, you need to carry out an ESOS assessment.
What are the deadlines surrounding ESOS Phase 3?
The key date for qualification with ESOS Phase 3 is 31 December 2022, with the scheme requiring energy assessments to take place every four years. In order to comply, organisations must gather 12 months of information on their energy use. Agreements and recommendations are made based on the data acquired, which must be reported on by the compliance deadline of 5 December 2023.
What happens if my organisation misses the deadline?
The Environment Agency has been supporting companies with their submission requirements, but they have also issued penalties for non-compliance of up to £50,000. This can increase based on the number of days after the compliance deadline where organisations have yet to submit the required information.
What information is required as part of an ESOS assessment?
To comply with ESOS, organisations must gather 12 months of data based on all their energy use (including building energy, transport and manufacturing). All significant energy usage by the company must be reported on as part of ESOS, including building energy, transport and manufacturing. In terms of energy usage in transport, the scheme will only be looking at the costs that the company is responsible for, which would include company cars and commercial vehicles (including grey fleet).
What are my next steps if my organisation does not have an ISO 50001 energy management system?
Organisations without an ISO 50001 accreditation must appoint lead assessors who will support them with compliance in ESOS. The significant areas of energy consumption will then be ascertained, with the criteria to audit 90% of all energy use as a minimum. The lead assessor will then decide which buildings/areas need to be audited, with the remaining 10% placed in de minimis.
Once all site visits are undertaken and all energy reporting is gathered, an audit report of these areas is produced. This is followed by a super report covering all areas, before findings are presented to board members prior to submission. It will be an opportunity for them to discuss how they will reduce their energy use going forward and to look at how they can save money by being more cost-effective in terms of energy use.
Conclusion
One of the key ways in which the UK government will achieve carbon net zero is by engaging more companies in ESOS compliance. The most important thing for businesses to do in this respect is to ensure that they appoint an ESOS lead assessor, devising an energy efficiency strategy and auditing across their portfolio.
How can SOCOTEC help?
With a wealth of experience in energy efficiency, SOCOTEC’s lead assessors can deliver, oversee and approve your organisation’s audits to ensure you meet compliance with confidence. As well as developing a compliance plan which fully conforms with ESOS requirements, SOCOTEC’s Sustainability Consultancy will identify appropriate milestones to ensure you meet compliance by 5 December 2023.
Lee Pegler, operations manager (Energy), SOCOTEC UK
0845 603 2112
https://www.socotec.co.uk/