Energy Savings Opportunity Scheme (ESOS) Consultants
Ensure ESOS compliance with support for Phase 3 Progress Updates, ESOS energy audits and preparation for ESOS Phase 4.
ESOS Phase 3 Progress Updates and Phase 4
The Energy Savings Opportunity Scheme (ESOS) is currently in an important transition period between the ongoing reporting requirements of ESOS Phase 3 and preparation for ESOS Phase 4.
Organisations that qualified for ESOS Phase 3 still have reporting obligations under their Phase 3 Action Plan. At the same time, organisations will need to establish whether they qualify for ESOS Phase 4. The Phase 4 qualification date is 31 December 2026, followed by the full Phase 4 compliance deadline on 5 December 2027.
This makes 2026 an important year; completing the final Phase 3 Progress Update while preparing for the next full ESOS assessment and Phase 4 compliance cycle.
What is ESOS?
The Energy Savings Opportunity Scheme (ESOS) is a mandatory UK energy assessment for large organisations. It was enforced due to the UK legislation for meeting the EU Energy Efficiency Directive Article 8. ESOS came into force on 17 July 2014. Qualifying organisations are required to assess their energy consumption and identify practical opportunities to improve energy efficiency. ESOS compliance operates in four-yearly phases, with energy assessments and additional reporting requirements applying throughout the compliance cycle.
Next ESOS Deadline – Progress Update due by December 5th, 2026
The ESOS Phase 3 compliance deadline passed on the 5th June 2024. The next ESOS deadline is the submission of the Phase 3 Progress Update to your action plan by 5th December 2026.
The Progress Update reports against the commitments made in your Action Plan, including measures implemented, measures not implemented by their proposed date and the estimated energy savings achieved.
Does my Organisation Need to comply to ESOS?
For ESOS Phase 4, qualification will be determined based on the organisation’s position on 31 December 2026. The criteria for ESOS compliance are for large organisations that meet the following:
- 250 or more employees; or
- An annual turnover in excess of £44m and an annual balance sheet total of more than £38m
- UK registered establishments of overseas companies may also be required to participate where their wider corporate group’s UK activities meet the ESOS qualification criteria.
Organisations include corporate bodies and partnerships, and any unincorporated body that is conducting trade whether for profit or otherwise, are all subject to ESOS.
Public sector organisations are not subject to ESOS, although some universities with significant private funding may well be.
What does ESOS Require?
ESOS requires qualifying organisations to assess their energy consumption, identify areas of significant energy use and identify energy-saving opportunities through an ESOS assessment and approved compliance routes.
Key ESOS requirements include:
- At least 95% of your organisation’s total energy consumption must be identified as significant energy consumption and covered through an ESOS energy audit and/or an applicable deemed compliance route. This must be reviewed and approved by a qualified ESOS Lead Assessor.
- Additional detail on the calculation of energy consumption which must include energy intensity ratios.
- An explanation of how site visits that are conducted for energy audits are representative of energy use (if not all sites are being audited).
- Ensuring all members of the corporate group have access to the ESOS report findings.
- The cost-benefit analysis and a plan for implementing energy saving opportunities.
- For Phase 3 participants, the ESOS Action Plan was due on 5 December 2024, followed by the annual Progress Updates due on 5th December 2025 and 5th December 2026.
ISO 50001 certification can also provide a route to ESOS compliance where the certification covers the required energy consumption and meets the relevant ESOS requirements.
Click here for more detailed information on preparing your ESOS assessment.
Avoid Serious Penalties
The Environment Agency (EA) can take enforcement action against organisations that are required to comply with ESOS but fail to meet their obligations. Depending on the breach, potential ESOS penalties include:
- Failure to notify: a fixed penalty of up to £5,000, plus an additional £500 for each working day the organisation remains in breach after service of the penalty notice, up to a maximum of 80 working days.
- Failure to maintain adequate records: a fixed penalty of up to £5,000, plus the cost incurred by the compliance body in carrying out sufficient auditing activity to confirm that the organisation has complied with ESOS. The organisation may also be required to take specified steps to remedy the breach.
- Failure to undertake a compliant energy audit: a fixed penalty of up to £50,000, plus an additional £500 for each working day the breach continues after service of the compliance notice, up to a maximum of 80 working days. For organisations entering ESOS for the first time, the Environment Agency will normally apply a lower initial penalty of up to £5,000 for this breach.
- Failure to comply with a compliance, enforcement or penalty notice: a fixed penalty of up to £5,000, plus an additional £500 for each working day the organisation remains in breach, up to a maximum of 80 working days.
- Making a false or misleading statement: a fixed penalty of up to £50,000.
- Publication of non-compliance: where a publication penalty applies, the regulator may publish details of the organisation, the legal requirement that was not complied with and the amount of any financial penalty imposed.
Regulators will not currently take enforcement action or issue a financial penalty solely for the non-submission of an ESOS Action Plan or Progress Update. However, failure to submit will be published by the Scheme Administrator.
Have you received an ESOS Phase 3 enforcement notice?
Speak to our energy experts to begin your compliance journey
Ensure ESOS Compliance With PES
Professional Energy Services can help your organisation ensure ESOS Compliance.
Our energy consultants have a wealth of industry experience in carbon compliance and coupled with our energy management software, we can perform the required energy audits to generate a consumption report and act as the required lead Assessor for ESOS compliance.
You will receive:
- End-to-end ESOS compliance support including:
- ESOS Audit and consumption report
- ESOS Action Plans and annual Progress Updates
- Energy saving strategies to implement
- Phase 4 qualification and compliance support
- Time back to focus on the day to day of running your business
- ESOS report findings to aid compliance to other carbon initiatives such as SECR
- Support you during any conversations with the Environment Agency
Reduce your energy costs at the same time as gaining compliance
Partaking in ESOS not only ensures compliance and avoids any penalties, it also allows your business to reduce its energy costs by reducing consumption. At Professional Energy Services we’ll help you to implement these energy saving strategies from your ESOS report so you can benefit from compliance and energy efficiencies at the same time.
Frequently Asked Questions on ESOS
No. ESOS helps to discover energy inefficiencies and waste with the goal of ensuring businesses to change behaviour to reduce energy consumption. It is not a direct tax on CO₂ emissions.
A smaller “undertaking” or organisation shall not be excluded from ESOS participation if it is part of a larger organisation containing at least one qualifying “large undertaking.”
For corporate groups that participate in ESOS, the highest UK level of that entity will be responsible for ensuring the group as a whole is ESOS compliant.
An accurate ESOS assessment requires an evaluation of 95% (formerly 90%) of an eligible organisations’s total energy usage. This figure can be presented in a number of ways, whether by fuel type, site, organisation, etc., provided that a fair approach is used for analysis. The energy you are choosing to exclude is referred to as your ‘de minimis energy consumption.’
There are two ways to decide how to perform ESOS with their own costs of either:
- In-house – performing the energy audit and obtaining an approved lead assessor certification via a professional registered body.
- Outsourcing – working with an energy consultant like PES
Both of these methods have their own costs, outsourcing may have a higher cost but comes with the security of knowing an expert will be efficient and able to create the task correctly. Conducting ESOS in-house may be cheaper but comes with more complications of gaining approval of your lead assessor from the registered bodies and also your own team may be more prone to errors as not as experienced as a consultant and the cost of your own time to conduct your ESOS assessment.
However, regardless of cost if your organisation follows the energy-saving recommendations that an audit brings, your cost reductions on your energy bill will likely outweigh the cost of performing ESOS. The UK government has estimated organisations performing ESOS could save 13.5 times the actual cost of the energy audit.
ESOS assessments operate on a four-year compliance cycle. Phase 3 reporting requirements continue until the final Progress Update on 5th December 2026, while the Phase 4 compliance period is already underway, with the Phase 4 qualification date on 31st December 2026 and the compliance deadline on 5th December 2027.
The original timeframes of the ESOS are in the table below when the scheme was launched in 17 July 2014.
| Phase | Qualification Date | Compliance period | Compliance Date |
|---|---|---|---|
| 1 | 31st December 2014 | 17th July 2014 – 5th December 2015 | 5th December 2015 |
| 2 | 31st December 2018 | 6th December 2015 – 5th December 2019 | 5th December 2019 |
| 3 | 31st December 2022 | 6th December 2019 – 5th June 2024 | 5th June 2024 |
| 4 | 31st December 2026 | 6th December 2023 – 5th December 2027 | 5th December 2027 |
Though the Environment Agency administers the scheme for the entire UK, it only regulates the scheme in England. For other UK territories, other bodies are responsible for overseeing regulation. For example, the Scottish Environment Protection Agency, Northern Ireland Environment Agency, and Natural Resources Wales regulate ESOS separately.
Offshore, the Secretary of State for the Department for Energy Security and Net Zero regulates ESOS.
No. An approved Lead Assessor should oversee the ESOS process. Approval comes from gaining membership by an approved professional body register. An in-house employee will either need to apply to qualify for this role, or a company will need to work with an external consultant.
The Environment Agency publishes most of the information provided through the ESOS notification of compliance, excluding personal and commercially sensitive information. ESOS Action Plans and Progress Updates are also published
No, penalty fees do not apply if an organisation fails to implement recommendations. The ESOS assessment and action plan are mandatory. However, implementing the energy consumption reducing strategies in place will reduce your energy spent and help an organisation recoup the cost of the ESOS assessment.
ESOS participants are responsible for all energy they consume, but not for energy that they supply to a separate third party such as a tenants renting part of a site/property that is metered. However, the landlord would be responsible for energy usage in common shared areas of a building.
Updated guidance for ESOS Phase 4 was published in July 2026. Changes include the removal of Display Energy Certificates and Green Deal Assessments as alternative compliance routes, new requirements to report energy savings achieved during the compliance period and a requirement to review progress against the previous Action Plan. Phase 4 will also introduce a third annual Progress Update following the Phase 4 Action Plan.
You still need to comply to ESOS but you can potentially be efficient with the data from the energy audit and consumption report and reuse it for other carbon compliance schemes such as Streamlined Energy and Carbon Reporting (SECR).
ISO 50001 can be used as a route to ESOS compliance where the certification covers the required energy consumption. However, the organisation must still determine whether it qualifies for ESOS and complete the applicable calculation, evidence, director sign-off and notification requirements.
Speak to a consultant about your ESOS Compliance