ESOS phase 3: what you need to know

The deadline for phase 3 of the Energy Savings Opportunity Scheme (ESOS) is fast approaching so it is important that large businesses across the country understand the qualification criteria and how to become compliant

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The deadline for phase 3 of the Energy Savings Opportunity Scheme (ESOS) is fast approaching, with the scheme’s qualification date being 31 December of this year. If your business meets the qualification criteria on that date then you must comply with the scheme.

The final deadline for compliance with phase 3 is 5 December 2023. So, it is important that large businesses across the country understand the qualification criteria and how to become compliant.

So, let’s take a look at how you can plan your route to phase 3.

Who qualifies under phase 3?

It is likely that if your company fell within the scope of ESOS for previous phases of compliance, then you will also qualify for phase 3. However, if you qualified for phase 2 but no longer qualify for phase 3, then ensure you have checked two years’ of financial accounts. We would suggest you notify the Environment Agency of the change.

ESOS is mandatory under phase 3 for large UK companies that meet one or more of the following criteria:

  • Employ at least 250 people.
  • An annual turnover in excess of £44 million and an annual balance sheet in excess of £38 million.
  • Part of a corporate group containing a UK company that meets the above criteria.

Businesses that qualify must carry out certain obligations within the timeline of phase 3. You will need to measure your total energy consumption and identify areas of significant energy use.

Qualifying businesses are advised to start the process as soon as possible, as we are now over half way through Phase 3 and enforcements are issued for late compliance.

Why comply now?

Quality Lead Assessors are limited – There’s estimated to be only one Lead Assessor for every 10 organisations – even fewer are accredited to the more well-known bodies.

Get a head start on your competitors – An early start means you can avoid any bottleneck in resources as the deadline approaches. Audits should be started now and can be completed at any time during the phase. They should not be left until 2023, as this may increase the risk of non-compliance by the 5 December 2023 deadline.

Ensure compliance and protect yourself from fines – Start now to make sure you are compliant in time. In Phase 1, approximately 40% of organisations were still not compliant four months after the deadline. The ESOS scheme is heavily enforced and regulated – the fines are steep.

Start sooner, save sooner – You can achieve significant financial savings by improving energy efficiency. The sooner you comply with ESOS, the sooner you can start implementing recommendations from your report. We would suggest you use your financial reporting year or the 2022 calendar year for collecting this data.

How can EIC help?

Becoming compliant with a constant stream of new legislation can seem tricky, and time consuming. But we are here to keep the process simple, and the benefits significant.

At EIC, we prioritise our clients and their compliance needs – with a number of solutions, tailored to their business needs. Our expert team and years of experience means that we are accustomed to finding effective ways of making your business compliant, improving efficiency, and reducing costs.

We also offer a 10% discount for businesses that sign up to our joint four-year ESOS and Streamlined Energy and Carbon Reporting (SECR) package.

Get in touch to find out how EIC can help you to become ESOS compliant, and begin your journey towards a more sustainable future.