ESOS Phase 4 – What you need to know

As we hear more about ESOS, and more recently ESOS Phase 3, the next phase is just around the corner.

Here’s what we can tell you about ESOS Phase 4.

An introduction ESOS

ESOS (Energy Savings Opportunities Scheme) was first introduced in 2014 and is administered by the Environment Agency.

The mandatory scheme requires all large businesses within the UK to report on their energy consumption and recognise any energy saving opportunities. Each ESOS phase has a duration of 4 years, and we are currently within the Phase 3 period.

It’s important to note that there are a number of potential penalties for businesses that fail to submit a compliance notice by the set deadline. Should you find yourself in this position, you may be at risk of enforcement action, including the possibility of civil penalties.

What’s new for ESOS Phase 4?

Net zero assessment

One of the known changes happening with Phase 4 is that companies will need to complete a net zero assessment. This has been an optional element to ESOS Phase 3 but will become compulsory for Phase 4.

Audit standards

Businesses are to supply ESOS reports that have an existing auditing standard such as ISO 50002 or EN 16247.

DECs and GDAs

Both DECs (Display Energy Certificates) and GDAs (Green Deal Assessments) are to be removed as compliance routes for ESOS Phase 4.

Actioning recommendations

Starting with Phase 4, companies will be required to explain why an energy-saving goal has not been achieved following a recommendation. Participants will also be required to submit their target/action plan by 5 December 2024 and will be required to report progress annually.

Changes to qualifying thresholds

The undertaking thresholds are to change in order to align with the SECR (Streamlined Energy and Carbon Reporting). The criteria for ESOS Phase 4 will be:

  • Having at least 250 employees
  • A balance sheet of at least £18m
  • Having a turnover of at least £26m

Ultimately this means more companies will be required to comply with ESOS. And this will in turn help accelerate the UK towards its net zero targets.

Key dates for Phase 4

  • 5 December 2024 – Submit set target or action plan
  • 5 December 2025 – Phase 4 progress update #1
  • 5 December 2026 – Phase 4 progress update #2
  • 31 December 2026 – Qualification date
  • 5 December 2027 – Final compliance date

We hope that the information we have shared on ESOS Phase 4 has been both interesting and valuable to you. Share your thoughts on this subject or any energy-related matters with us via email at [email protected].

For more Government information on ESOS you can click here.

Get in touch

If you would like further guidance or information on ESOS submissions or need help complying with Phase 4 then please contact us.