Proposed changes to ESOS to be implemented half-way through Phase 3!

BEIS releases response to the Strengthening ESOS consultation

Today the Department for Business Energy and Industrial Strategy (BEIS) has finally published its response to the Strengthening the Energy Saving Opportunity Scheme (ESOS). The feedback shows widespread support for the changes across the respondents and a general push to improve ESOS.

You can view the government's response here

On the 19th July, Lord Callanan announced intentions to include powers to make the necessary changes to ESOS in the Energy Bill*. It intends to bring the changes to regulations into force ahead of the 5 December 2023 compliance deadline, setting out the requirements, which ESOS participants will need to comply with in Phase 3. The qualification criteria for Phase 3 will not change, but the thresholds are now set in GBP.

The key changes are:

  • A standardised template for including compliance information in the ESOS report, generally comprising ESOS information the participant should already have available
  • The reduction of the 10% de minimis exemption to up to 5%
  • The addition of an energy intensity metric in ESOS reports
  • Requirement to share ESOS reports with subsidiaries
  • Requirement for ESOS reports to provide more information on next steps for implementing recommendations
  • Requirement for participants to set a target or action plan following the Phase 3 compliance deadline, on which they will be required to report against for Phase 4
  • Collection of additional data for compliance monitoring and enforcement

    In addition, the Environment Agency will work with ESOS professional bodies to identify which changes could be made to improve the quality of ESOS audits in Phase 3 through more active monitoring of ESOS lead assessors’ work.

    What does this mean?

    The changes for Phase 3 will involve additional reporting to the Environment Agency via the notification portal. We believe this will generally not require re-visiting site level audits that meet the requirements under the current ESOS regulations. However, the changes mean some organisations may be required to audit additional sites as a result of the reduced de-minimis.

    Net Zero Changes

    ESOS participants may implement the addition of a net zero element to ESOS audits in Phase 3 on a voluntary basis. BEIS is currently working with BSI on the production of a new net zero audit PAS standard to facilitate this. Participants can also implement other Phase 4 changes on a voluntary basis in Phase 3.

    Removal of DECs from Phase 4

    Government response: "in response to the high level of support for this proposal, and given that only a small proportion of ESOS participants have used these compliance routes in previous phases of ESOS5, as well as the concerns of the Environment Agency that using these compliance routes alone do not meet ESOS best practice standards, we will be removing Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) as compliance routes for ESOS in Phase 4. We would discourage organisations from using these compliance routes for Phase 3 but understand that some organisations may have already commissioned DECs or GDAs."

    Non-Domestic Technical Team Leader, Steve Windmill commented:

    “It’s been a long time coming but we are very happy to see the response to the consultation and BEIS taking some good strides towards improving ESOS. We are disappointed that these changes are expected to be implemented as we near the end of a phase. We hope this change will be quickly adopted and implemented by all. Elmhurst will be ensuring our members are updated with all the changes in due course.”


    *https://hansard.parliament.uk/lords/2022-07-19/debates/8F94D9C0-B93E-4A93-A5D2-F86908CA35FC/EnergyBill(HL)

    Read the government's response here


    Article Published: 29/07/22

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