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Understanding ESOS: What to do and how to respond to enforcement letters

ESOS is an Energy Savings Opportunity Scheme which is a mandatory energy efficiency assessment programme for large organisations in the UK.
January 6, 2025
ESOS is an Energy Savings Opportunity Scheme which is a mandatory energy efficiency assessment programme for large organisations in the UK.

The scheme is designed to help businesses identify cost-effective ways to reduce energy consumption and improve their energy efficiency and is administered by the Environment Agency.

It forms part of the UK’s efforts to meet its obligations under the European Union’s Energy Efficiency Directive which requires member states to promote energy efficiency and the reduction of energy use in large organisations. Despite Brexit, the scheme remains relevant.

It also affects not-for-profit bodies and other non-public sector organisations large enough to meet the qualification criteria.

But what do you have to do under ESOS, what is an assessment and what should you do if you receive an enforcement letter from the Environment Agency?

David Thomas, Head of Energy & Sustainability at Vail Williams, explores.

About the Energy Savings Opportunity Scheme (ESOS)

Organisations that are big enough to qualify for ESOS must carry out ESOS assessments every four years, this includes companies with 250 or more employees, or an annual turnover of over £44 million, and an annual balance sheet total of more than £38 million.

An ESOS assessment is effectively an audit of the energy used by your building(s), industrial processes and transport.

What does your organisation need to do under ESOS?

To comply, you must submit a report to the Environment Agency (in England) or the relevant authorities in Scotland, Wales, and Northern Ireland, to demonstrate compliance with the scheme.

The report must detail the audits, energy-saving measures, and potential savings your business is making or committing to.

You have to submit the results of your audit every four years, to demonstrate how your organisation is complying with the scheme, and working towards reducing energy consumption in areas such as your commercial premises, transport, and industrial processes.

By identifying inefficiencies, you can reduce energy usage, lower operational costs, and contribute to the UK’s sustainability goals by cutting down on carbon emissions.

What happens if you don’t comply with ESOS?

The deadline for the next phase of ESOS compliance is in June 2024.

If you qualified for ESOS and failed to achieve compliance with it, your business could face a penalty of up to £50,000. First, you would receive an enforcement letter from DEFRA (Department for Environment, Food & Rural Affairs).

The letter could be sent because you missed the deadline for completing your energy audits or failed to submit the necessary compliance reports to the relevant authorities.

What should you do if you receive an ESOS enforcement letter?

The letter should detail the reason for the enforcement action, such as a missed submission, failure to conduct the energy audit, or any other non-compliance. Understand what exactly went wrong and why the enforcement notice was issued.

From there, you can check the detail, including dates and deadlines to ensure the information is correct and that you are aware of what you need to do and by when, in terms of taking corrective action.

If you have not yet completed your energy audits or complied with the ESOS submission requirements, you must do so as soon as possible.

Engage an accredited ESOS Lead Assessor to conduct the audit if necessary. The audit must cover all areas specified under the ESOS scheme, including energy consumption in buildings, transport, and industrial processes.

If the issue is related to not submitting the required report, gather and submit the necessary documentation to the relevant authorities (typically the Environment Agency in England, or the equivalent in Scotland, Wales, or Northern Ireland).

If an ESOS enforcement letter has landed on your desk and you don’t know where to start, our Energy & Sustainability team, working with trusted supplier, Vital, can help. Get in touch for more information.