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ESOS Phase 2 Update

23 August 2019
ESOS was introduced by the government to improve energy performance and meet the requirements of EU legislation. ESOS compliance is now mandatory for many UK organizations.

You will need to be ESOS Phase 2 compliant by 5th December 2019 in order to avoid fines and being publicly named. Although there some exemptions for public bodies, the regulations require all other large UK organizations to take three important steps before the compliance date.

  1. measure their total energy consumption;

  2. conduct audits to identify cost-effective energy efficiency opportunities; and

  3. report compliance to their national scheme administrator – the Environment Agency in England, SEPA in Scotland, NIEA in Northern Ireland and NRW in Wales.

A large organization is defined as any UK company that either:

  • employs 250 or more people, or

  • has an annual turnover in excess of 50 million euro (£44,845,000), and an annual balance sheet total in excess of 43 million euro (£38,566,700)

  • an overseas company with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK)

Organizations can also comply automatically in certain cases. The most effective way to do this is by providing evidence that they have achieved certification to ISO 50001, the international standard for energy management systems, across their whole organization.

This automatic compliance covers those organizations certified with a UKAS registered body to either the new 2018 standard or the previous version published in 2011. If using the ISO 50001 route to compliance, the scope of the system must cover at least 90%b of your total energy usage.

For organizations that have a compliance obligation and are using ISO 50001 to comply, you simply need to:

  • get a board level director to confirm that they have reviewed findings of your ISO 50001 certification, the organisation is compliant and the information which is going to be entered in the notification is correct.

  • make a notification to the Environment Agency (via the online notification available on the ESOS webpage on .gov.uk) to specify that this is how you are compliant with ESOS.

It is currently expected that ESOS will continue to be a requirement for those large organizations and Phase 3 will be due on December 5th 2023.

It is probably too late to consider the ISO 50001 route to compliance for December 2019 Phase 2 however many organizations after Phase 1 decided that a formal Energy Management System was a more appropriate compliance method and worked towards this end for Phase 2. NQA would be very happy to discuss how the certification route could be used for compliance for the next round of ESOS.