ESOS Compliance: The Action Plan and Phase 4
Share on LinkedIn5 Sep 2024
The past four years have seen the largest change to the Energy Savings Opportunity Scheme (ESOS) compliance requirements since its inception back in 2014. What was previously a matter to be considered every four years has resolved itself to an annual exercise. An Action Plan has been legislated with the purpose of getting businesses to consider how they can utilise the recommendations presented in their ESOS reports. Moreover, pressure on businesses has increased to provide additional motivation as certain details of the Action Plan and Annual Progress Updates are set to be published.
What’s Happened and When
In June of 2023 the Environment Agency (EA) released a statement of intent to strengthen the ESOS Phase 3 Phase 3 requirements for large businesses. The aim, ultimately being, to ensure that a higher quality of audits were being undertaken and a more meaningful outcome would be generated to encourage businesses to implement energy saving measures. Stakeholder pressure meant a new ESOS Phase 3 deadline was provided - 5 June 2024, with delays in the online portal pushing the revised deadline back again to the 6 August 2024. Whilst in previous phases, after ESOS submission, there would typically be no work required until the following submission, the Government have introduced an Action Plan which requires work to be completed by latest the 5 March 2025 (the deadline from the 5 December 2024 is still advised to be met).
Action Plan
An ‘Action Plan’ is to be produced covering the period 6 December 2023 to 5 December 2027; although calendar year 2023 has largely passed, this is to account for any improvements that have been already made. The Action Plan will provide high level details of;
- Each energy efficiency action commitment.
- When the action shall be implemented.
- Associated estimated energy reductions.
- Details on estimations made.
- A breakdown by organisational purpose.
- Director sign off.
Companies will only be required to complete this Action Plan if they were in scope at the qualification date for ESOS Phase 3 (31 December 2022) with the submission deadline for this action plan being on the 5 December 2024. However, the Environment Agency has notified participants that latest submission can still be complete before the 5 March 2025. Importantly, the Action Plan can be multipurpose to include additional information to enhance the organisation’s energy reduction or decarbonisation journey (e.g. associated carbon reductions). The action plan then requires annual updates detailing the progress made throughout the previous 12 months.
Annual Progress Updates
Every year following the submission of the Action Plan a progress update must be made to highlight if the proposed measures were implemented. It can include an explanation as to why the Action Plan might not have been followed, or include additional information to explain how the organisation may have surpassed their targets. However, the core requirements are largely similar to that of the Action Plan. The timeline for deadlines is as follows;
| Deadline | Requirement |
| 5 December 2024 | Action Plan Submission (Original Deadline) |
| 5 March 2025 | Action Plan Submission (Latest Submission) |
| 5 December 2025 | Annual Progress Update 1 |
| 5 December 2026 | Annual Progress Update 2 |
| 31 December 2026 | ESOS Phase 4: Qualification Date |
| 5 December 2027 | ESOS Phase 4: Submission Deadline |
Publication of Information
After ESOS Phase 3, a prominent change notified was the publication of a broad range of information. The publication includes, but is not limited to; the compliance route taken, total energy consumption, intensity ratios, total potential energy savings, the action plan, and the annual progress updates.
Certain details from both the Action Plan and the updates will be published by Environment Agency within the six months following submission.
Phase 4 – As We Know It
It is unclear on how the compliance may change in the future past Phase 3, however, as it stands, Phase 4 will build off the current strengthening provided and, to bridge the gap between phases, annual reporting updates must be provided by businesses on their energy efficiency implementation progress. The Action Plan for the following phase is planned for submission in 2028 and will not be submitted at the same time as the Phase 4 submission. There have been widespread changes to the current ESOS legislation that will impact businesses differently depending on the organisation’s compliance route and businesses practices. These changes will be critical to understand going into the next Phase of ESOS to ensure businesses yield the greatest output from the compliance
How NUS Can Help Your Business
Our UK office has a dedicated team committed to international Energy and Sustainability Services (ESS). Our ESS team can carry out energy and carbon compliance, decarbonisation road-mapping, and support with implementation of onsite generation, meeting the requirements of the Energy Efficiency Directive Article 8 (EED A8), Energy Savings Opportunity Scheme (ESOS), Climate Change Agreement (CCA), Carbon Reduction Plan (CRP) and Streamlined Energy and Carbon Reporting (SECR) and much more.
Please contact NUS online or email UKSustainability@nusconsulting.co.uk for more information.
More: Energy Market Commentary, Climate Change Agreement (CCA), Energy Efficiency Directive Article 8 (EED A8), Energy Savings Opportunity Scheme (ESOS), Streamlined Energy and Carbon Reporting (SECR)
