ESOS enforcement delayed until January

The Environment Agency has announced that the looming 5 December deadline for the first Energy Saving Opportunity Scheme (ESOS) audits will not be properly enforced until the New Year.

The announcement comes as part of new guidance following concerns that a large proportion of participants in the scheme are likely to miss the December deadline.

As a result, the Environment Agency has decided not to take enforcement action for late compliance provided notification of compliance is received by 29 January 2016.  

The ESOS initiative requires all UK organisations with over 250 employees, a turnover of more than €50 million (£37 million) or a balance sheet of €43 million (£32 million) to undertake specialist energy efficiency audits every four years which cover at least 90 per cent of their energy use. Companies that fail to comply face a basic fine of up to £50,000, plus £800 per day for a maximum of 80 days.

The scheme is designed to encourage large businesses to “look to the future” by identifying opportunities to cut their energy use and emissions.

Teething problems

While large organisations that also fall under the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme already have experience of dealing with a compulsory energy-related scheme, around 80 per cent of ESOS participants are estimated to be facing an instrument of this kind for the first time.

The scheme has therefore struggled from a lack of awareness and progress has also been hampered due a shortage of approved lead assessors. As of this month, just 375 businesses have notified the Environment Agency of compliance, out of an estimated 14,000 that fall under ESOS criteria.

The Environment Agency’s decision to delay enforcement of these rules until the end of January is designed to give more time to companies that are actively making progress towards compliance.

New guidance

Companies will still be required to submit documentation by 5 December, but this can include information on why they are unable to comply by the deadline and what efforts are being taken to achieve compliance. 

Sam Davidson, head of consultancy services at Utilitywise, said: “It’s encouraging that officials will bear with businesses that are actively making strides to comply and can evidence progress of their compliance journey on 5 December. Be aware, though, if your organisation cannot comply fully by 5 December, you will still need to inform the Environment Agency of this”.

In addition, companies choosing to comply through achieving the ISO 50001 energy management standard will have a longer grace period and will only require a lead assessor if the certification fails to cover 100 per cent of their energy use.

Ensuring compliance

There a number of different ways to ensure compliance with ESOS, including ISO 50001, direct audits from assessors and Display Energy Certificates (DECs).

Government guidance designed to help businesses choose the best approach for their needs is available here.

Posted under Energy Efficiency and Environmental Regulations and Legislation on 20 October 2015