The aim of the government’s proposed changes is to increase the energy and carbon savings associated with the ESOS scheme and to align with the UK target of becoming Net Zero by 2050.
ESOS is a UK legislation which mandates organisations to audit their estates and establish opportunities for saving energy.
In July of this year, the government declared its intent to make changes to current ESOS legislation. If the changes are accepted after going through the parliamentary process, they will come into force before the Phase 3 compliance deadline of the 5th of December 2023.
ESOS applies to your organisation if:
- You employ more than 250 employees
- You are within a corporate group where an organisation within the group qualifies for ESOS
At present, the thresholds are set in euros and applies to organisations if they have a turnover and balance sheet exceeding €50 million and €43 million. If the government’s intentions are successful, then the thresholds will change from € to GBP, and apply to organisations that have a turnover and balance sheet exceeding £44 million and £38 million.
The government also intend to make changes that include:
The addition of compliance data
Currently, there is a wide range of energy auditing methods used when reporting ESOS, as no set standards or requirements are in place. This means current reports vary in consistency and quality. If the government changes are accepted, then ESOS reports will have to include a standard template that includes compliance information and data.
The reduction in the De Minimis exemption
At present, the De Minimis is set at 10% meaning that organisations can exclude 10% of their total energy consumption through the De Minimis exemption.
If the government are successful in changing the legislation, then the De Minimis exemption would change from 10% to 5%, meaning that organisations may have to audit additional sites from their estate.
Adding an energy intensity metric to reports
If proposed changes are agreed upon, then the addition of a comparable energy intensity metric will have to be included in the report.
A comparable energy metric is a way of fairly comparing one site to another. For example, if you had a large building of 1000m2 and a small building of 10m2, you would expect the larger building to consume more energy than the smaller building. However, that doesn’t mean the larger building is using energy less efficiently than the smaller building.
A comparable metric such as a building’s floor area would be a way to fairly determine which is the least efficient site. You can then calculate the consumption per m2 of the property and then compare the results to see which is the greater number.
Sharing the ESOS report
Currently, once an ESOS report has been submitted to the environmental agency then it is up to the organisation that ordered the report to share the results with relevant personnel. Under the new government proposals, organisations will have to include sharing the completed ESOS report with subsidiaries i.e., the corporate group of the organisation.
Setting further targets
ESOS reports include recommendations that are calculated for each individual site, that highlights cost-effective investments with maximum impact. Currently, organisations have no obligation to act on these recommendations, but if the proposed changes are passed successfully ESOS reports will have to include information on how an organisation plans to act on the recommendations. These targets or action plans will be reported against an organisation’s Phase 4 submission.
In Summary
If the government are successful with its aim to change current ESOS legislation, then changes will likely come into force during Phase 3, meaning organisations will have to make changes to their submissions ahead of the compliance deadline. Yet some options may take longer to go through the parliamentary process and be implemented for Phase 4 and future phases.
How Can We Help?
At Compliance365 we have experienced Lead Assessors that can help you carry out and review your ESOS submission ahead of the Phase 3 deadline.
Compliance365 has created some free resources via our website to help you better understand if you must comply with ESOS compliance.
Contact the team today on 01924 669940 or send an email to sales@compliance365.co.uk to find out more.