ESOS Phase 3 & 4 Update

ESOS, the government-led mandatory reporting scheme for businesses, saw secondary legislation introduced on November 7th.

The legislation introduced new requirements for businesses reporting on their energy consumption. This came as a result of the 2023 Energy Act, which passed in October 2023.  

The ESOS Phase 3 reporting deadline is June 05 2024 and, while the Environmental Agency are yet to update their full guidance, a number of key points have emerged.

This is what we know so far: 

• Organisations will need to disclose their reason for qualification, their lead assessor’s details, their Total and Significant Energy Consumption (TEC & SEC) and their route to compliance.  
• The ESOS assessment must cover 95% of a company’s Total Energy Consumption (TEC), and they must report on energy intensity metrics and previous ESOS data from Phase 1 and 2.  
• Identifying potential risks to organisations in moving to net zero and emission reduction trajectories
• Information to support organisations in creating a net zero plan or helping them to meet their existing carbon reduction strategies
• Increased clarity and guidance on site audit sampling, including most likely a minimum threshold for both the number of buildings audited and percentage of total energy consumption sampled.
• Reports will need to meet either ISO 50002 or EN 16247 auditing standards. Currently, this is only a recommendation in Phase 3 guidance.
• Display Energy Certificates (DEC) and Green Deal Assessments will be removed as a route to compliance.
• For organisations not in scope for SECR, a reporting function on the ESOS web portal will be developed to allow for annual progress reporting. From Phase 4 onwards a requirement will be introduced that if the goal has not been met, the participant must explain why.
• Following SECR, it will become mandatory for some data, such as a minimum energy or carbon reduction targets and net zero assessments to be made public.
• ESOS reports will be required to improve the collection and monitoring of energy data, setting of controls, and appropriate staff training, both within the descriptive element of the ESOS report and within audit recommendations.
• Ensuring that businesses are alert to their future electricity demand in the context of system impact will be considered as part of the net zero assessment from the Phase 4 compliance period.
  

What will this mean for Phase 4? 

Net zero targets, although optional for the upcoming Phase 3, are expected to become mandatory for the following phase. As a result, businesses should start to include net zero for Phase 3, to be fully prepared for the next phase of ESOS. 

Likewise, organisations will be required to set public targets and action plans by the 05 December 2024 and report on their annual progress thereafter. This can be part of a company’s SECR reporting, or via the ESOS online portal.  

As a result, there will be greater visibility and public scrutiny on what companies are actively doing to decarbonise their business practices and work towards the goal of reaching net zero emissions.  

How can you get esos support? 

With increased pressure for businesses to act on their ESOS recommendations, True offers an ideal solution for businesses to manage their ESOS reporting in a simple and efficient way. 

Working with carbon reporting specialists, our team can take responsibility for the entire process of ESOS reporting, uploading all of your emissions data into True, which will visualise the full scope of your emissions and provide carbon cutting actions across your organisation.

As a leading provider of net zero strategies, True will guarantee your ESOS reporting is accurate and your business will not be penalised by the UK government. 

Get started with ESOS reporting with True, here.