Energy Savings Opportunity Scheme (ESOS) Phase 3 in 2023

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ESOS Phase 2 Explained

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for Organisations in the United Kingdom that meet the qualification criteria. These assessments are audits of the energy used by their buildings, industrial processes and transportation fuels to identify cost-effective energy saving measures.

Am I affected by ESOS?

Organisations in the UK must assess whether they are required to participate in ESOS on the qualification date of each phase. Organisations or the Organisational Group (Companies / Enterprises), and the qualification criteria below, are assessed as the organisation stands on 31st December 2022 for ESOS Phase 3 will need to comply by 5th December 2023.

  1. An Undertaking / organisations which has 250 or more employees in the UK. Part time employees
    count as one employee.
  2. An Undertaking /Organisations which has fewer than 250 employees, but has:
    • An Annual turnover exceeding £44m
    • and an annual balance sheet exceeding £38m
  3. Part of a corporate group, which includes an undertaking that meets criteria 1 or 2 above.

Exchange rates to Sterling (£) will be confirmed on the qualification date for each given
phase (for Phase 3 this is on the 31st December 2022).

What must you do in 2023 for Phase 3?

Appoint an Accredited Lead ESOS Assessor who is accredited to compile and assess your compliance. You are required to have measured your total energy and fuel consumptions across a 12-month reference period which must include the qualification day. You can measure your total energy consumption in either energy units (i.e. kWh) or energy expenditure (i.e. £). Once you have measured your total energy consumption.

The data you use as the basis for ESOS Phase 3 reporting should be based on a 12-month period that includes the qualification date (31 December 2022) and ends before the compliance date (5 December 2023). This is known as your reference period. The earliest it could start is 1st January 2022 and the latest it could end is 4 December 2023…


  • Calculate the total energy and fuel consumptions within each organisation/s or across the Group
  • Identify areas of significant energy consumption
  • Appoint a Lead ESOS Assessor to oversee the ESOS assessment
  • Complete ESOS compliant energy audits onsite
  • Report compliance to the Environment Agency following review by a board level Director
  • Keep appropriate records to evidence compliance with ESOS
  • Ongoing support following compliance to implement the recommendations derived from the ESOS report
Compliance Phase 2 New

Routes to ESOS Compliance

ESOS Option 1 – Display Energy Certificates (DECs) and accompanying advisory reports

These are a cost-effective solution for small building portfolios, they will contribute to the total building energy consumption requirements, however, they are restricted in terms of what they measure and a Display Energy Certificate (DEC) is required for each building. For large portfolios this may ultimately cost more than other routes such as ESOS Energy Audits. DECs are only available for buildings located within England and Wales, not available in Scotland.

ESOS PhasesESOS Qualification dateESOS Four-year complianceESOS Compliance date
Phase 131-Dec- 1406/12/2011 to 05/12/201505 -Dec- 15
Phase 231-Dec-1806/12/2015 to 05/12/201905-Dec-19
Currently within Phase 331-Dec- 2206/12/2019 to 05/12/202305-Dec- 23
ESOS Option 2 – ESOS Energy Audits

We offer a bespoke ESOS energy auditing service, you may already have undertaken energy audits during the ESOS Phase 2 compliance period under other schemes. Our ESOS Lead Assessors will be able to advise you if we this will meet the minimum ESOS standards. The costs of ESOS energy audits will dependent on the scope of works needed versus energy and fuel data already collected that can contribute towards the total consumption requirement.

ESOS Option 3 – An ISO 50001 certified Energy Management System

This is an alternative route to an ESOS energy audit and will form an overall energy management system for effective management of energy consumption. ISO 50001 could be employed by a multi-national company across its operations within the UK and overseas. It does require more work and the ISO 50001 is above the minimum requirement level of ESOS. ISO50001 is an internationally recognised standard and your company will gain additional prestige by having this accreditation. Although it will longer to put in place, typically 18 – 30 months for a reasonable size company. Audits must be completed at a minimum of every four years from the date of the previous audit.

What if we do not comply to ESOS?

Failure to correctly comply with the scheme leads to fines of up to £50,000 and additional fine of £500 per day for a maximum of 80 days or until compliance has been demonstrated. Non-complying companies will also be named and shamed on the Environmental Agency website.

List of incurring failures and fines for not complying with ESOS:-

  • Failure to declare compliance on time – £5,000 plus £500 per working day up to 80 days
  • Failure to maintain adequate records – £5,000 fixed penalty
  • Failure to comply – £50,000 plus £500 per working day until resolution
  • Failure to comply with an enforcement notice – £5,000 plus £500 per working day
  • Falsification – Up to £50,000
  • Non-complying companies will also be publicly named by the Environment Agency.

Where can I find help?

If you think you may qualify for the ESOS scheme or you are not sure, please contact us to discuss compliance in more detail. We can help you identify if you need to comply, and help you take steps to ensure compliance where required. If you are obligated and yet to comply, the more proactive you are the better. At LCEA Ltd we provide solutions on how the ESOS scheme works and how we can help you meet the requirements of the scheme, reduce energy consumption and save you money.

Update from the ESOS Regulator

Previously with ESOS Phase 1 we saw around 7,000 organisations submitting a notification of compliance. The EA has served over enforcement notices and issued Civil Penalty proceedings against organisations who were non-compliant with ESOS.

Have you received an ESOS enforcement notice from the Environment Agency?
LCEA Ltd offer a free confidential compliance identification service, see below for further details…

Free Confidential ESOS Compliance Identification Service

Our experts here at LCEA Ltd can help you quickly identify if you are obligated under ESOS, offering a complimentary compliance review. Within this review we can help you gather your energy and fuel data, determine your obligation and process the next steps if required, providing the support and protection you need to become compliant.

Our FREE Compliance Identification Service offers a number of benefits:

  • FREE tailored support
  • FREE compliance review
  • Simple, hassle-free and rapid way to see if you are obligated
  • Expert knowledge – our team have a wealth of compliance knowledge and industry experience
  • Full civil sanctions support if required
  • No obligation and completely confidential

Reasons to use LCEA Ltd as your ESOS Lead Assessor

Our assessors have a wealth of experience and we have worked with customers in a range of industries including manufacturing and distribution, road freight and aviation. Our completed ESOS compliant reports have informed our clients of significant energy saving opportunities.

  • ESOS Lead Assessors (we have in-house Lead ESOS Assessors who can act in this mandatory role for you).
  • ESOS Compliance Routes (we have offerings covering Display Energy Certificates, Bespoke Energy Audits and ISO50001).
  • We took significant sized Clients through the previous compliance for ESOS Phase 1 & 2, with a compliance rate of 100%
  • We identified significant energy, fuel recommendations and savings
  • LCEA Ltd provides a hassle-free solution ensuring your compliance with ESOS

Every moment spent on ESOS compliance is a distraction from your core business activities.

At LCEA Ltd we are knowledgeable and experienced consultants and we can take you on a journey with ESOS beyond simple compliance, maximising cost savings and adding value to the process, making your business more competitive. We are accredited and approved ESOS Leas Assessors.

With numbers of lead ESOS assessors limited, starting early will ensure availability of a quality lead ESOS assessor and ensure you can start making savings sooner and ensure that you comply with ESOS.

Call our team today if you would like to discuss potential route to ESOS ahead of the next compliance deadline.

It’s not too early to start your pathway to compliance for ESOS Phase 3.

City Of London

Contact us

Drop an e-mail to our ESOS team at we look forward hearing from you.

Latest ESOS newsletter, ESOS Guides and ESOS Publications

  • EA ESOS Newsletter Issue 03 (December 2017)

The Environment Agency ESOS Team has circulated the latest ESOS newsletter. This issue covers the public consultation on The Environment Agency’s new Enforcement and Sanctions Policy (ESP) and also provides useful information on ESOS Phase 2 Compliance.

Environment Agency ESOS letter

ESOS Phase 1 Action Required – Your Environment Agency letter was in the post, did you read it?

Environment Agency send ESOS Reminder Letter (18 May 2015) (18 May 2015) ‘Environment Agency send ESOS Reminder Letter (18 May 2015)’.

Superseded Environmental Agency ESOS guides…

Previous Environmental Agency ESOS Guides below…

Environmental Agency ESOS Guide Version 4

Comply with ESOS: a guide to qualification, compliance and notification requirements Version 4.

Ref: LIT 10094, PDF.

Complying-with-the-Energy-Savings-Opportunity-Scheme-Version-04-by-the-Environment-Agency, 08/10/2015

CRC – v – CCA – v – ESOS, All for one and one for?

Reforming the business energy efficiency tax landscape

At the Summer Budget 2015, the UK Government announced that it would undertake a review of business energy tax policy to improve and simplify the landscape.

The HM Treasury has launched a consultation seeking views and evidence on proposals to reform the business energy efficiency tax landscape and associated regulations, including the CRC Energy Efficiency Scheme and Climate Change Agreements, and energy and carbon reporting including links to the Energy Savings Opportunity Scheme (ESOS).

The review may lead to future changes in the policy landscape but does not affect the present requirements of the schemes. Participants therefore need to continue to meet their obligations as normal until any changes are introduced.

The consultation ran up until 11:45 a.m on 9th November 2015.

Ref: 1853PDF, 820KB, 30 pages.

Published on the 28th September 2015.

You can download a copy at Reforming the business energy efficiency tax landscape_CRC-CCA-ESOS_PU1853_business_energy – 28th September 2015

CRC – v – CCA – v – ESOS, All for one and one for?

Comply with ESOS: a guide to qualification, compliance and notification requirements Version 3.

Ref: LIT 10094, PDF, 885KB, 81 pages.

Complying-with-the-Energy-Savings-Opportunity-Scheme-Version-03-by-the-Environment-Agency, 17 February 2015

Environmental Agency ESOS Guide Version 1.1

HM Government (DECC) Energy Savings Opportunity Scheme Guide

The UK Government published it’s revised response (Version 1.1) to the public consultation on the Energy Savings Opportunity Scheme.


PDF, 963KB, 44 pages.

Department of Energy and Climate Change (DECC) – Approaches to ESOS Audits, 20th March 2015.

PDF 901KB, 42 pages, 20th March 2015.


Environmental Agency ESOS Guide Version 1

Complying-with-the-Energy-Savings-Opportunity-Scheme-Version-01-by-the-Environment-Agency, 16/02/2015.

Ref: LIT 10094,

PDF, 1.01MB, 78 pages.

Initial publication by the Environment Agency. Uses some text from Department of Energy and Climate Change’s (DECC) guidance document – Guide to ESOS, Version 1.1, September 2014 and supersedes the DECC guidance illustrated below.

The Department of Energy & Climate Change (DECC) Energy Saving Opportunity Scheme (ESOS) guide has been superseded by the Environment Agency’s ESOS compliance guidance version 01 which was published on the 17 February 2015. In the event of any conflict or ambiguity between the Guides, please follow the Environment Agency’s compliance guidance.

The EA guide gives a comprehensive overview of ESOS and how to comply. It details:

  • which organisations qualify for this mandatory scheme
  • what qualifying organisations need to do to comply
  • how organisations should notify the Environment Agency that they are compliant
  • when the compliance deadline is what the penalties are for not complying

The DECC Guide has been superseded by Version 3 attached: – ‘Complying-with-the-Energy-Savings-Opportunity-Scheme-Version-03-by-the-Environment-Agency-ESOS-Lead-Assessors

Enforcement and Sanctions Environmental Agency Guidance

ESOS Impact Assessments

HM Government (DECC) Energy Savings Opportunity Scheme Impact Assessment, 24/06/2014.

Uk Government’s final Stage Impact Assessment to accompany the Government Response to the ESOS consultation.

“The above publications is the copy right of Low Carbon Energy Assessors (LCEA) Ltd and is not a statement of the law, but is intended to help building / energy & sustainability managers, owners and occupiers of buildings on how the ESOS Regulations work in practice, how to apply and comply with the ESOS Regulations, what their responsibilities are under the ESOS Regulations .”
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