ESOS Phase 4

ESOS (Energy Savings Opportunity Scheme) Phase 4 is the UK’s mandatory energy-efficiency audit regime for large organisations, running from 6 December 2023 to 5 December 2027. If, on 31 December 2026, your business employs 250+ people or exceeds £44M turnover and £38M balance sheet total, you're required to comply.

Key updates include the removal of Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) as compliance routes, and the requirement to report progress against your ESOS Action Plan—with explanations if commitments aren’t met. Mandatory net-zero reporting is delayed until Phase 5 (2027–2031), though voluntary alignment with new PAS 51215 standards is encouraged.

1. Who needs to comply?

Businesses in the UK that, on 31 December 2026, have ≥ 250 employees or exceed £44M turnover and £38M balance sheet, including corporate groups with qualifying members.

2. When is the compliance deadline?

The audit period runs 6 Dec 2023 to 5 Dec 2027, with the final submission due by 5 December 2027.

3. What changed in Phase 4?

Compliance via DECs and GDAs is no longer accepted. You must include progress updates in your audit and explain deviations from your Action Plan.

4. Is net-zero reporting mandatory?

Not yet—it’s delayed until Phase 5 (2027–2031). However, you can voluntarily follow PAS 51215-1/2:2025 to prepare early.

5. What are PAS 51215 standards?

PAS 51215-1 guides combined energy and decarbonisation assessments, while Part 2 defines assessor competencies. They're voluntary in Phase 4.

6. What’s expected in the Action Plan?

You must outline energy-saving measures, timelines, expected savings, organisational responsibilities, and secure director sign-off.

7. How often must you report progress?

Annual progress updates are required, showing which measures were implemented—or why not.

8. What penalties apply for non-compliance?

You may face fines—typically a base amount (e.g., £50,000) plus daily penalties if overdue.

9. What standards must energy audits meet?

Audits must adhere to BS EN 16247 or ISO 50002 standards for quality and consistency.

10. How should SMEs approach compliance?

Start early: confirm eligibility, appoint a qualified lead assessor, gather 12 months of energy data, audit significant consumption areas, draft your Action Plan, and set up annual updates.

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