ESOS – The Energy Savings Opportunity Scheme

What Is ESOS? Requirements, Qualification and Deadlines

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy-assessment scheme for large UK organisations and corporate groups. Organisations that qualify must measure energy used by their buildings, industrial processes and transport, identify significant areas of consumption, assess energy-saving opportunities and complete the required reporting.

ESOS operates in four-year compliance periods. The immediate milestones are the second Phase 3 annual progress update on 5 December 2026 and the Phase 4 compliance deadline on 5 December 2027.

This guide explains how ESOS works, who is likely to qualify and what organisations should prepare. It is general information rather than legal advice. Organisations close to a threshold or with a complex group structure should check the latest government guidance.

Need practical help rather than general guidance? Explore our ESOS compliance services.

What does ESOS mean?

ESOS stands for the Energy Savings Opportunity Scheme. It was introduced through the Energy Savings Opportunity Scheme Regulations 2014 and is administered across the UK by environmental regulators.

The scheme is intended to help large organisations understand how they use energy and identify cost-effective opportunities to reduce consumption, costs and carbon emissions.

An ESOS assessment considers energy used by:

• buildings;
• industrial processes;
• transport; and
• other organisational energy uses.

Qualifying organisations usually need to complete an assessment every four years and notify the scheme administrator by the relevant deadline.

Who qualifies for ESOS?

ESOS mainly applies to large UK undertakings and corporate groups containing at least one large UK undertaking. It can apply to businesses, not-for-profit bodies and other non-public-sector undertakings.

Under the thresholds used for Phase 3, a UK undertaking qualified if, on the qualification date, it either:

• employed 250 or more people; or
• had both annual turnover above £44 million and an annual balance-sheet total above £38 million.

A corporate group qualified if at least one UK group member met the definition of a large undertaking. UK establishments of overseas companies could also be brought into scope through their wider UK corporate group.

The government decided not to proceed with a proposed change aligning Phase 4 qualification thresholds with Streamlined Energy and Carbon Reporting. However, detailed Phase 4 guidance is still being updated, so organisations should verify the final criteria before relying on a qualification decision.

ESOS Phase 4 qualification date

The expected Phase 4 qualification date is 31 December 2026. Whether an organisation qualifies is determined by its position on the qualification date, not simply by its size when the assessment is carried out.

Qualification can be more complicated where:

• the organisation is close to an employee or financial threshold;
• companies have joined or left a corporate group;
• acquisitions, disposals or insolvency proceedings have occurred;
• an overseas parent has several UK establishments;
• accounts cover an unusual period; or
• the organisation qualified in an earlier phase but has since changed size.

Use the latest GOV.UK ESOS guidance and obtain specialist advice where the position is unclear.

What are the main ESOS requirements?

The precise requirements depend on the organisation and its chosen compliance route. For an organisation using the energy-audit route, the process generally includes the following steps.

1. Calculate total energy consumption

The organisation calculates energy consumed by assets it holds and activities it carries out. This normally includes buildings, industrial processes and transport over a suitable 12-month reference period.

The data, methodology, assumptions and any estimates should be retained in the organisation’s ESOS evidence pack.

2. Identify significant energy consumption

The organisation identifies the assets and activities that collectively account for at least 95% of total energy consumption.

This significant energy consumption must be covered by an ESOS-compliant energy audit or another applicable route to compliance. The remaining consumption can fall within the permitted de minimis amount.

3. Calculate energy-intensity ratios

Energy-intensity ratios relate consumption to a suitable organisational activity, for example energy use per unit of production, floor area, employee or distance travelled.

These ratios support comparison over time and help the organisation understand whether energy performance is improving.

4. Complete the required energy audits

Energy audits examine patterns of consumption and identify practical energy-saving opportunities. They should be based on appropriate, proportionate and sufficiently representative data.

Audit recommendations should consider likely energy and cost savings, implementation costs and payback periods. ESOS identifies opportunities; it does not generally require every recommended measure to be implemented.

5. Prepare the ESOS report and evidence pack

The ESOS report records the assessment’s principal findings and required information. The evidence pack contains the underlying data, calculations, audit records, decisions and approvals needed to demonstrate how the organisation complied.

Evidence should be complete, consistent and retained in case the regulator requests it.

6. Obtain the required review and approval

Most participants using the energy-audit route need a registered ESOS Lead Assessor to review the assessment. A responsible officer, normally a board-level director or equivalent, must also review and approve the relevant information.

7. Notify the scheme administrator

The responsible undertaking must submit the required notification through the government’s Manage your ESOS reporting service by the applicable deadline.

What changed for ESOS Phase 4?

The Energy Savings Opportunity Scheme (Amendment) Regulations 2026 came into force on 22 July 2026 and introduced several changes for the compliance period ending in 2027.

Key changes include:

• reporting estimated energy savings achieved since the previous compliance deadline in kWh;
• identifying the measures that produced those savings;
• reviewing measures recorded in the previous ESOS action plan;
• explaining why relevant action-plan measures were not implemented;
• an additional, final annual progress update;
• removal of Display Energy Certificates and Green Deal Assessments as alternative compliance routes;
• updated treatment of ISO 50001-certified energy management systems;
• additional Lead Assessor notification responsibilities; and
• clearer provisions for organisations with zero energy consumption and certain insolvency situations.

The government previously postponed proposals to add broader net-zero requirements to Phase 4 and decided not to change the qualification thresholds to align them with SECR.

Detailed Phase 4 guidance and changes to the online reporting system are expected before the 5 December 2027 compliance deadline. Organisations should monitor official updates rather than relying on older Phase 3 summaries.

ESOS deadlines

Phase 3 notification of compliance

The extended Phase 3 notification-of-compliance deadline was 5 June 2024. A qualifying organisation that has not submitted its notification may be at risk of enforcement action and should address the position promptly.

Phase 3 action plan

The Phase 3 action plan deadline was 5 December 2024. The action plan records the energy-saving measures the organisation intends to implement, when it expects to complete them and the expected savings.

First Phase 3 annual progress update

The first annual progress update was due on 5 December 2025.

Second Phase 3 annual progress update

The second annual progress update is due on 5 December 2026. It must record progress against the action plan, be approved by a board-level director or equivalent and be submitted through the government reporting service.

Phase 4 compliance deadline

The Phase 4 compliance deadline is 5 December 2027.

ESOS action plans and annual progress updates

Phase 3 introduced an ongoing reporting cycle after the main assessment.

An ESOS action plan sets out:

• the energy-saving measures the organisation intends to implement;
• the expected completion dates;
• the estimated energy savings;
• how those savings were estimated; and
• any additional required information.

Annual progress updates report what happened during the following reporting periods. They record implemented measures and estimated energy savings, and explain changes where planned measures were not completed as expected.

For the second Phase 3 annual progress update, the important date is 5 December 2026.

Read about Equas support for the 2026 ESOS progress update

What are the routes to ESOS compliance?

ESOS-compliant energy audits

The standard route is to measure total energy consumption, identify significant energy consumption and complete compliant audits covering the relevant assets and activities. A registered Lead Assessor normally reviews the assessment.

ISO 50001

A certified ISO 50001 energy management system can provide deemed compliance with specified ESOS duties.

For Phase 4, this can apply where the certified system covers either:

• all the participant’s total energy consumption; or
• its significant energy consumption, meaning the areas representing at least 95% of total consumption.

If ISO 50001 covers only part of the organisation’s energy use and does not meet one of those conditions, the certified consumption can still receive appropriate treatment while the remaining consumption is addressed separately.

Learn more about ISO 50001

Zero energy consumption

The 2026 amendment regulations introduced specific deemed-compliance provisions for a participant whose calculated total energy consumption is zero kWh.

Display Energy Certificates and Green Deal Assessments are no longer alternative compliance routes for Phase 4.

What is an ESOS Lead Assessor?

An ESOS Lead Assessor is a competent energy professional who belongs to an approved professional register. For most assessments using the energy-audit route, the Lead Assessor reviews the work and confirms that it meets the relevant ESOS requirements.

The assessor may be an appropriately registered employee or an external specialist. Organisations should involve the assessor early enough to review the proposed scope, data and audit approach before the compliance deadline.

The 2026 amendment regulations also require Lead Assessors to notify their approval body after completion of an assessment and provide specified participant contact information.

For commercial support, visit our ESOS consultants and compliance services page.

What happens if an organisation does not comply?

Environmental regulators can investigate non-compliance and impose civil sanctions, including financial penalties and publication penalties. The outcome depends on the breach and the regulator’s enforcement approach.

An organisation that has missed a deadline should not assume that the obligation has disappeared. It should check the latest official guidance, complete outstanding work and contact the relevant regulator where appropriate.

Preparing for ESOS Phase 4

Organisations do not need to wait until 2027 to begin. Useful preparation includes:

1. checking the likely qualification position and corporate-group boundary;
2. reviewing the Phase 3 assessment, evidence pack, action plan and progress updates;
3. identifying gaps in energy data across buildings, transport and industrial processes;
4. confirming a suitable 12-month reference period;
5. establishing who will coordinate data and approvals internally;
6. deciding whether to use energy audits, ISO 50001 or a combination;
7. planning audits early enough to cover representative operations; and
8. scheduling Lead Assessor and board-level review before the deadline.

Early preparation reduces deadline pressure and creates more time to act on worthwhile energy-saving opportunities.