Clarification of ESOS compliance deadline

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The Energy Savings Opportunity Scheme (“ESOS”) came into force in the UK last year.  UK “large undertakings” and their UK groups that qualified for ESOS participation on 31 December 2014 must have complied, and notified the EA that they are ESOS compliant, by 5 December 2015.

Recognising that many ESOS participants are struggling to meet the notification deadline, the EA indicated last week that, whilst it cannot extend an EU-imposed deadline, it will not normally expect to take enforcement action for late notification - provided the notification is received by 29 January 2016.

Where a qualifying organisation is not going to be able to make a notification of compliance by 5 December 2015, the Environment Agency expects to be informed of this before this date has passed.

Background:

  • ESOS has been introduced in the UK because Article 8 of the EU Energy Efficiency Directive requires Member States to impose mandatory energy auditing obligations on large enterprises.

Essentially:

  • “Large undertakings” in the UK on 31 December 2014, and their UK groups on that date, have to participate in ESOS.  In essence, a “large undertaking” is a company or other body present in the UK that has (i) 250 or more employees; or (ii) a turnover of more than €50m and a balance sheet exceeding €43m.
  • The basic obligation on participants under ESOS is (with limited exceptions for operations covered by the ISO 50001 energy management standard) to conduct an ESOS assessment of energy consumption and appoint a lead assessor to check that the assessment meets ESOS requirements.
  • Civil sanctions including financial penalties can be issued by the Environment Agency if the scheme’s obligations are not met.

Remember:

  • UK “large undertakings” and their UK groups that qualified for ESOS participation on 31 December 2014 remain within ESOS regardless of any changes to size or structure during the intervening period and must comply.
  • Any undertaking from a group that qualified on 31 December 2014 but has subsequently been transferred elsewhere must still comply with ESOS. Such an undertaking can comply: with its previous group; with its new group (noting that if the new group did not qualify for ESOS then only the energy supplies of the undertaking that has been purchased will be subject to ESOS); or on its own (in the absence of a written agreement with the previous or new group).
  • It follows that if, in 2015, your organisation has purchased an undertaking from a group that qualified for ESOS on 31 December 2014, you may have ESOS responsibilities in respect of that undertaking – even if your group did not qualify for ESOS on 31 December 2014.

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