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ESOS compliance: a tougher approach from the Environment Agency

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Summary: The EA has now changed its stance on Energy Savings Opportunity Scheme (“ESOS”) compliance away from encouragement and towards enforcement.

In the last month, the Environment Agency has indicated that around 90% of companies that have to comply with ESOS have now done so and notified the Environment Agency accordingly.

For those yet to comply (thought to number over 600 in total), in view of the compliance deadlines (and deadline extensions) now having long since passed, the EA is turning its mind to issuing enforcement notices (of which 75 have apparently already been issued) and civil penalties. 

Background

ESOS was introduced in the UK in 2014 because Article 8 of the EU Energy Efficiency Directive requires Member States to impose mandatory energy auditing obligations on large enterprises.

With limited exceptions for operations covered by the ISO 50001 energy management standard (in relation to which different compliance requirements apply), ESOS requires participants to conduct an assessment of energy consumption and appoint a lead assessor to check that the assessment meets the ESOS requirements.  Participants had to notify the EA that they had complied with the ESOS requirements by 5 December 2015. 

When many participants struggled to meet the initial notification deadline, the Environment Agency stated it would not take enforcement action for late notification - provided that it was kept informed and that notification was received by 29 January 2016.  Operations covered by the ISO 50001 were given until 30 June 2016.

UK "large undertakings" (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) and their UK groups that qualified for ESOS participation on 31 December 2014 have to comply with ESOS.

Civil sanctions including financial penalties (of up to £50,000 plus £500 for every extra day of non compliance) can be issued by the Environment Agency if the ESOS obligations are not met.

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