Energy Savings Opportunity Scheme (ESOS)

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Is your business compliant with UK energy schemes ESOS and SECR?

Apr. 30 2019

The European Union (EU) and the United Kingdom (UK) are committed to the battle against climate change and have been actively taking measures to keep the world’s temperature in safe levels. 

On the energy efficiency side, in 2012 the Energy Efficiency Directive (EED)  – European Union directive which mandates energy efficiency improvements within the European Union – put in place a set of binding measures to help the EU to reach an energy efficiency target of 20% by 2020 and of 30% by 2030. On the Greenhouse (GHG) emissions side, the EU has committed to cut its GHG emissions by at least 40% below 1990 levels by 2030.

On account of the targets to be achieved, in the last decade companies that operate in the region have seen a growing amount of regulations that have been set to incentivise energy efficiency and a low-carbon economy.

The year of 2019 marks important milestones for two UK energy and carbon mandatory schemes: the end of the second compliance period for Energy Savings Opportunity Scheme (ESOS) and the creation of the Streamlined Energy & Carbon Reporting (SECR). To understand if your company is eligible for regulations and how to achieve compliance, please see the lines below.

Energy Savings Opportunity Scheme (ESOS)

The Energy Savings Opportunity Scheme (ESOS) Regulations came into force in July 2014 as part of the European Union Energy Efficiency Directive (mentioned above), which established a common framework of measures to help meet Union’s 2020 targets:

  • Reduce greenhouse gas levels by 20% 
  • Increase share of renewables in the energy mix to 20% 
  • Reduce energy consumption by 20%

Article 8 of this Directive 2012/27/EU, transposed as Energy Savings Opportunity Scheme (ESOS) in the UK, requires all large companies to perform an audit of their energy consumption and submit a report to the Scheme Administrator before 5 December 2015, and then every four years subsequently – therefore, the next compliance deadline is 5 December 2019.

In regards to eligibility, the ESOS Regulations apply to all large UK organisations outside the public sector which meet the following criteria:

  • A minimum of 250 employees
  • Annual turnover of in excess of more than €50 million
  • Annual balance sheet total in excess of €43 million

Organisations that fit the criteria for ESOS regulations should start planning their energy audits now to make sure they get maximum value from going through the ESOS compliance process and identify cost-effective energy efficiency opportunities for their business.

Streamlined Energy & Carbon Reporting (SECR)

The Streamlined Energy & Carbon Reporting (SECR) is a UK mandatory reporting regime that, since April 2019, has replaced the Carbon Reduction Commitment (CRC) and GHG reports. 

Created to simplify the energy and carbon reporting, the SECR is part of the government’s Clean Growth Strategy to improve business and industry energy productivity by at least 20% by 2030.

The framework applies to companies that fall in the following categories:

  • Quoted companies: those whose equity share capital is listed on London Stock Exchange; European Economic Area State; or either on the New York Stock Exchange (NYSE) or NASDAQ;
  • Large unquoted companies, Limited Liability Partnerships (LLP), and unregistered companies: organisations defined as ‘large’ under the Companies Act of 2016, which means companies with:
    • More than 250 employees;
    • More than £36 million in annual turnover; and
    • An annual balance sheet larger than £18 million

Eligible companies will need to report its energy consumption and GHG emissions (including a description of the energy efficiency actions taken by the organisation), in line with the SECR framework, in its Directors’ Report or equivalent section contained within their annual report for financial years beginning on or after 1 April 2019 – the timeline will follow the company’s financial year.

Complying with both Energy Schemes

It is important to note that the SECR operates in parallel with ESOS and the reporting requirements for both schemes are different. 

Bureau Veritas Energy Services Support

With vast experience and technical expertise in the area of energy assessment and verification services, Bureau Veritas is uniquely placed to help organisations achieve compliance with the UK and EU energy schemes, and can support organisations through every step of the process, including:

  • Guidance and support around accurate energy data collection;
  • Advice on corporate strategies to manage and reduce energy consumption;
  • Advice on systems and processes used to obtain the required information to ensure this is collected and reported correctly and efficiently; and
  • Support in achieving certification to ISO 50001 (Energy Management).

Want to know more about our Sustainability Services?

If you want to speak to one of our experts to know more about our services and to have updates on the energy schemes to understand its implications on your organisation’s strategy, please email us at sustainability@uk.bureauveritas.com or call 0345 600 1828.