ESOS deadline day: will another late compliance surge save the day?

An edie Freedom of Information (FOI) request revealed that just 4,242 – around 42% – of the circa 10,000 eligible companies were fully compliant with the scheme as of 8 January.

edie has attempted to contact the Environment Agency for updated figures this week, but was told that the agency is focusing on “potentially significant flooding this week/weekend due to the storms arriving in the UK”.

A spokesperson for the agency said it plans to give out a brief update about ESOS compliance on Monday.

With a clear need for a late surge in compliance rates, there is some reason for optimism: our FOI request also revealed that an additional 2,500 companies had informed the EA that they intended to comply with the legislation by 29 January.

And in the week leading up to the original 5 December ESOS deadline, almost 3,000 businesses complied or confirmed their intention to comply, suggesting there could be another late flurry of compliance this time around.

Fines

The Environment Agency’s ESOS project manager Jo Scully has previously confirmed to edie that any organisation covered by the scheme that submits a notification of compliance after 29 January risks “enforcement action”.

When asked for information on exactly what this enforcement action would be, Scully responded: “Each non-compliance will be considered on a case-by-case basis, in accordance with our published enforcement approach.”

The Agency’s official document on enforcement and sanctions details that the maximum penalty for failing to undertake an energy audit ahead of the compliance deadline is up to £50,000 plus up to £500 for each working day the company remains in breach of the scheme, for a maximum of 80 working days.

But the document also states that civil penalties will normally be used only in the most serious cases and that, for the first compliance period and new entrants in subsequent compliance periods, the Agency would normally allow up to three months to remedy the failure before issuing any fines, meaning that the ‘ultimate’ deadline would be 29 April.

Business benefits

In response to previous figures showing low compliance rates, Pat Gilroy from Veolia UK, which is helping companies carry out ESOS audits, said: “The fines are very big, but the intent of the scheme should benefit all. Even with the push to inform businesses it seems almost impossible that thousands of businesses will have their audits in on time.

“Part of the problem is that there is a colossal shortfall in the number of qualified auditors – an issue that is likely to get worse as the deadline approaches.

“Not only are these companies risking fines, they are also missing out on the chance to reduce overheads by cutting their energy bills. I urge companies to pay attention to this warning and arrange their audits today to help save precious resources and improve carbon performance.”

ESOS requires all ‘large undertakings’ with more than 250 employees or a turnover of more than €50m to produce detailed reports on their energy use and efficiency every four years. Lead assessors will carry out an energy audit, paid for by the business, but there is no obligation to implement any of the efficiency measures identified. Read our full explanation of the scheme here. 

The 10,000+ businesses affected by ESOS are facing total assessment costs estimated at £165m, but the resulting financial benefits of implementing energy efficiency improvements could massively outweigh the costs of administrating the scheme. 

edie webinar: The ‘Opportunity’ in ESOS

One month on from this compliance deadline for ESOS, edie will be hosting a webinar that explores what happens next, with expert advice on how the Scheme could be the key to secure crucial board-level buy-in for UK energy managers.

Taking place on Thursday, 25 February, the webinar will investigate the ‘Opportunity’ in ESOS; providing an insight into how energy managers found the whole compliance process, and how they are planning to use the scheme as an effective tool to drive energy efficiency changes within their organisation.

To find out more about this webinar and register your interest to tune in, webinars@fav-house.com.

Brad Allen