ESOS, Brexit and EU law
29 June 2017, News release from Utilitywise
As ESOS stems from the EU's Energy Efficiency Directive, some businesses think that the Brexit vote means the scheme will no longer apply to UK businesses. Is that really the case?
The Energy Savings Opportunity Scheme (ESOS) is a mandatory compliance scheme in the UK that came into force in 2014. We’re now in Phase 2 of the scheme. Businesses have until 5 December 2019 to complete compliance but, in the current political climate, many are stalling. One opinion is that Brexit means we won’t have to comply with any EU law once we’ve left the union, which could happen before the Phase 2 deadline.
Isn’t ESOS simply EU law?
ESOS is the UK’s implementation of Article 8 of the EU’s Energy Efficiency Directive. With an aim to reduce EU energy consumption by 20% by 2020, it introduces regular energy audits that will highlight energy savings for large organisations.
Large organisations are classified as those with:
- More than 250 employees or
- A turnover of more than €50,000,000 and
- An annual balance sheet total of more than €43,000,000
Public bodies are not affected. ESOS regulations were transposed to UK law so, unless repealed, the scheme is mandatory for UK businesses.
Won’t Brexit mean we no longer have to comply with EU law?
Certainly until we leave the EU we must still comply with ESOS. The earliest Brexit could happen would be April 2019; by then, with at least 7,000 businesses needing to comply and with less than 8 months until the deadline, many would be far down the line with compliance.
“With the Phase 2 deadline being so close to the very earliest date we could leave the EU, it is inconceivable that ESOS would be scrapped ahead of the next compliance date.” – Sam Davidson, head of consulting operations, Utilitywise plc.
Aren’t we working towards removing EU laws with the Great Repeal Bill?
This Bill will “repeal the European Communities Act and convert EU law (as it applies in the UK) into domestic law on the day we leave. This means that, as far as possible, the same laws and rules will apply immediately before and immediately after our departure, ensuring a stable and smooth transition,” therefore even when we leave the EU, the same laws will continue in the UK.
Environmental concerns are of the utmost importance and, in fact, the Great Repeal Bill will keep all EU Environmental law. This means ESOS will continue to be part of UK law.
The Bill states:
“The Government is committed to ensuring that we become the first generation to leave the environment in a better state than we found it … The Great Repeal Bill will ensure that the whole body of existing EU environmental law continues to have effect in UK law”.
As a UK business you must comply with ESOS.
It’s not just a tick-box exercise
ESOS isn’t a burden – it’s a fantastic opportunity to improve the energy efficiency of your business, and lower your costs and carbon footprint. As the scheme occurs in four-yearly phases it’s a great way to ensure continuous improvement.
Seize the opportunity in ESOS today