Late surge sees ESOS compliance hit 65%

A flurry of late submissions saw ESOS compliance rates rise to around two thirds of affected businesses, according to figures released Monday night by the Environment Agency.

ESOS project manager Jo Scully said in a note that 4,000 out of the 10,000 eligible businesses had complied with the 5 December deadline and another 2,500 had notified the EA of their intention to comply by the 29 January.

If they comply by this date, the EA says companies will not be fined.

The compliance rate is a significant increase from one week before the deadline, when EA figures showed that just 1,682 businesses had confirmed their compliance and 543 said they intended to comply by 29 January.

Scully said she was pleased with the compliance rate and had received “some good feedback on the benefits that compliance can bring”.

The ESOS legislation affects firms with more than 250 employees or a turnover of more than €50m and a balance sheet exceeding €43m.

Scully added: “Of course we’d have liked all organisations to be compliant by 5 December but we believe that the vast majority of organisations are both aware of their responsibilities and intend to comply. Our focus remains on bringing organisations into compliance with ESOS to ensure that the scheme delivers the energy savings and financial and environmental benefits intended.”

Scully said the EA will now write to the organisations they have not heard from to remind them of the scheme and warn of the potential risks of non-compliance – a basic fine of £50,000, plus £800 a day capped at a maximum of 80 days.

Industry concern

However despite the increase in compliance rates, energy experts were reluctant to praise the scheme.

Martin Baxter, the chief policy advisor at the Institute of Environmental Management & Assessment (IEMA) told edie: “It is too early to judge the success of ESOS as the key factor will be whether organisations have implemented the energy efficiency measures identified in their ESOS audits, which will take time. 

“It is concerning that a significant proportion of organisations were not compliant at the deadline date; it will be important to bring these into compliance as soon as possible in order that they can achieve the business and environmental benefits of energy efficiency.”

The Government has calculated that if businesses covered by ESOS reduce their energy use by 0.7%, they will save around £250m each year.

Switch target?

Karthik Suresh, a director at energy efficiency concultancy Ameresco, also said the scheme needed to be tweaked.

He said: “While the new figures are heartening, the aim of ESOS is to reduce carbon emissions and the real acid test will come when we find out how many organisations will implement the changes that have been outlined in their ESOS audit.”

“In the UK you only need to do an ESOS audit, the large firm doesn’t have to enforce it or follow the measures and if you don’t own a building or other asset which needs improving you cannot gain from its rise in value.

“As the ESOS audits need to take place every four years, in future years there could be an opportunity to tweak ESOS to directly target asset owners. A carrot and stick approach could encourage businesses that not only want to avoid fines but also want to increase the value of their assets.”

Suresh pointed to a New York City regulation, Local Law 84, which requires owners of private sector buildings which are larger than 50,000 square feet, to submit a benchmarking report in order to reduce their carbon emissions.

While the fines involved are very small, only $500 for non-compliance, the law has contributed to an overall 19% reduction in energy emissions in New York City since 2005.

Brad Allen

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