1. How do we know if we qualify for ESOS?
ESOS applies to all large private and third sector firms across the UK. This means that an organisation qualifies for ESOS if:
- Your company has 250+ employees, and/or
- Your company turnover is over £42.5m, and/or
- Your company balance sheet is over £36.5m
In addition, if a corporate group contains at least one large UK organisation, all UK organisations of that group must comply with ESOS, regardless of their size. Bear in mind that ESOS applies only to organisations that operate in the UK and some large enterprises may be exempt from ESOS; these are defined in the Public Contracts Regulations 2006
2. Does ESOS affect only large enterprises/organisations?
There may be certain cases where SMEs will also need to comply with ESOS. If you would like to understand whether your business needs to comply, contact us today.
ESOS should truly be viewed as an opportunity to save money through energy efficiency; there are a number of SMEs that are considering non-mandatory compliance.
3. What if we belong to a corporate group?
In the case of a corporate group that contains at least one ESOS-qualifying large organisation operating in the UK, all UK organisations of that group will also fall under ESOS, irrespective of their size.
A corporate group may choose to undertake a single audit for the group, or require its constituent companies to comply individually.
4. We are a global organisation. Does ESOS apply only to our UK operations? What about our other European operations?
Yes, since ESOS is the UK’s Government response to implementing Article 8 of the EU Energy Efficiency Directive, it applies only to UK operations of global organisations.
All EU member states must respond to Article 8 and have similar response which will require compliance. Many of these responses are still awaiting approval and publication. Legislation for each member state should be checked in those cases that a company has other European operations.
The UK registered establishments of overseas organisations will also qualify for ESOS provided that they have at least 250 UK employees who pay income tax in the UK. In addition, a UK registered establishment of an overseas organisation will fall within ESOS, irrespective of its size, if any other UK part of the overseas organisation meets the scheme’s qualifying criteria. A ‘UK establishment’ is defined as a branch under the Eleventh Company Law Directive (89/666/EC) or a part of business that is not considered to be a branch but it has some extent of physical presence in the UK.
5. Does the public sector fall within the scheme? What about universities?
Most public sector organisations do not fall within the scheme. Under ESOS, public sector organisations are defined as those organisations that are subject to the Public Contracts Regulations 2006 in England, Northern Ireland and Wales, and the Public Contracts Regulations 2012 in Scotland.
Some universities are within scope of ESOS as are companies with a proportion of public funding. We can help you understand if your public sector organisation needs to comply.
6. What types of energy use does ESOS cover?
ESOS covers energy used in buildings, transport and industrial processes. Within these areas of energy consumption, all forms of energy should be measured, including electricity, combustible fuels, heat, and so on.
7. Is an energy audit the only way to comply with the scheme?
No, an energy audit is not the only way to comply with the scheme. There are a number of alternative routes to compliance such as:
- Implementing and operating an externally-certified ISO 50001 energy management system
- Obtaining Display Energy Certificates (DECs), and
- Carrying out Green Deal Assessments.
8. If we comply with the scheme, will have to do it again in the future?
Yes, ESOS will run in repeating 4-year phases. During each phase, organisations will have to assess if they qualify for the scheme, and if they do so, they will have to comply with the requirements of ESOS.
9. What happens if we don’t comply?
Under ESOS, compliance bodies will be authorised to apply civil penalties including fines against non-compliant organisations. They will also have the right to publish information on non-compliance including the name of the organisation, details of non-compliance and the penalty amount. The compliance bodies for each UK country are as follows: the Environment Agency in England, the Northern Ireland Environment Agency, the Natural Resources Wales and the Scottish Protection Environment Agency.
10. What is the ESOS compliance deadline?
ESOS participants must submit their formal notifications to the Environment Agency by the end of each compliance phase. The deadline for the first phase is 29th January 2016.