Net Zero and the upgraded Energy Savings Opportunity Scheme (ESOS) - a Native-Hue energy management briefing

ESOS NOW INCLUDES NET ZERO PLANS AND ENERGY SAVINGS ACHIEVED

The UK mandatory ESOS scheme is being substantially upgraded in its Phase 3 (2020-2023) and Phase 4 (2024-2027) to include Net Zero and progress reporting.

ESOS has to date required all large organisations and companies (there are 10,000 of them) to

  • set down their annual energy use and emissions
  • carry out an audit of energy saving opportunities 
  • consider the findings at Board level.

The upgrades require reporting of

  • the organisation’s plans for implementing the identified opportunities to save energy
  • energy savings achieved and changes in energy use in previous phases
  • Net Zero plans – mandatory in Phase 4.

The upgrades apply by the 5th June 2024 Phase 3 compliance deadline (delayed from 5th December 2023) or in Phase 4 as shown in the timetable chart.

The definition of “large” is similar to that in UK company law.  Qualifying organisations are any UK large undertaking that either:

  • employs 250 or more people, or
  • has an annual turnover in excess of £44 million and an annual balance sheet total in excess of £38 million 

Net zero pathway stages (from ISO 14068-1)

Greenhouse Gas Scopes 1, 2 and 3

ESOS upgrade timeline

NET ZERO REPORTING & AUDITING STANDARDS

ISO 14068 (2023) “Climate change management – Transition to net zero”  Part 1 provides an international standard for organisations to report a Carbon Neutral status which can include offsetting in the short term. It requires reporting on

  • the current measured carbon footprint
  • plans for reduction of emissions with actions, target reductions and timescales
  • any measures to offset emissions which must be justified, time-limited and restricted to approved schemes
  • documentation of the plan and its verification

PAS 51215 – mandated for ESOS Phase 4 will provide an auditing standard for energy and emissions with regard to Net Zero pathways. It sets down requirements for conducting an energy and Net Zero audit and for reporting the findings, including requirements to

  • compare current energy use and emissions with a Net Zero state in year 2050
  • report on the planning of objectives to meet that state with science based targets
  • have interim reporting for progress assessment
  • have a 12 month base year to measure improvements against
  • include all controlled emissions classified as Scope 1 (direct emissions like gas combustion), Scope 2 (indirect emissions like purchased electricity, heating or cooling) and some Scope 3 (supply chain emissions like employee mileage-charged travel)

The information in this Native-Hue energy management briefing should be verified before use for compliance purposes.