Important updates on ESOS Phases 4 and 5

Important updates on ESOS Phases 4 and 5

The Environment Agency published its latest ESOS newsletter on 4^th February, and there are a few important changes to ESOS Phases 4 and 5:

Net zero requirements:

Mandatory net zero considerations were originally planned for ESOS Phase 4 (2023–2027), but are now postponed to Phase 5 (2027–2031).

The decision is in part due to delays in the introduction of Phase 3 legislation and guidance, which has shortened the ESOS Phase 4 compliance window. The new government wants to give firms more time to adjust to the changes, as well as allowing DESNZ time to understand the impact of Phase 3 modifications.

Qualification thresholds:

Proposed changes to ESOS qualification thresholds to align with SECR requirements will now not proceed in Phase 4.

The Phase 4 qualification criteria and the qualification date (31 December 2026) will therefore remain unchanged.

Smaller Phase 4 changes:

• Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) will be removed as compliance routes.
• Progress against Action Plan commitments must be included in the ESOS assessment.
• Organisations will be requirement to provide explanations if Action Plan commitments have not been met.

Voluntary net zero reporting option in Phase 4:

While net zero reporting is no longer mandatory for Phase 4, you may wish to consider adopting this approach voluntarily, in preparation for Phase 5. DESNZ, in collaboration with the British Standards Institution (BSI), published two new PAS standards on 7 February:

• PAS 51215-1:2025: Specifies the process for a combined energy and decarbonisation assessment to develop an implementation plan for achieving net zero.
• PAS 51215-2:2025: Outlines the required competencies for lead assessors and assessment teams, updating the previous standard.

These standards allow participants to voluntarily demonstrate their commitment to net zero by:

– Including GHG emissions related to energy covered by ESOS.
– Assessing governance and risks related to achieving net zero.
– Proposing an implementation plan to achieve net zero by 2050.

Advice and support

Concept is already helping companies lay the groundwork for Phase 4, and we are also working on Phase 3 Action Plans, which are due on 5^th March 2025 (download our Guide to ESOS Action Plans, for support). For no obligation advice, get in touch with the team.

14th February 2025