The Environment Agency has confirmed that ESOS phase 5 will take place in 2027 to 2031. This will include mandatory Net Zero Requirements
This to provide businesses with additional time to prepare for the substantial changes that Net Zero reporting will entail.
Now that Phase 4 changes are formalised, we will be pleased to provide costed proposals for our customers to commence these works with audits from early 2026. Contact us early to make the most of early adopter discounts.
ESOS Phase 4 (2023-2027) will remain focused on energy consumption, and not carbon emissions). However, with recent changes in leadership and legislative delays, these requirements will now come into force in Phase 5. This will allow the Department for Energy Security and Net Zero (DESNZ) to better understand the impacts of Phase 3 updates to the regulations before implementing further changes.
Unlike the EU27 (link to EU page) that has changed its company qualification from staff numbers, turnover and balance sheet, to 10TJ (2,400,000kWh of energy consumed). These UK Thresholds will remain unchanged for ESOS Phase 4.
The proposed alignment of ESOS qualification thresholds with Streamlined Energy and Carbon Reporting (SECR) legislation will also not be introduced in Phase 4. Adjustments to these thresholds will be considered as part of a wider review of business energy and emissions reporting.
The qualification criteria for ESOS Phase 4 remains unchanged, with a qualification date of 31st December 2026.
Despite the postponement of Net Zero requirements, certain updates to ESOS Phase 4 will proceed, subject to parliamentary approval:
· Removal of Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) as a means of ESOS compliance.
· Progress tracking on Action Plan commitments to be included in ESOS assessments.
· Mandatory explanations for to be made for unmet action plan commitments.
The required legislative updates and corresponding guidance are expected to be in place by early 2027, ahead of the Phase 4 compliance deadline on 5 December 2027.
Voluntary Net Zero Reporting Option in Phase 4
Recognising that many of our costomers are already working towards Net Zero, DESNZ is encouraging a voluntary option for Net Zero reporting in ESOS Phase 4. This initiative aligns with the newly developed PAS standard, published on 7th February 2025:
· PAS 51215-1:2025 – A process for conducting combined energy and decarbonisation assessments, resulting in an implementation plan for achieving Net Zero.
Organisations choosing to voluntarily adopt PAS 51215-1:2025 can:
· Include GHG emissions related to the energy covered by ESOS.
· Assess governance structures and risks related to achieving Net Zero.
· Develop an implementation plan to reach Net Zero by 2050.
DESNZ will provide accompanying guidance to help ensure compliance with ESOS audit requirements. The MESOS digital system will also be updated to allow organisations to disclose voluntary adherence to PAS 51215-1:2025 as part of their Net Zero commitments. CLS Energy will be pleased to assist with this as part of the ESOS process.
