ESOS Phase 3 and 4: Where we are now

• This page was reviewed and updated on 19/08/25.

The Energy Savings Opportunity Scheme is a mandatory scheme requiring large UK businesses to report on their energy use and identify possible ways to save energy. It runs in four-year phases. 

• If you were in scope of Phase 3, you should have submitted your Action Plan by 5 March 2025, and be getting ready to submit your first Progress Update by 5 December 2025. 
• Phase 4 officially started on 6 December 2023. If you are in scope, you must submit a compliance notification by 5 December 2027.

Check if your business has to comply with ESOS

ESOS applies to “large undertakings.” In Phase 3 & 4, this is defined as any UK company that:

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

The qualification date for Phase 4 will be 31 December 2026. If your business meets the above criteria on this date – even if you aren’t eligible at the moment – you will be subject to ESOS and must submit a compliance notification by 5 December 2027.

If you previously had to comply with ESOS but now don’t

If your organisation qualified for previous phases of ESOS but doesn’t now meet the criteria on the new phase qualification date, you are advised to submit a DNQ (Do Not Qualify) notification to the Environment Agency. This should be done through the same online portal that you would use for your compliance notification (MESOS). 

Submitting your ESOS Phase 3 Action Plan

Phase 3 of ESOS introduced a new requirement for organisations to produce an Action Plan. The plan should include:

• What you intend to do to reduce your organisation’s energy consumption over the next four years;
• When you intend to do it;
• Whether it was recommended through your ESOS assessment;
• What energy savings you expect to see by carrying out your action plan; and
• How you estimated those energy savings.

This was due by 5 March 2025. 

Action Plan progress reports

You are now expected to implement your Action Plan and documenting your progress. ESOS Phase 3 compliance requires two annual progress reports in the two years following the Action Plan deadline. This means a report by 5 December 2025 and another by 5 December 2026. Your plan and progress updates will be made public.

Late to comply with Phase 3? Take action now

The deadline for notification of Phase 3 compliance was 6 August 2024, and the Action Plan submission deadline was 5 March 2025. In July 2025 the Environment Agency said over 80% of organisations are now compliant with Phase 3, with more being brought into compliance.

If you have missed deadlines that have passed, you may be at risk of enforcement action and should contact the Environment Agency.

What’s happening with ESOS Phase 4?

Although we are currently in Phase 4 of ESOS, we have not yet reached the qualification date of 31 December 2026. 

However, if you suspect you will meet the Phase 4 eligibility criteria by the qualification date, you can begin preparing now to make compliance smoother and more straightforward when the time comes.

This means ensuring your energy consumption is measured and you have ready access to this data, including transport fuel as well as the energy used for industrial processes, heating and lighting buildings, and so on.

You should also start considering ways your organisation can become more energy efficient, particularly as Phase 4 will require evidence of audit actions and progress. In Phase 4, Display Energy Certificates and Green Deal Assessments will no longer be valid routes to compliance, so your organisation may need to rethink its approach.

What changes will we see in ESOS Phase 4?

In February 2025, the Environment Agency issued an update on changes to ESOS Phase 4:

1. Mandatory net zero requirements will be delayed to Phase 5: The government had previously announced its intention to align ESOS Phase 4 audits with net zero. These will now be postponed until Phase 5 (2027-2031).
2. There will be a voluntary net zero reporting option in Phase 4. DESNZ has worked with the British Standards Institution (BSI) to finalise PAS standards, which can be used on a voluntary basis for ESOS compliance in Phase 4:

• • PAS 51215-1:2025 Energy and decarbonization assessment – Part 1: Process – Specification. This standard describes the process for carrying out a combined energy and decarbonisation assessment in a single process to produce an implementation plan for achieving net zero across the scope and boundaries of the assessment; and

• • PAS 51215-2:2025 Energy and decarbonisation assessment – Part 2: Competencies of lead assessors and assessment teams – Specification. This standard updates the previous PAS 51215:2014 by strengthening the existing energy competencies that assessors need and incorporating new ones for GHG and net zero.

3. Qualification criteria remain unchanged for Phase 4. Proposed changes to qualification thresholds for ESOS to align with Streamlined Energy and Carbon Reporting (SECR) requirements will also not be taken forward in Phase 4.

4. Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) will be removed as compliance routes.

5. Progress against action plan commitments must be included in the ESOS assessment.

ESOS Phase 4 deadline

The Phase 4 deadline remains the same: 5^th December 2027. We can expect to see full Phase 4 government guidance in early 2027.

Summary of key dates:

The Energy Advice Hub updates its ESOS FAQs regularly and reports any changes to the scheme as they happen, so keep an eye on the site to stay informed.