ESOS Phase 3 and 4: Where we are now

This page was reviewed and updated on 06/06/25.

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

Your ESOS obligations depend on the size category of your business as of 31 December 2022. This was the “qualification date” for Phase 3. If your organisation met the description of a “large undertaking” on that date, you now have an obligation to comply with ESOS Phase 3 even if the business has subsequently changed in size.

For the purposes of ESOS Phase 3, a large undertaking is 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.

If your company fitted this definition on the qualification date, it must carry out ESOS reporting, even if it has subsequently changed in size and no longer meets the criteria.

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. 

Progress reports

You are now expected to begin implementing 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 must be made public.

Late to comply with Phase 3? Take action now

ESOS administrator, the Environment Agency, does not have a systematic way of notifying businesses that they are in scope, relying instead on companies becoming aware of the scheme through sources such as the Energy Advice Hub and by doing their own checks. As a result, some businesses may not be aware that they were in scope of ESOS Phase 3. These businesses still need to comply with the requirements of ESOS. Chiefly, this includes submitting a notification of compliance by 6 August 2024, an Action Plan by 5 March 2025and two annual progress updates (5 December 2025 and 5 December 2026).

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. Our ESOS Phase 4 blog post gives an idea of what to expect, although requirements are changing and there will be more updates to come.

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.

Summary of key dates:

• ESOS Phase 3 – notification of compliance: 6 August 2024
• Submission of Action Plan: 5^th March 2025
• Submission of 1st Progress Update: 5^th December 2025
• Submission of 2^nd Progress Update: 5^th December 2026
• ESOS Phase 4 – notification of compliance: 5^th December 2027

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.