Following new legislation, the Energy Savings Opportunity Scheme (ESOS) has been amended and the scheme administrator has published new guidance for businesses in scope of Phase 4. The main changes are fuller reporting requirements and the removal of two compliance routes that are no longer considered good enough.
The Energy Savings Opportunity Scheme (Amendment) Regulations 2026 came into force on 22 July 2026. The new regulations build on previous work by the Department for Energy Security and Net Zero (DESNZ) to strengthen the scheme. Updated guidance was published on 30 July.
Third progress update introduced
Legislation for Phase 3 had introduced the obligation for organisations in scope of ESOS to create an Action Plan, setting out what they will do to reduce energy consumption and the timescales involved. It also introduced the obligation to submit two progress updates after Phase 3 ended, with the second due in December 2026.
We are currently in Phase 4, which runs from 6 December 2023 to 5 December 2027. The updated legislation brings in a requirement for participants to submit a third progress update against their Phase 4 Action Plan. This will be due in the final year of Phase 5, which ends on 5 December 2031. DESNZ says this new requirement “addresses the current data gap in the fourth year of the compliance period and increases participants’ accountability”.
Reporting required on actions not done
Businesses and other large organisations in scope of ESOS Phase 4 are now obliged to report on any actions set out in their Phase 3 Action Plan but not carried out. They also need to give reasons for not doing what they planned. These details will not be made public because of commercial sensitivity, but the information will be useful to DESNZ when developing future policy.
More detail on energy savings
ESOS participants already needed to submit an estimate of the total energy savings achieved during each compliance period. The new regulations require participants to break this total down by listing all the measures implemented and estimating the energy savings achieved by each one (in kWh). They also need to allocate each measure to a category, such as “energy management practices” or “behaviour change interventions”. Again, this information will help DESNZ support businesses to save energy.
Two routes to compliance removed
The updated legislation removes two routes to ESOS compliance. In Phase 3, Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) were “discouraged” but still permitted. In Phase 4, they are no longer valid. Participants now need to choose between an energy audit signed off by an ESOS lead assessor or gaining ISO 50001 certification.
Less paperwork for the ISO 50001 route
The changes bring some good news for organisations choosing the ISO 50001 route for ESOS compliance: in Phase 4, they do not have to appoint a lead assessor or complete an ESOS report. This applies even if the ISO certification only covers their “significant energy consumption” (95% or more of total consumption) rather than 100% of energy use.
The July 2026 legislation makes a few other minor changes to the ESOS regulations. These include a requirement for lead assessors to notify their professional body of each assessment they do, to enable quality checks.
Phase 4 changes at a glance
Phase 3 | Phase 4 |
Phase 3 Action Plan to be followed by two progress updates (falling during the Phase 4 compliance period) | Phase 4 Action Plan to be followed by three progress updates (falling during the Phase 5 compliance period) |
Phase 3 ESOS report required an overall total of estimated savings arising from Phase 2 recommendations | Rather than a total, Phase 4 ESOS reporting needs estimated savings for each separate measure in the Phase 3 recommendations and Action Plan |
Four possible routes to compliance | Two routes to compliance: an energy audit or ISO 50001 certification |
Advice and support
For advice on ESOS Phase 4 changes and ensuring compliance, get in touch with Sustainable Energy First via the form below and we’ll put you in touch with one of our approved ESOS Lead Assessors.
For more advice on ESOS compliance, get in touch with Sustainable Energy First’s ESOS Lead Assessors.