ESOS Phase 4 (Energy Savings Opportunity Scheme)

What is ESOS Phase 4?

ESOS Phase 4 is the fourth four-year round of the Energy Savings Opportunity Scheme, the UK's mandatory energy assessment scheme for large organisations. If your organisation is large on 31 December 2026, you must assess your energy use, identify cost-effective savings and notify compliance by 5 December 2027.

ESOS does not force you to install anything. It does require you to:

• measure all energy your UK group uses in buildings, industrial processes and transport
• audit the areas where most of that energy goes, or rely on ISO 50001 certification
• get a director to sign off the results and submit a notification of compliance
• publish an action plan and report progress against it every year

The scheme runs under the Energy Savings Opportunity Scheme Regulations 2014, most recently amended by the ESOS (Amendment) Regulations 2026, in force since 22 July 2026. The Environment Agency is the scheme administrator for the whole UK and publishes the Phase 4 compliance guidance.

Many ESOS participants also report energy and carbon under SECR, so build one energy data set that serves both. Being in a climate change agreement or the UK ETS does not exempt you, and ISO 14001 is not an ESOS route; only ISO 50001 is.

Who qualifies for ESOS Phase 4?

You qualify if, on 31 December 2026, your organisation is a "large undertaking" or is part of a corporate group that contains one. Only UK undertakings are tested.

How the size test works

• Test each UK undertaking on its own figures, even if your group publishes consolidated accounts.
• Count employees, owner-managers and partners, full-time or part-time, including staff a UK company employs directly overseas.
• Turnover excludes VAT. The balance sheet total is gross assets, before liabilities.
• Status only changes after two consecutive accounting periods on the other side of the threshold.

Corporate groups

If any UK member of your group is large, the whole UK group must take part, including small subsidiaries. The highest UK parent is normally the "responsible undertaking" that complies for everyone. Other arrangements, such as splitting the group, need written agreement.

Overseas parents and UK branches

An overseas parent does not take part itself, and only UK undertakings are tested. If any UK part of a global group qualifies, every highest UK parent group in that global group must take part; by default each complies separately. A UK branch registered at Companies House must take part, whatever its size, if another part of the group's UK operations qualifies.

Who is excluded

Public bodies are excluded. From Phase 4, the insolvency exemption extends to the rest of an insolvent undertaking's group, unless the group contains another large undertaking that is not insolvent.

Watch out: If you took part in an earlier phase, or a regulator has contacted you, but you do not qualify for Phase 4, you must tell your regulator.

ESOS Phase 3 and Phase 4 key dates

The Phase 4 compliance period runs from 6 December 2023 to 5 December 2027. Phase 3 participants still have one progress update to file before Phase 4 begins in earnest.

Audit data must cover 12 consecutive months starting no earlier than 6 December 2022. An ISO 50001 certificate used for Phase 4 must be issued on or after 6 December 2023 and still be valid on 5 December 2027.

What an ESOS assessment involves

An ESOS assessment follows the same sequence whichever route you use. Leave plenty of time: audits need site visits and a full 12 months of data.

1. Calculate total energy consumption

   Add up all energy your UK group uses in buildings, industrial processes and transport over 12 months that include 31 December 2026, expressed in kWh. No fuel is exempt.

2. Identify significant energy consumption

   You may audit only the areas that make up at least 95% of your total. The remaining 5% or less is de minimis and needs no audit.

3. Calculate energy intensity ratios

   Report at least one ratio each for buildings, transport, industrial processes and other uses, such as kWh per square metre. Turnover is not recommended as the measure.

4. Choose your compliance route

   Use ESOS energy audits, ISO 50001 certification, or a mix. Display Energy Certificates and Green Deal assessments no longer count from Phase 4.

5. Appoint a lead assessor

   You need a lead assessor from an approved register unless total consumption is under 40,000 kWh, is zero, or ISO 50001 covers your total or significant consumption.

6. Audit and write the ESOS report

   Audits must use verifiable data, include site visits and identify cost-effective savings. Phase 4 reports must also review your Phase 3 action plan and estimate the savings achieved.

7. Get director sign-off and notify

   A director must confirm the notification and that they have considered the recommendations; two directors if your lead assessor is an employee. Submit in MESOS by 5 December 2027.

8. Keep an evidence pack

   Keep calculations, estimates and their methods, reports and group agreements. The regulator can ask to see them, and failing to keep records is a separate breach.

ESOS action plans and progress updates

After notifying compliance, you must submit an ESOS action plan in MESOS. It sets out the energy-saving measures you intend to take before the end of the next compliance period, or states that you plan none. For each measure you give:

• what it is and when you expect to carry it out
• the estimated saving in kWh, split by organisational purpose
• how you estimated it, and whether an audit recommended it

If you were in Phase 3

Phase 3 action plans were due by 5 December 2024. Your first progress update was due by 5 December 2025 and the second is due by 5 December 2026. Your Phase 4 assessment must then include an "action plan review": the measures you carried out, the savings from each, and why any planned measures did not happen. Only your combined savings figure is published; the reasons are not.

For Phase 4

Submit your Phase 4 action plan between 6 December 2027 and 5 December 2028. Then file progress updates by 5 December 2029, 5 December 2030 and, new for this phase, 5 December 2031. Each one needs director sign-off. Participants with zero energy consumption do not need an action plan.

Tip: Much of what you submit is published, so only commit to measures you can deliver.

What changed for Phase 4, and what is still undecided

The Phase 4 changes are now law through the ESOS (Amendment) Regulations 2026. The Environment Agency published updated guidance on 30 July 2026.

Net zero is voluntary for now

In February 2025, DESNZ said net zero requirements would not apply in Phase 4. The explanatory memorandum to the 2026 Regulations says the government will consider a net zero assessment after Phase 4, to fit with wider reporting changes such as UK sustainability reporting. You can choose to follow PAS 51215-1:2025, a BSI process for combined energy and decarbonisation assessments, but MESOS does not collect it.

Further reform: proposed only

In September 2026 the government said DESNZ intends to consult on ESOS and SECR later in 2026, informed by an ongoing ESOS evaluation. Older ideas, such as extending ESOS to medium-sized businesses or requiring action on audit findings, remain undecided. None of this is law.

ESOS penalties and enforcement

Regulators can serve compliance and enforcement notices, impose civil penalties and publish your name and the breach for at least a year. The maximum penalties are set in Part 8 of the 2014 Regulations.

The worst case for a missed audit is £90,000 plus publication. The Environment Agency's enforcement policy says it normally uses the statutory maximum, although new entrants in their first compliance period normally face an initial audit penalty of up to £5,000. A missed action plan or progress update can lead to an enforcement notice, and ignoring that notice attracts the notice penalty above.

Regulators by nation

How it differs across the UK

E England

The Environment Agency enforces ESOS in England and is also the scheme administrator for the whole UK, running MESOS and publishing data.

W Wales

The same rules and dates apply. Natural Resources Wales is the compliance body for participants whose activities are in Wales.

S Scotland

The same rules and dates apply. SEPA is the compliance body in Scotland, and Scottish public procurement law defines which public bodies are excluded.

NI Northern Ireland

The same rules and dates apply. The Northern Ireland Environment Agency is the compliance body. Wholly or mainly offshore participants are regulated by OPRED instead.

Key dates

• 5 Dec 2026

  ESOS Phase 3: submit second annual action plan progress update

  Organisations that submitted an ESOS Phase 3 action plan EWSNI

• 31 Dec 2026

  ESOS Phase 4 qualification date: check whether you are a large undertaking

  UK undertakings and corporate groups EWSNI

• 5 Dec 2027

  ESOS Phase 4 compliance date: complete assessment and notify compliance in MESOS

  ESOS Phase 4 participants EWSNI

• 5 Dec 2028

  ESOS Phase 4: submit action plan

  ESOS Phase 4 participants (except zero energy consumption) EWSNI

• 5 Dec 2029

  ESOS Phase 4: submit first action plan progress update

  ESOS Phase 4 participants with an action plan EWSNI

• 5 Dec 2030

  ESOS Phase 4: submit second action plan progress update

  ESOS Phase 4 participants with an action plan EWSNI

• 31 Dec 2030

  ESOS Phase 5 qualification date

  UK undertakings and corporate groups EWSNI

• 5 Dec 2031

  ESOS Phase 4: submit third (final) action plan progress update

  ESOS Phase 4 participants with an action plan EWSNI

Dates marked “Proposed” are announced or consulted on but not yet law. See the full deadlines calendar.

Penalties and enforcement

Where to do it: official services

• Manage your ESOS reporting (MESOS) Report or submit

  Submit ESOS notifications of compliance, action plans and progress updates. Environment Agency EWSNI

• Energy Savings Opportunity Scheme (ESOS) guidance Guidance

  Overview of who qualifies, key dates, approved lead assessor registers and regulator contacts. Environment Agency and DESNZ EWSNI

• How to comply with ESOS phase 4 Guidance

  Full Phase 4 compliance guidance, including group rules, audits and report checklists. Environment Agency EWSNI

• Climate change schemes civil penalties data Check a register

  Published civil penalties imposed in England under ESOS and other climate change schemes. Environment Agency E

The law behind this

• The Energy Savings Opportunity Scheme Regulations 2014 EWSNI
• The Energy Savings Opportunity Scheme (Amendment) Regulations 2023 EWSNI
• The Energy Savings Opportunity Scheme (Amendment) Regulations 2026 EWSNI
• Energy Act 2023 (Part 11: Energy savings opportunity schemes) EWSNI

Terms used in this guide

Large undertaking (ESOS)

A UK undertaking with 250 or more employees, or with annual turnover over £44 million and a balance sheet total over £38 million.

Responsible undertaking

The group member, normally the highest UK parent, that carries out ESOS compliance and notifies on behalf of the whole participant.

Total energy consumption

All energy used by the participant's buildings, industrial processes and transport over a 12-month reference period, expressed in kWh.

Significant energy consumption

Areas of energy use making up at least 95% of total energy consumption. You may audit these instead of everything; the rest is de minimis.

ESOS lead assessor

A competent person on an approved professional register who carries out or oversees an ESOS assessment and confirms it meets the rules.

ESOS action plan

A plan, submitted after notifying compliance, listing the energy-saving measures you intend to take in the next compliance period and their estimated savings.

MESOS

Manage your ESOS reporting: the Environment Agency's online service for notifications, action plans and progress updates.

Evidence pack

The records showing how you complied with ESOS, including calculations, estimates, reports and group agreements.

Full glossary