ESOS Phase 4: eight duties, read from the Regulations

Regulation 4(2) says a compliance period begins on the 6th December immediately following the end of the preceding one, and ends on the 5th December four years later.

The compliance date is the last day of the period, and the qualification date is the 31 December immediately before it, so Phase 4 qualifies on 31 December 2026 and complies on 5 December 2027.

SI 2026/701 did not amend regulation 4, so the 2026 changes moved no date.

Phase 3 is the one exception in the scheme’s history: its compliance date was extended by six months to 5 June 2024, but the fourth period still began on 6 December 2023, as the Environment Agency’s compliance-period table shows.

Everything after the compliance date is arithmetic on regulations 34A(10) and 34B(8): the action plan and progress updates run on the anniversaries of the first day of the next period, 6 December 2027.

Each of those dates is the last day of a twelve-month window, not an appointment, which is why a plan can lawfully be notified at any point from 6 December 2027.

The nearest ESOS date is not a Phase 4 one: the second progress update on a Phase 3 action plan falls on 5 December 2026, twenty-six days before Phase 4 qualification.

Under Schedule 1, paragraph 1, a large undertaking employs at least 250 persons, or has an annual turnover in excess of £44 million and an annual balance sheet total in excess of £38 million.

Headcount is not taken on a single day: paragraph 10 averages the persons employed in each month of the accounting period used for the financial figures, and paragraph 9 counts employees, owner managers and partners.

The money figures come from the accounts for the financial year ending on, or in the 12 months before, the qualification date (paragraph 5).

Status is sticky: paragraph 11 keeps an undertaking large until it falls within the small-or-medium definition for two consecutive accounting periods.

Regulation 15(1)(b) brings in every small or medium undertaking that is a group undertaking of a large one, so one large member takes its whole UK group into the scheme.

SI 2026/701 widened the insolvency exclusion in regulation 16 to cover proceedings at any point between the qualification date and the compliance date, and moved its test to the Insolvency Act 1986.

The ESOS qualification page works through group structures, the ESOS exemptions page covers who falls outside, and the plain-words ESOS page has a check that runs the test on your own figures.

ESOS borrows its idea of a group from the Companies Act 2006, sections 1158 to 1162, so a parent is whoever holds a majority of votes, can appoint the board, or exercises a dominant influence.

The unit that complies is the participant, and by default it is the highest UK parent with every UK subsidiary beneath it.

Another member can act as the responsible undertaking if the whole group agrees in writing.

A subsidiary can also disaggregate and comply on its own, again only with a written agreement from the highest parent, and it then carries the full duty for its own energy.

Where there is no written agreement, the liability stays with the responsible undertaking of the participant that contains the highest UK parent.

An overseas parent can create two or more highest UK parent groups; if one is in, all are in, and they may choose to aggregate into a single participant.

Private equity portfolios follow the same Companies Act test, which is why a fund structure can bring several otherwise unrelated businesses into the scheme together.

The ESOS qualification page works through more group shapes, and the written agreements belong in the evidence pack described further down this page.

Energy for ESOS is every energy product: combustible fuels, heat brought onto the site, renewable energy, electricity and transport fuel, and the guidance says there are no fuel-type exemptions.

The test is whether the participant is both supplied with the energy and consumes it through assets it holds or activities it carries out.

Holding is not owning: a leased office, a hired van and a borrowed machine are all held.

In a shared building, the guidance expects landlord and tenant to settle between them who has the supply and the control, and to keep the emails that show it.

Transport is in where the organisation is supplied with the fuel for business purposes, and out where it buys a transport service that pays for the fuel indirectly.

That line comes from the Environment Agency’s guidance; the Regulations themselves make transport one of the four organisational purposes without stating it in those words.

Only input energy is counted, so gas burned in a boiler is counted and the heat it makes is not, which avoids counting the same energy twice.

Energy for assets held on 31 December 2026 is included; an asset or activity given up before 5 December 2027 may be left out of the total.

The total may be measured in energy units or in pounds of energy spend, but carbon dioxide is not an energy unit, and the intensity ratios must be in kWh.

Verifiable data means invoices, meter readings, stock records and smart-meter outputs; where a gap cannot be filled that way, the guidance describes three estimation methods — direct comparison, pro-rata extrapolation and benchmarking — and the reasons and method go into the evidence pack and the notification.

Phase 4 has two routes: an ESOS energy audit, or ISO 50001 certification, and a participant may certify part of its consumption and audit the rest.

Display Energy Certificates and Green Deal Assessments are gone: regulation 26 of SI 2026/701 omits regulation 34 outright, although their data may still feed an intensity ratio.

The ISO 50001 trigger is new regulation 33(2A): all of the participant’s total energy consumption, or all of its significant energy consumption, falls under the certified system.

Where it does, the participant is deemed to have complied with regulations 21 and 26 and Chapters 3 and 3A of Part 4, which means the lead assessor, the audit and the ESOS report.

It is not deemed to have complied with regulation 20, the duty to carry out an ESOS assessment, so total consumption is still measured.

The definition in regulation 33(4)(c) recognises only ISO 50001:2011 and ISO 50001:2018, and the certificate must be issued on or after 6 December 2023 and remain valid on 5 December 2027.

A participant whose total consumption is zero kWh is deemed compliant with the assessment duties and with Part 6A by new regulation 33A, and still notifies.

The audit itself must rest on verifiable data where reasonably practicable, analyse consumption and efficiency, identify savings opportunities with an estimate in kWh, and include site visits; the ESOS energy audit and ISO 50001 and ESOS pages go further.

An ESOS energy audit analyses how the participant uses energy and identifies measures that are reasonably practicable and cost-effective, which the guidance calls energy saving opportunities.

It must rest on verifiable data where reasonably practicable, and it must include visits to a representative selection of sites.

Nothing prescribes which sites are representative, but the regulator will look for a reasoned, recorded justification of the sample, so the choice and its reasons are an evidence-pack item.

Participants with many identical sites can expect to need fewer visits than those whose sites differ.

The analysis should use energy consumption profiles where appropriate; where it does not, the alternative method and the reasons are recorded and notified.

Each opportunity carries an estimate of its saving, in kWh since SI 2026/701 amended regulation 27(1)(d)(vi), together with its costs, its benefits and anything relevant to implementing it.

The audit ends with a recommended programme for implementing the opportunities, which becomes the raw material for the action plan a year after notification.

No auditing method is mandated; the guidance mentions ISO 50002 and BS EN 16247 as options, not requirements.

The audit data window is separate from the reference period for total consumption: the total must use one twelve-month period that, on the Environment Agency’s reading, includes 31 December 2026, while audits may use different twelve-month periods for different assets.

Energy cost data cannot be used in the audit itself, even though spend is allowed for the total and for identifying significant consumption.

Audits carried out for other schemes may count if they fall within the compliance period and meet the ESOS minimum requirements, and the ESOS energy audit page sets those requirements out in full.

The evidence pack is the one duty with no filing date and no portal: it is built as the work is done and handed over only when a regulator asks.

Regulation 28(1) lists what it holds, and regulation 18 of SI 2026/701 added six new data limbs and two new records for Phase 4.

The new limbs cover the organisational-purpose calculations, the conversion into kWh, the ESOS report, the estimate of savings achieved since the previous compliance date, and the action plan and progress updates.

The two new records are the methods and data behind any estimate under regulation 21A(1), and the action plan review.

The checklist beside this text follows the regulation limb by limb and drops the items your route does not need.

Under the ISO 50001 route the pack holds the certification evidence instead of the audit data and the report, but the savings estimate and the notification still belong in it.

A zero-consumption participant is outside the duty altogether, because regulation 28 is now subject to regulation 33A, which deems Chapters 2A to 4 of Part 4 complied with.

In practice the working matters more than the conclusions: the de minimis choice and its basis, the site sample and why it is representative, the conversion-factor year, and the indicator behind each intensity ratio.

There is no prescribed format; a folder with an index is enough, and the index is the part that makes the pack usable two phases later.

The pack is kept for two further compliance periods, so a Phase 4 pack runs to at least 5 December 2035, and losing it is its own offence under regulation 44.

The notification of compliance is a structured return in MESOS, not a document upload.

It covers the organisation and its group, the officer who signed, the lead assessor, the routes used, headline consumption and intensity ratios, the opportunities found, and a summary of savings achieved and of the action plan review.

The Environment Agency’s guidance says there is no charge for submitting it, and that a notification can be saved part-way and finished later.

Once submitted it can be downloaded and printed, and that copy belongs in the evidence pack.

The Agency publishes most of each notification, withholding personal and commercially sensitive details, and lists field by field what is published in Appendix B.

Phase 4 publishes more than Phase 3 did: SI 2026/701 switched two rows of Table G to published and added Table J, whose first row, the combined saving in kWh, is published.

Under regulation 10(2) publication falls within six months of the compliance date or of the notification, whichever is later, and the guidance names 10 June 2028 for the fourth period.

If a submitted notification turns out to be wrong, the guidance asks participants to email the ESOS helpdesk at esos@environment-agency.gov.uk to correct it; the Agency says it answers within ten working days.

After the compliance date a regulator may select any participant for a compliance check and ask for the evidence behind the notification.

On 30 September 2026 the scheme is in Phase 4, which began on 6 December 2023, while Phase 3 still has one duty left to run.

The finder beside this text places any date in its compliance period and lists the next dated duties after it, each with the provision it comes from.

ESOS does run on a four-year cycle: regulation 4 ends each period on 5 December four years after it began, and each period ends in a notification.

Inside a period the timetable is the organisation’s own; the Environment Agency’s Appendix C says audit work done at any point in the four years can support compliance so long as it is finished by the compliance date.

The same appendix notes that, on average, each area of significant consumption has to be audited once per compliance period, so an organisation can audit its fleet in one year and its buildings in another.

What cannot slip is the sign-off and the notification, which fall together at the end of the period.

The one-off exception was Phase 3, whose compliance date was pushed to 5 June 2024 while Phase 4 had already begun, which is why the two phases overlapped for six months.

The Environment Agency’s guidance is blunt that the scheme regulators cannot amend the compliance deadline.

The same passage says the deadline was revised by the 2026 amendment, which is wrong: SI 2026/701 does not touch regulation 4, and 5 December 2027 comes from that regulation as it has stood since 2014.

A participant that cannot notify in time should contact its regulator before the date, using the contacts in Appendix D.

The regulator is fixed by the registered office of the responsible undertaking: the Environment Agency in England, Natural Resources Wales, the Scottish Environment Protection Agency, the Northern Ireland Environment Agency, and the Secretary of State for activities mainly offshore.

Contacting the regulator does not pause anything; a missed notification is the regulation 43 offence, and the calculator beside this text shows how the fixed and daily limbs combine.

The regulators work with three kinds of notice: a compliance notice asking for information, an enforcement notice saying what must be done, and a penalty notice imposing the penalty.

Any of them can be appealed where it rests on an error of fact, is wrong in law or is unreasonable.

Appeals go to the First-tier Tribunal where the responsible undertaking’s registered office is in England, Wales or the UK offshore area, to the Scottish Ministers for Scotland, and to the Planning Appeals Commission for Northern Ireland.

The ESOS penalties page covers the four-step calculation, and the tribunal case in which a penalty was halved, in more depth.