ESOS · Energy, utilities and industry
ESOS compliance guidance for energy and industry
ESOS compliance guidance is written for every sector, but generators, utilities and energy-intensive, multi-site manufacturers meet its hardest questions first (EA Phase 4 guidance).
Which energy counts when you make energy, how UK ETS and Climate Change Agreement data fit, and how to cover many sites without auditing every one.
The Phase 4 compliance date is 5 December 2027 and the test of who is in is the same for every sector.
Generators and process energy
When you make energy, count what goes in
ESOS counts energy that is both supplied to and consumed by the participant’s assets and activities.
In a combined heat and power or other power generation process, the Environment Agency’s guidance says “only the incoming fuel and mains electricity need to be included” (§4.3.3).
That avoids counting the same energy twice, once as fuel and again as the heat and power it becomes.
Energy an organisation generates itself is otherwise in scope, with one exception: surplus heat captured and consumed from an industrial process.
For a supplier or network operator, the energy it sells or carries is not its consumption; its offices, depots, fleet and own plant are.
Industrial processes are one of the four organisational purposes, each with its own energy intensity ratio.
| Energy | In total energy consumption? |
|---|---|
| Fuel into a CHP or other generating plant | Yes |
| Mains electricity imported | Yes |
| Heat and electricity the CHP produces and you use | No — already counted as the fuel |
| Energy you generate yourself otherwise | Yes |
| Surplus heat captured and reused from an industrial process | No |
| Energy supplied to others and not used by you | No |
UK ETS, CCAs and permits
Other schemes supply data, not compliance
Energy-intensive sites are usually already in one or more other schemes, and none of them is an ESOS route.
The Environment Agency’s Appendix C says CCA milestone data can be used in the assessment, and that an energy audit done for a CCA may count as an ESOS audit if a lead assessor conducted, verified or reviewed it and it meets the ESOS minimum standards.
The data management then has to extend to sites and energy uses outside the CCA target unit.
UK ETS data can be used in the same way, again with separate collection for sites and activities outside the scheme.
Appendix C also notes that information gathered for an environmental permit, and for CHP quality assurance, may help build the energy data.
The energy and utilities guide sets out the other reporting regimes these businesses face.
Participation in UK ETS, Climate Change Agreements, SECR and other schemes “does not automatically count as ESOS compliance”.
Their data can help calculate total energy consumption, but additional work is likely.
Multi-site manufacturers
Covering many sites without auditing every one
| Lever | What the rules allow | Where |
|---|---|---|
| Measure in £ where kWh is patchy | Total and significant consumption can be measured by energy spend | Reg 25(2)(b); EA §4.1 |
| Choose the de minimis | Up to 5% can be excluded — by site, fuel, activity or group company | Reg 25; EA §5 |
| Sample sites | Audits may sample like sites, with the sampling methodology justified | ESOS PIR 2025 ¶12(a) |
| Use ISO 50001 where it exists | Certified sites are deemed covered; the rest is audited | Reg 33 as amended |
| Reuse CCA and UK ETS data | Accepted as data; audits may count if lead-assessor reviewed | EA Appendix C |
| Participate as one group | The default; the group may agree to disaggregate | Regs 15, 17; EA §2 |
For an estate of similar sites, sampling is where most of the audit effort is saved and where most of the scrutiny lands.
DESNZ’s 2025 review records that the Phase 3 changes required organisations to justify the methodology used for their site sampling.
Audit data must cover twelve months beginning no earlier than 6 December 2022 and no earlier than 24 months before the audit starts, so a late audit cannot rely on old data from any site.
The full sequence of steps is on ESOS compliance, and the dates and changes on ESOS Phase 4.
Choosing an ESOS audit service
Five questions, no rankings
People search for the best ESOS audit service for multi-site manufacturers; this site does not rank or recommend providers.
What can be checked is objective: the lead assessor must be on one of the seven approved registers GOV.UK lists, which include the Energy Institute’s (GOV.UK).
Independence matters for sign-off: an independent lead assessor means one responsible officer reviews the assessment, and otherwise two must.
The questions beside this section are the ones the rules make relevant; the answers are for you to weigh.
- Which approved register are you on today, and can we see the entry?
- Will you be independent of us under regulation 30(4)?
- How would you sample our sites, and how will you justify it?
- Which of our consumption is already under ISO 50001 or a CCA audit?
- How will you evidence the savings achieved this phase, per measure in kWh?
Phase 4 for heavy users
What Phase 4 adds for energy-intensive sites
The ESOS report now has to state the energy savings achieved in the compliance period, per measure in kWh, and only the combined total is published.
It must also review the previous action plan, listing measures not implemented and why.
After notification comes a new action plan by 5 December 2028 and three progress updates, the last by 5 December 2031.
Display Energy Certificates are no longer a route, and ISO 50001 covering total or significant consumption now discharges the audit, lead assessor and report duties (SI 2026/701); ISO 50001 and ESOS sets out the conditions.
The qualification test is sector-neutral: at least 250 persons, or turnover above £44 million and a balance sheet total above £38 million (Sch 1).
Beyond ESOS
The bodies around the sector
ESOS is regulated by the Environment Agency and its counterparts in Wales, Scotland and Northern Ireland, not by the energy market regulator.
Ofgem regulates the gas and electricity markets, and Energy UK is the trade association for the energy industry; neither administers ESOS.
The Carbon Trust publishes energy-efficiency material that some organisations use alongside their audits.
The first ESOS review, in 2020, and the 2019 SECR guidance were published by the Department for Business, Energy and Industrial Strategy; DESNZ is now responsible for ESOS policy, and the Environment Agency for the guidance (EA guidance, “About this guidance”).
The same energy data feeds annual carbon reporting; ESOS reporting explains the conversion to tCO2e.
Frequently asked
ESOS for energy and industry: questions people ask
How does ESOS treat a CHP plant or on-site generation?
Only the incoming fuel and mains electricity count towards total energy consumption. The Environment Agency’s Phase 4 guidance says the heat created and used and the electricity created do not need to be included in the calculation. Energy the organisation generates itself is otherwise within scope, except surplus heat captured and consumed from an industrial process.
Does energy we supply to customers count for ESOS?
No. ESOS covers energy that is both supplied to and consumed by the participant’s own assets and activities. Energy an organisation supplies to others and does not itself use is not part of its total energy consumption.
Does UK ETS or a Climate Change Agreement count as ESOS compliance?
No. The Environment Agency’s guidance says participation in those schemes does not automatically count as ESOS compliance. Their data can be used to calculate total energy consumption, and an energy audit done for a CCA may count if a lead assessor conducted, verified or reviewed it and it meets the ESOS minimum standards, but sites and activities outside those schemes still need covering.
How does ESOS work for a multi-site manufacturer?
The group measures total UK energy consumption across all sites, may identify the areas making up at least 95% of it, by energy units or by spend, and covers those with energy audits or ISO 50001. The remaining 5% or less can be de minimis, chosen by site, fuel, activity or group company. Where audits sample sites rather than auditing all of them, the methodology for the sampling must be justified, a requirement introduced for Phase 3.
What should a multi-site business look for in an ESOS lead assessor?
Confirm the person is currently on one of the seven approved registers, not merely a member of the body; ask whether they will be independent of your organisation, which decides whether one or two responsible officers must review; ask how they would sample sites and justify it; and ask whether any of your consumption is already covered by ISO 50001. This site does not rank or recommend providers.
Are energy network operators and suppliers in ESOS?
If they are large undertakings, yes: the test is size, not sector. An undertaking qualifies with at least 250 persons, or with turnover above £44 million and a balance sheet total above £38 million, on the qualification date of 31 December 2026. What they must cover is their own energy consumption, not the energy they transport or sell.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- Environment AgencyHow to comply with ESOS phase 4 (30 July 2026)
§4.1 common unit; §4.3 energy supplied and consumed; §4.3.3 CHP and power generation; §4.5 other schemes.
- Environment AgencyAppendix C: advice for complying with ESOS
CCA milestone data and audits; UK ETS data; CHPQA; EPR permit data.
- Environment AgencyESOS: find out if you qualify and how to comply
Seven approved registers; the audit data window.
- legislation.gov.ukThe Energy Savings Opportunity Scheme Regulations 2014 (SI 2014/1643)
Organisational purposes (reg 2(1)); group participation (regs 15, 17).
- legislation.gov.ukSI 2014/1643, Schedule 1 — large undertaking
The size test, the same for every sector.
- legislation.gov.ukSI 2014/1643, regulation 25 — significant energy consumption
95% by energy units or energy spend; elective.
- legislation.gov.ukSI 2014/1643, regulation 25C — energy intensity ratios
One per organisational purpose, industrial processes included.
- legislation.gov.ukThe ESOS (Amendment) Regulations 2026 (SI 2026/701)
Savings achieved, action plan review, ISO 50001 route.
- Department for Energy Security and Net ZeroESOS Regulations 2014 — second post-implementation review (July 2025)
¶12(a): Phase 3 required a justified site-sampling methodology.
- Department for Energy Security and Net ZeroEnergy audits and reporting research, including ESOS
The ESOS evaluations and the 2020 review.