ESOS Phase 4 Guidance Published: What Businesses Need To Know

The Environment Agency has published new guidance for Phase 4 of the Energy Savings Opportunity Scheme (“ESOS”), following the Energy Savings Opportunity Scheme (Amendment) Regulations 2026 (“2026 Regulations”) which came into force in July 2026. The guidance has been updated to address certain discrete amendments to ESOS and does not represent a significant overhaul in the approach to ESOS compliance. 

What are the key changes for Phase 4?

The principal differences that have been introduced by the 2026 Regulations are:

• Participants must now provide more detailed information about energy efficiency measures that have been implemented during the compliance period. The ESOS report and notification of compliance must include details of the measures undertaken to achieve energy savings, an estimate of the energy savings achieved, and the energy saving category to which the measures relate. 
• Organisations that were required to submit an ESOS Phase 3 Action Plan must include an ESOS “action plan review” in the Phase 4 ESOS report and notification of compliance. This is in addition to the progress updates required for the two years following submission of the Action Plan.
• For Phase 4, where measures included in the Phase 3 Action Plan have not been implemented and are not expected to be implemented before the end of the Phase 4 compliance period, an explanation must be provided.
• Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) are no longer available as alternative compliance routes and therefore cannot be used as a substitute for an energy audit. The Government has explained that DECs and GDAs can produce less detailed or tailored recommendations than an energy audit. Participants can comply through one or more energy audits, ISO 50001 certification, or a combination of the two. 

While the new regulations do make some further minor amendments, the Phase 4 guidance will be familiar to organisations that have previously complied with ESOS. 

The Government have published an explanatory memorandum providing further detail on the changes. 

Preparing for phase 4 compliance

As organisations plan for Phase 4, they should diarise the following key Phase 4 dates:

• Qualification date: 31 December 2026

• Compliance date: 5 December 2027

• Compliance period: 6 December 2023 to 5 December 2027

Organisations should also diarise the subsequent Action Plan and progress update deadlines: 

• Phase 4 Action Plan: 5 December 2028

• First and second annual progress updates: 5 December 2029, 5 December 2030

• Third annual update (new to Phase 4): 5 December 2031

An organisation that meets the ESOS qualification criteria on 31 December 2026 will be required to complete its assessment and submit its notification of compliance by 5 December 2027. 

The qualification thresholds are unchanged for Phase 4. You must take part in ESOS if your organisation, or any UK undertakings in your group, is a large undertaking on the qualification date. A large undertaking is an undertaking meeting one or both of the following conditions: 

• 250 or more employees; or

• Annual turnover greater than £44 million and an annual balance sheet total greater than £38 million. 

Organisations should also review their contacts in the MESOS reporting system, removing outdated contacts and adding relevant new contacts, to help ensure information remains accurate and communications are not missed.

For organisations that are already complying with ESOS, these new regulations are unlikely to cause a significant change in the way you meet your obligations, however you should make sure your compliance processes are updated to reflect these amendments. 

We frequently advise clients on compliance with ESOS, particularly in relation to complex group structures where decisions about which parts of the organsiation are caught is an issue or decisions need to be made about whether to comply as a group or disaggregate for the purposes of ESOS compliance.

If you would like to discuss ESOS compliance, please get in touch with Michael Barlow your usual Burges Salmon contact. 

Written by Lucinda Huntsman

ESOS phase 4 guidance provides information on the qualification, compliance and notification requirements for the fourth compliance period (phase 4).
https://www.gov.uk/government/publications/comply-with-the-energy-savings-opportunity-scheme-esos-phase-4