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Businesses face £50k fines for ESOS non-compliance

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Large businesses could face fines of £50,000, plus £500 per day, for failing to submit their Energy Savings Opportunities Scheme (ESOS) audits on time, warns Advantage Utilities.

The mandatory energy assessment scheme requires large UK enterprises to submit an energy audit every four years, with the previous deadline having passed in December 2019.

ESOS audits include the energy consumed by buildings, industrial processes and transport.

Advantage Utilities is calling upon the Environment Agency to clarify its intended actions for enforcing the Scheme following an influx of calls from businesses receiving enforcement notices in the midst of the pandemic. 

Andrew Grover, CEO of Advantage Utilities, said: “There’s a lot to be gained from the ESOS scheme as it puts the UK in good stead for reaching its net zero targets and many companies actually stand to make long-term savings. However, a lot has changed since the deadline passed in December 2019. We are facing a very turbulent time here in the UK with many businesses operating with limited staff and cashflow. The last thing businesses need is more uncertainty and worry.” 

ESOS was introduced in December 2014 in response to the EU Energy Efficiency Directive. The scheme, split into four phases, is designed to allow companies to identify flexible and cost-effective opportunities to improve their energy efficiency. Whilst no fines have been issued yet, there is great concern surrounding the financial burden this poses to businesses, especially during a time of economic crisis.

On average, organisations incurred £6,150 in additional external expenses in relation to the compliance of Phase 1. Around 1,500 companies failed to comply during the first phase and 300 enforcement notices were issued - with companies such as eBay and Gumtree among those fined over the two years following the deadline. 

With the deadline for Phase 2 having passed in December 2019, those failing to comply now face penalties of up to £50,000 as well as an additional £500 per day if the breach is not remedied. The uncertainty surrounding the penalties will create extra strain for businesses trying to survive a second lockdown. 

Grover added: “We’ve seen large organisations with ample resources miss the deadline in Phase 1, it’s unsurprising that smaller businesses may be unclear or even unaware of the scheme in Phase 2.”

As England enters a second lockdown, businesses could stand to benefit from reviewing their utilities to support their bottom line. ESOS and other incoming initiatives, such as Streamlined Energy and Carbon Reporting (SECR) intend to identify these opportunities whilst supporting companies on their way to a net zero UK.

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