Phase 1 ESOS results
As of 20 June 2016, 6,523 companies had notified the Environment Agency (EA) of their ESOS compliance. A further 285 organisations had submitted their Intent to Comply notices. However, 1,700 organisations have yet to indicate their qualification status. 1,500 of these are being pursued by the EA in England. These companies risk receiving an ESOS enforcement notice.
Any ESOS qualifying organisations that fall within the mandatory scheme, and haven’t yet complied must act now. Businesses must send a notification of their compliance, or ‘Intent to Comply late’, notice to the EA. This will help mitigate the risk of costly penalties which could amount to a total of £90,000.
The EA has stated that the aim of ESOS enforcement notices will normally be to bring organisations into compliance. Civil penalties will only be used in the most serious cases of non-compliance.
Performance so far
Compliance auditing began earlier this year in January and 51 audits were completed by end of March 2016. The EA has reported good levels of compliance overall with no failures. However, 69% of companies have been given remedial actions and will need to rectify their submissions. The most common errors are associated with organisational structures and calculations of total energy consumptions.
18 ESOS enforcement notices have been issued so far to businesses that haven’t yet complied. They are instructing companies to inform the EA of their compliance within 3 months of the ESOS enforcement notice.
The EA’s official document on enforcement and sanctions states the maximum penalty for failing to undertake an energy audit by the compliance deadline is up to £50,000, plus up to an additional £500 for each working day that the breach remains, for a maximum of 80 working days.
So will all businesses that missed the 5 December 2015 compliance deadline, the 29 January 2016 Intent to Comply deadline and the 3 months grace period after that (up to 29 April 2016) now face these strict fines?
Currently, the EA is pursuing 1,500 companies in England who have yet to engage with ESOS at all. Should all these companies receive enforcement notices there’s a possibility the EA could be seeking a maximum of £135,000,000 in fines.
Though they are due to publish a list of ESOS compliant businesses later this month, it remains to be seen when the EA will issue the first fines.
Take action to avoid an ESOS enforcement notice
ESOS compliance is not just a mandatory tick-box exercise for qualifying companies, it’s also a great springboard towards improving your energy efficiency, cutting wastage and lowering your costs. If you still haven’t complied with ESOS and need help getting started, click here and learn more about the Utilitywise ESOS service, call 01527 511 757 or email email@example.com.
We agree with the EA’s advice that you need to start planning your compliance approach now. If you have complied and are looking to make the most of ESOS, we can help you with implementing energy saving projects and preparing for phase 2. To find out more about going beyond ESOS compliance click here.