ESOS enforcers target non-compliant companies

Companies failing to comply with the Energy Savings Opportunity Scheme (ESOS) are being investigated by the Environment Agency.

Companies that don’t comply with ESOS face the threat of heavy sanctions, including a range of harsh financial penalties as well as the intense scrutiny from the Environment Agency (EA).

The Environment Agency (EA) has ramped up its operations around ESOS with the creation of an ESOS Enforcement Team. In a newsletter, it also reports that it will be investigating the 1700 companies that appear to have failed in compliance.

A quick recap: ESOS is a mandatory scheme affecting larger companies with more than 250 employees or an annual turnover of more than 50 million euros, and an annual balance sheet total over 43 million euros. These companies have to carry out an energy efficiency audit that identifies the potential areas where carbon cuts and electricity savings could be made.

Compliance deadline

The EA says that 1700 companies did not complete the Notification of Compliance by the deadline of 30 June 2016. A further 150 organisations had only made initial steps by sending an intent to comply notice at that time, too.

In context, the former Department for Energy and Climate Change set the first compliance deadline for December 5th, 2015, but then extended it to January 29th, with companies that aimed to comply through achieving ISO 50001 certification having until June 30^th, 2016.

The EA’s enforcement move clearly signals that its patience with non-compliant firms is running thin, and it will not hesitate to use the strong sanctions against those who ignore the ESOS mandate.

The new enforcement team is specifically targeting those companies who it feels are in the highest-risk category, which has not been explicitly defined but signals a determination to force action swiftly.

£50,000 fine

The costs for organisations that fail to comply include a fine of up to £50,000 initially for failure to carry out an energy audit with further penalties added daily for up to 80 working days. Companies fined will have notice of penalties publicised.

In addition, organisations that fail to notify face fines of up to £5,000 with additional daily penalties of £500 for up to 80 working days, with these made public.

Finally, companies can be fined up to £50,000 for making false or misleading statements.

For those companies who had complied, the EA advises that the audits have generally met the guidelines, although 65% needed to update the audits to be fully compliant. EA compliance checks continued the end of March 2017.

At the very least, companies who did not take action will face enforcement notices and the strain of being in the EA line of fire. This is still the case, so it makes sense to ensure compliance by carrying out a full energy audit on time.

For companies who comply, there is a lot to be gained by implementing energy saving opportunities identified in audits, including recovering compliance costs and then continue to cut costs.

We can help non-compliant firms to meet with ESOS requirements and assist companies who have complied to implement energy-audit recommendations and maximise commercial benefits. From installing intelligent building controls to managing your energy-saving project, we can help you become more eco-friendly.