ESOS Phase 4: What Businesses Need to Know

8 September 2025

ESOS Phase 4: What Businesses Need to Know

The Energy Savings Opportunity Scheme (ESOS) is back for another cycle. Phase 4 officially began on 6 December 2023, and while the final compliance deadline of 5 December 2027 may feel a long way off, now is the time to start preparing.

If your business was in scope for Phase 3, you’ll already be familiar with the process of calculating energy use, submitting an action plan, and reporting on progress. Phase 4 builds on that foundation, with a few important changes to be aware of.


Who needs to comply with ESOS Phase 4?

The rules on eligibility haven’t changed since the last phase. ESOS applies to “large undertakings” in the UK, meaning your organisation will qualify if, on the qualification date of 31 December 2026, it meets all of the following criteria:

·       Based and registered in the UK

  • Employs 250 or more people
  • Has an annual turnover above £44 million
  • Has an annual balance sheet total over £38 million

To see if your business is eligible, visit our site and answer the questions to see if you should be participating in ESOS phase 4.

Even if you don’t meet the criteria right now, if you cross the threshold on the qualification date, you’ll fall into scope and must submit your compliance notification by 5 December 2027.

If your business previously qualified but no longer does, you’ll need to submit a “Do Not Qualify” (DNQ) notification to the Environment Agency through the online MESOS portal.


Key requirements for Phase 4

Phase 3 introduced the requirement for organisations to create an Action Plan that set out how you intend to cut energy use and when. That same principle continues in Phase 4, along with mandatory progress reporting in the years that follow.

However, there are some updates to note:

  • Action plan progress must now be included within your ESOS assessment. If commitments aren’t met, your business will need to explain why.
  • Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) are no longer valid routes to compliance.
  • While net zero reporting will not yet be mandatory, you can choose to adopt the new PAS 51215 standards for voluntary energy and decarbonisation reporting. This could give your organisation a head start before net zero requirements arrive in Phase 5.


Why prepare early?

Although the official qualification date isn’t until the end of 2026, businesses that get ahead will find compliance much smoother. That means:

  • Measuring energy use across sites and processes now, so you have reliable data ready.
  • Identifying opportunities for efficiency improvements: upgrading heating systems, switching to LED lighting, etc.
  • Engaging senior leadership early.  Your Action Plan needs board-level sign-off, and having directors on board from the start can speed things up later.

Remember, missed deadlines can be costly. Failure to comply can result in penalties of £50,000 plus £800 per day, so leaving it late isn’t worth the risk.


Key dates for your diary

  • 5 December 2025 – Phase 3 Progress Report 1 deadline
  • 5 December 2026 – Phase 3 Progress Report 2 deadline
  • 31 December 2026 – Phase 4 qualification date
  • 5 December 2027 – Phase 4 compliance notification deadline


Phase 4 of ESOS is another step in the UK’s journey towards net zero, encouraging businesses to take practical action on energy efficiency. While the rules may feel familiar, the removal of older compliance routes and the expectation to report on action plan progress may be new to many businesses.

If your business requires assistance with any aspects of ESOS or wants to check your eligibility, contact our expert team at SeeMore Energy for a free consultation that can give you peace of mind, knowing that all of your ESOS reporting meets the requirements.

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