The Energy Savings Opportunity Scheme (ESOS) Phase 4 is underway, starting on 6 December 2023, with a compliance deadline of 5 December 2027 . UK businesses must understand ESOS Phase 4 eligibility , key changes, and deadlines to ensure compliance and avoid penalties. This guide covers everything you need to know about ESOS Phase 4 for UK businesses . Who needs to comply with ESOS Phase 4? The ESOS Phase 4 eligibility criteria remain consistent with Phase 3. Your organisation qualifies as a “large undertaking” if, on the qualification date of 31 December 2026 , it meets all of these requirements: 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 confirm your ESOS Phase 4 eligibility , visit our site and answer the questions to see if your business should be participating. Even if you don’t currently meet these criteria, crossing the threshold by the qualification date means you must submit a compliance notification by the ESOS Phase 4 deadline of 5 December 2027 . If your business qualified for Phase 3 but no longer meets the criteria, you must submit a “Do Not Qualify” (DNQ) notification via the Environment Agency’s 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 Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) are no longer valid routes to compliance.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. These ESOS Phase 4 key changes ensure businesses focus on actionable energy efficiency measures and transparent reporting.
The UK's Modern Industrial Strategy 2025 Electricity Discounts for Over 7,000 Businesses Thousands of UK businesses are set to benefit from a new government plan to cut energy costs, boost competitiveness, and support long-term industrial growth. As part of the newly launched Industrial Strategy, electricity bills for over 7,000 energy-intensive firms will be cut by up to 25% from 2027. What Is the UK's Modern Industrial Strategy? Unveiled on 23 June 2025, the government’s 10-year Industrial Strategy is designed to stimulate business investment, create over one million skilled jobs, and address key structural barriers that have hindered British industry — particularly high electricity prices and delays in grid connections. Central to this plan are two new policies focused on reducing energy costs for businesses: The British Industrial Competitiveness Scheme (BICS) An expanded British Industry Supercharger programme
Understanding ESOS Phase 3: Key Requirements for Businesses What is ESOS? The Energy Savings Opportunity Scheme (ESOS) is a mandatory program in the UK targeting large businesses. It requires them to assess their energy consumption, identify areas for improvement, and implement measures to become more energy-efficient. This not only benefits the environment by reducing carbon emissions but also translates to cost savings for the businesses involved. Who Needs to Comply? Large undertakings as defined on December 31, 2022 are required to comply with ESOS. This applies to: • Companies employing 250 or more people. • Companies with an annual turnover exceeding £44 million and a balance sheet exceeding £38 million. What Actions are Required in Phase 3? Phase 3, currently ongoing, introduced stricter regulations compared to previous phases. Here's a breakdown of the key requirements: 1. Appoint a Qualified Lead Assessor: An approved professional must review and sign off on the energy audit report. 2. Measure Total Energy Consumption: This covers a 12-month reference period ending before June 5, 2024. It includes energy used in: o Buildings (heating, lighting, etc.) o Industrial processes o Transportation (company vehicles) 3. "De Minimis Exemptions" (Optional): Businesses can exclude up to 5% of their energy consumption from the report. 4. Calculate Energy Intensity Ratios: This involves expressing energy use in relation to: o Buildings: kWh per square meter o Transport: kWh per mile travelled o Industrial processes: Energy consumed per unit of output Reporting and Action Plan: • Completion of the Report: Analyse your organization's energy consumption and efficiency. • Recommendations for Improvement: Identify cost-effective measures to reduce energy use. • Board-Level Sign-off: Get the report approved by a director. • Develop an Action Plan: Outline specific actions to achieve energy savings over the next four years. This includes: o Planned measures to reduce energy consumption o Timeline for implementation o Expected energy savings o Method used to estimate savings Key Deadlines: • Compliance Notification: Submit to the Environment Agency by June 5, 2024 (previously December 5, 2023). • Action Plan Submission: December 5, 2024. Additional Information: • Businesses that qualified for Phase 2 but not Phase 3 should inform the Environment Agency. • The Environment Agency website provides further details and resources: https://www.gov.uk/guidance/energy-savings-opportunity-scheme-esos If you require assistance with your ESOS compliance, contact us today to see how we can assist you ahead of the deadline.
Who is Eligible for the Industrial Energy Transformation Fund (IETF)? The IETF is for businesses in the UK with high energy usage who are looking to cut their energy consumption and reduce their carbon emissions. There are a few key things to determine eligibility: • Industry : Your company must be in an eligible industry, such as mining and quarrying, manufacturing, recovery and recycling of materials, or data centres. Some new sectors are included in Phase 3, such as controlled environment horticulture activities, industrial laundries, and textile renting facilities. Coal mining is no longer eligible. • Location : Your industrial site must be located in England, Wales, or Northern Ireland. If your company is registered in Scotland but your site is elsewhere in the UK, you can still apply. Businesses in Scotland should look into the Scottish Industrial Energy Transformation Fund. • Project Type: Your project should focus on cutting industrial energy use. The IETF offers funding for: o Feasibility and Engineering Studies: These studies help assess the viability of potential solutions. o Energy Efficiency Deployment: This involves implementing technologies that reduce energy consumption within your industrial processes. o Deep Decarbonisation Deployment: This focuses on technologies that significantly reduce carbon emissions from your industrial processes.
T he EII (Energy Intensive industry) levy exemption scheme is set to change over the next year. It’s changes are designed to save eligible businesses money from their non-commodity charges and keep them competitive internationally. In this article we will analyse how the changes translate into concrete savings, when they take place, and proposed future changes. Changes to current discount rates Currently the scheme offers businesses operating within eligible industries discounts on non-commodity costs. At the moment, the scheme offers an 85% discount on Renewable Obligations (RO) , Feed-in Tariffs (FiT) , and Contracts for Difference (CfD) . This is due to change on April 1st, with the discounted rate increasing from 85% to 100%. With the current 85% discount, it is estimated that these savings equal approximately 3.5p/kWh consumed. Capacity Market changes In October 2024 Capacity Market charges are set to be added to the exemption. This will add a further discount of approximately 2.8p/kWh to the non-commodity charges paid per unit of electricity consumed. DUoS charges Reviews are currently taking place looking at the viability of including DUoS (Distribution Use of System) charges within the exemption scheme, with a view of adding them to the list of exempt charges in 2025. If these are included this could lead to the total discount being worth approximately 9p/kWh.
Government support in the manufacturing sector Over the past 2 years energy prices have risen significantly, impacting both consumers and producers. Few sectors have felt the pain of rising energy prices more than the manufacturing industry. The government is providing a number of support measures to help the manufacturing industry to improve its energy efficiency and reduce its energy costs. The following schemes and programmes were designed to assist businesses in reducing their energy spend and to invest in more environmentally friendly technologies. The Industrial Energy Transformation Fund (IETF) The Industrial Energy Transformation Fund (IETF) is a government fund designed to help businesses with high energy use to cut their energy bills and carbon emissions, through investing in energy efficiency and low carbon technologies. The fund is open to businesses of all sizes in all sectors, but it is particularly targeted at businesses in the energy-intensive industries sector. The IETF provides funding for a variety of projects, including: Feasibility and engineering studies for energy efficiency and low carbon technologies Deployment of energy efficiency and low carbon technologies Development of new energy efficiency and low carbon technologies The IETF is open to businesses that can demonstrate that they have a clear plan to reduce their energy costs and carbon emissions. The fund has the potential to make a significant contribution to the UK's efforts to reduce its carbon emissions and is expected to help businesses to save over £1 billion in energy costs. Reducing their carbon emissions by over 2 million tonnes per year. Its aim is to help businesses to reduce energy costs, improve competitiveness, increase investment in energy efficient equipment, and assist with job creation. The Manufacturing Energy Toolkit Available to SMEs, the Manufacturing Energy Toolkit provides access to experts and equipment, and can include a complimentary energy assessment or energy transition roadmap. In-depth assessments can be carried out at the production site to see which areas can benefit from immediate energy reductions. Once the problem areas have been identified, a plan for further consumption cuts can then be put in a place with a view to significantly reducing the energy bills. During the pilot scheme it was found that total energy in production can be almost halved, with up to 90% energy reductions achieved from individual machines. This process also takes a look at greenhouse gas emissions with a view to helping businesses improve their sustainability. The Energy Intensive Industries (EII) scheme This scheme was designed to help businesses reduce their energy costs and improve their competitiveness, qualifying sectors for this scheme included engineering, mining, steel, and meat processing. While the scheme is still running, it is now closed to new applicants and is planned to be phased out by 2025, although there are talks to provide other industry specific schemes that may replace some of the cost reductions lost when the EII is phased out. If you would like further information or assistance with any of these schemes, or would like to see other ways in which we can help you reduce your energy spend, then contact us today. We are currently offering a 3 month free trial of our Energy Manager/Bill Validation system, and we can assist you in making sure you get the best rates when your contracts enter their renewal window.
Receiving the ETII discount The Scheme The UK government has introduced a new scheme to help energy-intensive businesses cope with rising energy costs. The Energy and Trade Intensive Industry (ETII) scheme provides a discount on energy bills for businesses that meet certain criteria. Unlike other government discount schemes , eligible companies will need to apply to receive the discount. There is also a deadline for this scheme, and applications need to be received by the 25th of July 2023 in order for an organisation to receive the discount during the period of April 2023 – March 2024. In our previous article we gave an outline for what this scheme entails and who is eligible to apply for it. Today’s article will follow on from that showing what you can expect to happen after your application has been submitted and how your discount will be applied. After the application After the submission of an application there will be a review conducted by the Department for Energy Security and Net Zero (DESNZ). Successful applications will then be issued with an ETII certificate. If there are changes to the business that may affect their eligibility to the scheme they will be required to reapply. Such changes could include a change of supplier, change of meter numbers, or changes that mean they no longer generate 50% of their revenues from UK activity. How the discount is applied Once an application has been successful the ETII discount will be applied to bills where the prices are above the thresholds outlined. With the ETII discount there are thresholds of 9.9p/kWh for gas and 18.5p/kWh for electricity, and there are maximum discounts of 4p/kWh for gas and 8.9p/kWh for electricity. These discounts can apply to up to 70% of energy used. Example: If a company with the ETII discount is consuming 10,000 kWh/month and is paying over 27.4p/kWH then they will be entitled to the 8.9p/kWh discount on 70% of consumption. This 8.9p discount per unit would see save almost £7,500/year just through the ETII discount. If the same company were consuming 100,00kWh/month then they would be making a monthly saving of £6,230. Where a business is paying over 30.2p/kWh for electricity they will still be entitled to the government’s baseline support discount, even when they are eligible for the additional ETII discount. Given that the scheme has a lower threshold than the government’s baseline support discount it is important for eligible companies to complete their application before the deadline and to ensure that they receive the maximum amount of support that they are entitled to. Further Help If you require any help with your application or would like assistance in gauging whether your business qualifies for the discount, then don’t hesitate to get in touch with one of our trained advisors at Seemore Energy. We can help you through every step of the process and ensure you receive the full discount that you are entitled to. Don’t risk missing the deadline, allow us to check your eligibility today.
