Out-Law News 2 min. read
19 Oct 2015, 12:39 pm
The EA said that it was not able to amend the compliance deadline of 5 December 2015, as this was set out in the EU's Energy Efficiency Directive and related regulations. However, it said that it was "not normally expecting" to take enforcement action against firms provided that they submitted the necessary notifications by 29 January 2016.
"This is not an extension to the legal deadline," the EA said in new guidance on compliance with the ESOS obligations. "Rather, it reflects the ability to exercise discretion when taking enforcement action."
In addition, the EA said that it only intended to levy civil penalties against firms for non-compliance in "the most serious cases". Instead, firms will usually be sent an enforcement notice, giving them up to three months to remedy any outstanding requirements, according to the guidance.
Organisations that expect to miss the 5 December deadline will be required to inform the EA of the reasons for this and provide a date by which they expect to be able to submit their compliance notification, the regulator said. They will also be expected to keep records of "their efforts towards ESOS compliance, including appointment of a lead assessor, prior to the deadline", the EA said.
Organisations that intend to achieve ISO50001 energy management system certification to demonstrate their compliance will have until 30 June 2016 to do so, according to the guidance. These organisations will not be required to appoint a lead assessor, unless this certification will not cover 100% of their energy use.
"It is good to see that the EA is willing to allow some flexibility with ESOS notifications, following its experience of similar problems with compliance at the beginning of the Carbon Reduction Commitment (CRC) scheme," said environmental law expert Georgie Messent of Pinsent Masons, the law firm behind Out-Law.com.
"Our expectation is that many of the 10,000 participating companies will miss the 5 December 2015 deadline as there seems to be a low level of awareness of ESOS despite the EA's communications to likely participants. We understand that the EA is preparing to serve enforcement notices on companies that have not met the notification deadline, to trigger compliance, so we anticipate an increased need for help with ESOS advice in early 2016," she said.
The ESOS scheme requires "large enterprises" which meet certain employee, turnover and profit thresholds to report on their total energy consumption across a 12-month period. They must also conduct an energy audit to analyse that consumption, identify ways in which energy efficiency can be improved and recommend cost effective measures "within the participant's control", although they will not be legally required to implement these measures.
ESOS has been developed as part of the UK's responsibilities under the EU's Energy Efficiency Directive. It applies to large commercial businesses and charities but not to public sector bodies, which are subject to different requirements under the directive. For the first assessment, organisations will be required to report in respect of energy usage over a consecutive 12-month period starting no earlier than 1 January 2014 and ending before 5 December 2015. They will then be required to repeat the assessment once every four years.