£45k penalty for ESOS scheme non compliance

Energy consultant with Inenco Matt Jones warned qualifying firms that missed submitting details of their energy audit to the Department of Energy and Climate Change (DECC) by December 5 2015 risked a fixed penalty of £5,000.

“Businesses are liable to an additional £500 for each working day, starting on the day after service of penalty until the notification is completed, subject to a maximum of 80 days,” Jones told the seminar in London, organised by law firm DWF.

Completing an ESOS audit is mandatory for all firms employing more than 250 staff or with an annual turnover of more than £42.5M or a balance sheet exceeding £36.5M.

But at the end of June, only 32 businesses had notified the Environment Agency of ESOS compliance from a total of about 14,000 eligible firms.

Only 32 businesses notified Environment Agency

Environment Agency ESOS project manager Jo Scully said firms should take immediate action.

“The feedback we have received from businesses shows that awareness of the scheme has risen but organisations still have work to do in order to comply,” said Scully. “In response to this we sent out a reminder letter to 14,000 businesses urging them to take action. We have also been raising awareness by holding workshops, producing a regular newsletter, publishing guidance on our website and setting up a dedicated helpdesk.”

Firms that had yet to prepare an ESOS compliance audit should act urgently to beat the bottleneck, said Jones. “December 5 is the date ringing in everybody’s ears. There is going to be a massive bottleneck, if not now, then before December.”

“A pain in the backside”

While ESOS could be viewed as “a pain in the backside”, compliance was an opportunity to make significant savings, said Jones, who highlighted millionaire Sir Richard Branson’s view: “Climate change is one of the greatest wealth generating opportunities of our generation.”

Audits of energy use and efficiency cover industrial processes, building energy use and transport energy use. Audits must be “proportionate and sufficiency representative” in order to construct a reliable picture of overall energy performance and identify the most significant opportunities for improvement.

But firms are not required to act on the energy savings identified.

Audits may be conducted by an approved internal assessor or an external auditor, according to the ESOS rules.

Energy audits must be completed every four years. More details are available from the Environment Agency.

Meanwhile, to listen to the Food Manufacture Group’s free one-hour webinar on ESOS, broadcast last year, click here.