ESOS Phase 3 vs Phase 4 — what changed

The Phase 4 guidance landed on 30 July 2026

The Environment Agency published Comply with the Energy Savings Opportunity Scheme (ESOS) phase 4 on 30 July 2026.

It implements the Energy Savings Opportunity Scheme (Amendment) Regulations 2026 (SI 2026/701) — made 23 June 2026, laid before Parliament 1 July 2026, and in force from 22 July 2026.

That is the single most important thing on this page: the Phase 4 rules are published law and published guidance, not an expectation.

Phase 4’s changes therefore come from SI 2026/701, not from the ESOS (Amendment) Regulations 2023 (SI 2023/1182), which amended the original ESOS Regulations 2014 (SI 2014/1643) for Phase 3.

Two changes routinely described as Phase 4 changes were in fact Phase 3 changes under SI 2023/1182: the mandatory action plan, and the reduction of the de minimis from 10% to 5% that set audit coverage at 95%.

Both carry forward into Phase 4 unaltered.

The DESNZ energy audit guidance remains useful background on how an audit is conducted, but the operative document for Phase 4 is the Environment Agency’s How to comply with ESOS phase 4.

Timeline and deadline changes

Phase 3 ran from 6 December 2019 to 5 December 2023, but the compliance deadline was extended to 5 June 2024 due to delays in the scheme from the 2023 consultation process.

The Phase 3 action plan was separately due by 5 March 2025 (extended from 5 December 2024).

Phase 4 runs from 6 December 2023 to 5 December 2027, which is the compliance date on which the notification of compliance is due through MESOS.

The action plan follows on 5 December 2028, covering 6 December 2027 to 5 December 2031, and progress updates fall on 5 December 2029, 5 December 2030 and 5 December 2031.

One Phase 3 date is still live: the second progress update on Phase 3 action plans is due on 5 December 2026.

The qualification date for determining Phase 4 scope is 31 December 2026 — a single point-in-time test.

Organisations that qualified for Phase 3 should not assume they automatically qualify for Phase 4; the qualification test must be re-run using 31 December 2026 figures.

The three new Phase 4 duties

Beyond removing the DEC and GDA routes, SI 2026/701 adds three duties that did not exist in Phase 3.

They are the substance of what changed, and they are the part most commentary still misses.

1. Report the savings you actually achieved

The ESOS report and the notification of compliance must state the energy savings achieved during the compliance period.

That means the measures implemented, the saving from each measure in kWh, and each measure’s energy-saving category, per the Environment Agency Phase 4 guidance.

Only the combined saving across all measures is published — per-measure savings are withheld as potentially commercially sensitive.

2. The action plan review

The ESOS report and notification of compliance must identify the proposed measures from the previous action plan that were not implemented, and explain why.

These submissions are not published, whereas action plans and progress updates are.

3. A third progress update

Phase 4 carries three progress updates rather than two — 5 December 2029, 5 December 2030 and 5 December 2031.

The final one is added by regulation 28 of SI 2026/701, which amends regulation 34B to require a final progress update for compliance periods ending on or after 5 December 2027.

Smaller changes worth knowing

• New regulation 33A — an organisation with zero energy consumption need not carry out an ESOS assessment or appoint a lead assessor, but must still submit a notification of compliance
• No lead assessor is required where total energy consumption is below 40,000 kWh, or where ISO 50001 covers total or significant consumption
• The insolvency exclusion is widened — undertakings in insolvency proceedings at any point between the qualification date and the compliance date are excluded, as are group undertakings of an insolvent large undertaking unless another large undertaking in the group is solvent
• The 12-month reference period must be twelve consecutive months that include 31 December 2026 and end before 5 December 2027, using verifiable data where reasonably practicable
• The qualification thresholds are unchanged; ESOS and SECR threshold alignment remains deferred to Phase 5

Audit coverage: a Phase 3 change, not a Phase 4 one

Audit coverage in Phase 4 is at least 95% of total energy consumption, with up to 5% excluded as de minimis.

That is unchanged from Phase 3.

The reduction of the de minimis from 10% to 5% was made by SI 2023/1182 and applied to Phase 3 compliance, so an organisation that complied with Phase 3 has already audited to the 95% line.

Describing it as a Phase 4 change is a common error, and it matters because it displaces attention from what genuinely is new.

The Phase 4 guidance defines significant energy consumption as the areas comprising at least 95% of total energy consumption.

Organisations with large distributed property portfolios or complex transport fleets still carry the most work here, because the 5% exclusion is measured against the whole, not site by site.

DEC and GDA compliance routes removed

Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) are not ESOS compliance routes in Phase 4 — regulation 26 of SI 2026/701 omits regulation 34 of the 2014 Regulations, the provision that carried them.

The Environment Agency’s stated reason is that they “provide more limited and less tailored recommendations than an ESOS energy audit”.

This affects organisations that used these routes in Phases 1, 2, or 3 to cover part or all of their energy consumption.

DECs were commonly used by organisations with large portfolios of public-sector or commercial buildings where DECs were already required under building energy performance regulations.

GDAs were used by organisations that had undergone Green Deal assessments for their properties.

Both routes are now invalid for Phase 4.

• Existing DECs cannot be used as ESOS Phase 4 compliance evidence, even if they remain within their validity period
• GDA evidence from Phase 3 cannot satisfy Phase 4 audit requirements as standalone compliance
• DEC and GDA data may still feed an ESOS report — an intensity ratio, for instance — but cannot substitute for the audit
• Organisations that relied exclusively on DECs or GDAs for Phase 3 must now commission a full ESOS audit or obtain ISO 50001 certification

Action plans and the three progress updates

Action plans were introduced as a new ESOS requirement in Phase 3 by SI 2023/1182.

The Phase 3 action plan (covering what energy efficiency measures the organisation committed to implementing) was due by 5 March 2025 — after the Phase 3 compliance notification deadline.

The Phase 4 action plan is due on 5 December 2028, one year after the compliance date, and it covers 6 December 2027 to 5 December 2031 per the Environment Agency Phase 4 guidance.

The action plan, the ESOS assessment and every progress update need sign-off by one or more directors, or equivalent, and are submitted through MESOS.

Progress updates are not annual: there are three, on 5 December 2029, 5 December 2030 and 5 December 2031.

The third is new for Phase 4, added by regulation 28 of SI 2026/701.

The action plan review, and reporting savings achieved

Under SI 2026/701, the ESOS report and the notification of compliance must identify the proposed measures from the previous action plan that were not implemented, and explain why.

Alongside it sits the achieved-savings duty: the measures that were implemented, the saving from each in kWh, and each measure’s energy-saving category.

Only the combined saving across all measures is published; the per-measure figures are withheld as potentially commercially sensitive.

Together these create accountability continuity between phases — a four-yearly audit can no longer be completed in isolation from the last one.

Starting the review early, while the records are still accessible, is materially easier than reconstructing them close to the 2027 date.

Organisations that did not create clear Phase 3 action plans (or where the plans were not well documented) will face challenges in meeting the Phase 3 progress reporting requirement.

The retrospective nature of this requirement underlines the importance of maintaining good records of ESOS compliance activity across phases.

Mandatory report sharing with subsidiaries

Under SI 2023/1182, the responsible undertaking for group ESOS compliance must share relevant information from the ESOS report with all subsidiary members of the qualifying corporate group.

The Phase 4 compliance notification must confirm that this sharing has occurred.

This is an administrative addition to the group compliance framework.

It does not require subsidiaries to produce separate ESOS reports or submit their own notifications.

However, the parent must formally distribute the group ESOS assessment to all UK subsidiaries — a step that was not mandatory in Phase 3.

For complex groups with many subsidiaries, the distribution process should be planned as part of the overall Phase 4 compliance programme to ensure it does not delay notification submission.

ISO 50001 route — what changed

ISO 50001 certification remains a valid ESOS compliance route in Phase 4, and it does more work in Phase 4 than a summary of it as an “alternative route” suggests.

Where certification covers a participant’s total OR significant energy consumption — significant being the areas comprising at least 95% of the total — the participant is deemed to have complied with the duties to appoint a lead assessor, carry out an ESOS energy audit and produce an ESOS report, per the Phase 4 guidance.

A notification of compliance is still required.

It does not have to cover 100% of energy use — that formulation is wrong and it has circulated widely.

Where certification covers only part of consumption, the exemption applies only to the certified portion: the remainder must be audited and a lead assessor appointed.

Organisations with ISO 50001 certification that covers buildings only (a common configuration) will need to either extend their ISO 50001 boundary to include transport and processes, or commission a complementary ESOS energy audit for those energy streams.

See the ISO 50001 ESOS compliance guide for detailed guidance on the Phase 4 requirements.

Net zero assessment — deferred to Phase 5

The government had proposed including a mandatory net zero assessment element in Phase 4 ESOS audits.

This would have required organisations to assess their long-term decarbonisation pathway alongside the standard energy efficiency audit.

Following the government consultation, the net zero requirement was deferred to Phase 5.

Net zero assessment is therefore voluntary for Phase 4, and SI 2026/701 did not introduce it.

Organisations can choose to include net zero assessment in their Phase 4 ESOS audit as a voluntary element, and the government developed PAS 51215 as a supporting standard for net zero assessment in ESOS contexts.

However, inclusion is not required for Phase 4 compliance.

The net zero refocus remains deferred to Phase 5 rather than settled, so organisations that invest in voluntary net zero assessment in Phase 4 are simply better placed if it arrives.

For organisations already developing transition plans under UK SRS S2, integrating ESOS net zero assessment with the UK SRS transition planning process creates efficiency.

Lead assessor requirement changes

The ESOS energy audit route requires a lead assessor drawn from an approved register, per the Phase 4 guidance.

Phase 4 adds two cases where no lead assessor is needed at all: where total energy consumption is below 40,000 kWh, and where ISO 50001 certification covers total or significant consumption.

A third case sits alongside them — new regulation 33A, under which an organisation with zero energy consumption carries out no ESOS assessment and appoints no lead assessor, but still submits a notification of compliance.

Approved lead assessor registers are maintained by the Chartered Institution of Building Services Engineers (CIBSE) and the Energy Institute (EI).

Organisations should verify that their chosen lead assessor's accreditation is current on the relevant register before commissioning Phase 4 work.

An audit signed off by a non-accredited or lapsed-accreditation assessor will not satisfy ESOS compliance requirements.

Full comparison table: Phase 3 vs Phase 4

Every Phase 4 entry below is drawn from the Environment Agency Phase 4 guidance published on 30 July 2026 or from SI 2026/701 itself.

This is a comparison of two published regimes, not a forecast.

Frequently asked questions