Last reviewed 11 February 2016

The Environment Agency announced recently that as many as 3000 organisations may have missed the deadline for mandatory compliance with the Energy Savings Opportunity Scheme (ESOS). The Department for Business, Innovation and Skills has also announced that it is changing the definition for waste electrical and electronic equipment (WEEE) from January 2016, to bring the UK more in line with the EU WEEE Directive. John Barwise explains the latest on ESOS and WEEE and how the changes are likely to affect UK businesses.

Energy saving opportunity scheme (ESOS)

The story so far

ESOS is a mandatory UK energy assessment scheme established to implement EU Energy Efficiency Directive (2013/27/EU), which requires Member States to introduce a programme of regular energy audits for large organisations. The Energy Savings Opportunity Scheme Regulations 2014 give effect to the scheme.

ESOS requires large organisations that have over 250 members of staff or a turnover of over €50 million to carry out energy assessments every 4 years. The assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures. The Environment Agency (EA) is the UK scheme administrator. SMEs and some public sector bodies are not mandated under the scheme.

The Department of Energy and Climate Change (DECC) estimates the scheme could lead to £1.6 billion net benefits to the UK economy between 2015 and 2030, with significant cost savings and potential carbon emissions reductions for large businesses as a result of energy savings. DECC’s estimate is based on only 6% by value of potential energy savings. Analysis by the Carbon Trust suggests the potential savings on energy bills could be two or three times higher.

Around 6000 organisations eligible under ESOS have notified their compliance with the EA and a further 1000 businesses completed their “notifications of intent” to comply. An estimated 3000 failed to meet compliance requirements by the 29 January deadline and the EA has given notice that it will start to issue civil penalties for “the most serious cases” in February 2016.

Those organisations that have missed the ESOS compliance deadline, but are proceeding with the ESOS assessment should notify the EA.

Environment Agency ESOS guidance

The EA is the ESOS administrator and has produced guidance, in association with the other UK environment agencies. Complying with the Energy Savings Opportunity Scheme explains the qualification thresholds for various public and private sector organisations that may qualify under the ESOS scheme, including corporate groupings and joint venture organisations. For those that do qualify under the scheme, the EA has also set out a timetable of the compliance periods and associated qualification dates and compliance dates. Circumstances where the status of a qualifying organisation changes, for example, where the thresholds change, are also covered.

The EA ESOS compliance guidance provides in depth coverage of how to undertake an ESOS assessment. It mentions ISO 50001 Energy Management System (see below), but it also goes into considerable detail of what the ESOS assessment entails, including what energy consumption must be measured and how energy is defied (including combustibles).

The guide covers buildings, installations (including CHP), transport and construction and explains types of energy that are not in the scope of ESOS, including supplies to third parties, etc. Energy auditing is covered in detail with a number of recommendations for identifying energy saving opportunities.

ISO 50001 – Energy Management Systems

Organisations that have a certified ISO 50001 energy management system in place that covers all their energy use (for the whole corporate group in the UK), can use this as a direct route to ESOS compliance. Changes in an organisation’s assets or activities during the compliance period and ISO certification period would not prompt a requirement for recertification for continuing compliance with ESOS “provided the newly acquired assets/undertakings/activities are within the scope of the certification”, according to the EA. Also, compliant organisations do not need to calculate total energy consumption and do not require a lead assessor to comply with ESOS.

According to the EA, however, organisations still need to:

  • get a board level director to confirm that they have reviewed findings of your ISO 50001 certification, the organisation is compliant and the information which is going to be entered in the notification is correct

  • make a notification to the Environment Agency (via the online notification available on the ESOS notification webpage to specify that this is how you are compliant with ESOS.

A comprehensive list of ISO 50001 accredited certification bodies is available from the UK Accreditation Service (UKAS).

DECC has also produced a comprehensive guide to implementing energy efficiency saving opportunities for organisations that have completed an ESOS assessment and want to take advantage of opportunities to reduce energy consumption, identified through ESOS. According to the guide, businesses can reduce annual energy costs by 20% through improving energy efficiency and energy management.

The Guide sets out a step-by-step approach to implementing energy savings, including how to prioritise energy saving opportunities, building the business case, convincing decision-makers of the benefits, how to implement actions and how to monitor and verify progress.

The DECC guide also provides useful information on typical implementation times for various technological investments typical for most organisations, such as motors and compressors, lighting, heating, ventilating and air conditioning (HVAC) and renewable energy. The focus on investments is important because of the potential upfront costs involved. The guide sets out a number of key considerations such as payback periods, life-cycle costs, discount cash flows, net present values and internal rate of return. The guide also lists a number of additional contacts for support and guidance for more specific industry sector interests.

Contact the EA ESOS help desk to find out more about complying with ESOS at ESOS@environment-agency.gov.uk.

Waste electrical and electronic equipment (WEEE)

Overview

UK WEEE Regulations originally started in 2007. Following a recast of the EU Directive in 2012, new amended Regulations came into force in the UK in January 2014.

Guidance published by BIS, in accordance with the regulation, is intended primarily for use by businesses, public and third sector organisations and individuals involved in the sale, purchase and disposal of electrical and electronic equipment (EEE). The EA in England, Wales, Scotland and Northern Ireland enforce the regulations related to producers, producer compliance schemes and treatment facilities.

Growing demand for EEE means that WEEE is the fastest growing waste stream globally, increasing at a rate of 3–5% by weight every year. The UK produces around 2 million tonnes of WEEE annually, discarded by businesses and households.

WEEE contains high value elements including silver, palladium and rare earth elements, which although in low concentrations, are becoming increasing economical to recycle. WEEE also contains hazardous elements such as arsenic, mercury, cadmium and lead, which damage the environment and can lead to harmful health effects.

New WEEE targets

From 2016, EU recast regulations require 45 tonnes of WEEE to be recovered for every 100 tonnes of EEE that goes on sale, rising to 65 tonnes from 2019. The EA has published guidance on the scope of equipment covered by UK WEEE and the controls that apply to businesses.

Duty of Care

All businesses have a legal “Duty of Care” responsibility to ensure that the waste they produce is dealt with in accordance with waste regulations. This duty extends to how WEEE is stored, transported and disposed. Business can fulfil their Duty of Care by using licensed and authorised WEEE waste contractor and documenting the process through Waste Transfer Notices. Collectors of waste need a Waste Carriers Licence, and WEEE recycling, treatment and disposal facilities need to be registered as an Approved Authorised Treatment Facility (AATF).

There are 14 categories of WEEE affecting household and non-household consumers, including white goods, electronic equipment such as computers, TVs and monitors, monitoring equipment, cooling equipment and lighting. Some WEEE contains hazardous substances and is treated differently — details are available from the Health and Safety Executive.

What’s new

BIS has announced that the definition of household and non-household WEEE is to be amended from 2016, to accommodate “dual use” items such as PCs, which can be used by consumers and businesses. The change brings the UK more in line with EU Regulations definitions.

Producers placing EEE on the market must now report “dual use” EEE as business to consumer (B2C) EEE. Producers are those that manufacture and sell EEE or resell EEE produced by other suppliers. B2C produces must register with a compliance scheme or as a compliance scheme and provide data, and must meet the costs of transporting, treating and recycling a share of all WEEE in one of the relevant 14 WEEE categories.

EEE distributors are retailers and wholesalers, as classified under WEEE Regulations. B2C distributors/retailers has obligations to take back WEEE from purchasers and return it to a compliance scheme system, or gain exemptions by joining a joint Distributor Take Back scheme (DTS).

Guidance on the revised classification of B2C WEEE is available.