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99% of large UK businesses risking EU energy fines

17 September 2015

A recent Freedom of Information request from environmental solutions provider Veolia to the Environment Agency has revealed that only 150 companies out of 10,000 has submitted their audits as part of ESOS, risking huge fines ahead of the deadline on 5 December 2015

ESOS is the UK response to the EU’s Energy Efficiency Directive that requires large organisations to complete an energy audit every four years. 
 
The scheme is aimed at helping large organisations better understand their energy use so they save money and reduce the UK’s carbon footprint.
 
Companies that fail to complete their audits by 5 December face a basic fine of £50,000, plus £800 a day capped at a maximum of 80 days.
 
To raise awareness of the scheme and risk of potential fines for non-compliance the Environment Agency has spoken at events and on webinars and provided a guidance and helpdesk service since June 2014.
 
It has also sent two letters to directors of over 14,000 individual entities that it believes are likely to be large undertakings themselves (and hence the rest of their corporate groups will be in the scheme too).
 
Pat Gilroy, Chief Operating Officer of Industrial Customers Veolia UK, which is helping companies carry out ESOS audits, said:
 
“The fines are very big, but the intent of the scheme should benefit all. Even with the push to inform businesses it seems almost impossible that thousands of businesses will have their audits in on time.
 
“Part of the problem is that there is a colossal shortfall in the number of qualified auditors – an issue that is likely to get worse as the deadline approaches.
 
“Not only are these companies risking fines, they are also missing out on the chance to reduce overheads by cutting their energy bills. I urge companies to pay attention to this warning and arrange their audits today to help save precious resources and improve carbon performance.”
 
Veolia, the environmental services provider, is already helping many companies avoid the fines by carrying out ESOS assessments examining energy use for buildings, transport and industrial/commercial processes. The scheme affects large organisations employing either 250 people or over and/or with an annual turnover in excess of €50m (£39m) and an annual balance sheet in excess of over €43m euros (£33m).
 
These organisations not only become compliant with the legislation and avoid the financial penalties, but can also benefit from innovative energy saving measures which are able to reduce energy bills in excess of 10-15% as well as cutting carbon emissions.
 
Overall, Veolia is estimating that up to 10,000 unsuspecting UK companies could be heading for total fines of over £900m if they fail to comply with the scheme.


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