2. Climate Change Policy Manager, Freight Transport Association
Rachael Dillon
Climate Change Policy Manager,
Freight Transport Association

3. ESOS – countdown to 05 December, 2015

4. Agenda What’s ESOS? Policy landscape Main requirements
Role of Lead Assessor
Link with LCRS
FTA ESOS Transport Audit
Take action now!

5. What’s ESOS? UK response to EU Energy Efficiency Directive
All large enterprises must conduct energy audits every four years covering buildings and transport, with the first taking place by 5 December 2015
Includes freight – where company purchases the fuel

6. Policy landscape Expected to cover over 10,000 UK organisations
Adopting energy efficiency measures could deliver £2.8 billion savings a year
Seen as relatively light touch to deliver energy savings
BUT crowded area – CRC, Mandatory GHG reporting
Concern over availability of auditors and rush to meet first deadline
Lack of clarity on audit detail
DECC confident demand will be met

7. Who’s in scope? Companies in scope….
More than 250 employees in the UK or
Fewer than 250 employees but….
An annual turnover exceeding €50m (£39m)and
A balance sheet exceeding €43m (£33.5m)
Public sector exempt
Don’t forget subsidiaries A
50 employees B C
300 employees
Example 1
A is the parent of B and C. Together they form a corporate group together
C qualifies as a large undertaking for the purposes of ESOS
Because A and B are in the same corporate group as C, which is large,
they must both also comply with ESOS
Example 2
A does not qualify for ESOS because it is not an undertaking in the UK
C qualifies as large undertaking for ESOS. Because B and C are in the same corporate
group, by virtue of A being the parent, they must comply with ESOS
Highest parent expected to take lead responsibility – you can take part separately as a subsidiary but you have to advise EA

8. How does ESOS work? Measure energy use (12 months)
Appoint Lead Assessor
Identify energy efficiency and energy management opportunities
Store data and notify scheme administrator
Implement savings and further disclosure in annual report
Mandatory
Voluntary

9. How does ESOS work?
90% of energy usage must be covered (de minimis rule)
Companies required to appoint ESOS lead assessor to review and sign off audit
Minimise cost by using in-house experts, using existing audits and schemes e.g. LCRS, CCAs, CRC, Mandatory GHG reporting
ESOS lead assessor must be on a register with Professional Body that is approved by the Environment Agency e.g. Energy Institute
ISO meets requirements
There are 15 registers

10. Transport – new area for audit
First time that transport has come into scope of legislation
Transport will be fundamental part of some companies’ ESOS audits
LCRS identified by DECC as a way to compile
transport data for ESOS in Government best
practice guidance
Roadshow views
Assessing scope of de minimis use is seen as a challenge
Transport – ESOS might prompt them to develop new methodologies and practices

11. Transport specific requirements
In scope
Outside of scope
Purchased fuel for hgvs/vans
Company cars
Grey fleet where company pays employee for using their vehicle on business
UK part of international road journeys, though the entire journey can be covered
For rail, aviation and shipping operators:
Purchased fuel for trains, aircrafts and ships
Fuel purchased either in the UK or overseas for all journeys that start and/or end in the UK, though the entire journey can be covered
Any transport services that are sub-contracted to others (ie the company does not purchase the fuel for journeys)
Personal use of company cars
Staff commuting
Train trips and flights - as no control over fuel for these journeys

12. Role of Lead Assessor
As a minimum, ESOS Lead Assessor must approve and sign off company audit
PAS 51215
In reality, may need more than one….
Use in-house expert – suitably qualified
Company is liable for non-compliance
Roadshow
Lot of compliance work could be done internally without significant technical knowledge and before appointing a lead assessor
A lead assessor must review your ESOS assessment before it is submitted to EA, there is no requirement that the lead assessor must be the same throughout your assessment process
For in-house, must have a final assessment approved by at least 2 board level directors
Government expectation that an Assessor can specialise across buildings and transport

13. FTA ESOS Offering
LCRS recommended in DECC best practice guidance to help compile data for ESOS and take action to reduce energy in transport.
FTA consultancy can help identify a plan of action and the best steps to meeting ESOS requirements
FTA has a team of assessors that can provide specialised freight transport audits to ensure you meet compliance with ESOS
FTA accredited ESOS Lead Assessors
Working with buildings energy consultants

14. The audit No defined methodology BS EN-16247 known industry standard
Lead Assessors would expect to assess
Fuel consumption/efficiency
Driver fuel performance/training
Routing and scheduling
Tyre management
Aerodynamic improvements
Reduction of empty running

15. Site visits
Number of site visits should be sufficient for Lead Assessor’s audit to be complete and accurate
Use sampling approach – identify types of site and visit one in each group
Retain justification for why you did this

16. Prepare evidence pack Director sign off Details of Lead Assessor
Total energy consumption
De minimis allocation
Routes to compliance
Audit approach
Hold on file

17. Notify Environment Agency
Note Scottish Environment Protection Agency, Northern Ireland Environment Agency and Natural Resources Wales responsible for regulating ESOS in their respective devolved regions e.g. checking compliance and taking enforcement action where applicable

18. Take action now! 5 December is a Saturday! So 4 December
207 days to go
Comply and explain
Reasonable estimates for first phase can be made if actual data is unavailable
Penalties of up to £50,000 for failure to meet ESOS requirements
Non-compliance could be made public

19. And remember it starts again
Phase
Qualification date:
Four-year compliance phase:
Compliance date:
Phase 1
31 Dec 2014
6 Dec 2011 – 5 Dec 2015
5 Dec 2015
Phase 2
31 Dec 2018
6 Dec 2015 – 5 Dec 2019
5 Dec 2019
Phase 3
31 Dec 2022
6 Dec 2019 – 5 Dec 2023
5 Dec 2023
Compliance briefing note in delegate pack
FTA ESOS offering
Contact –

20. Logistics Carbon Reduction Conference 2015