Are you prepared for the changes coming in energy regulations by March 2025?
With the UK pushing for Net Zero, businesses are under pressure to meet energy-saving goals while balancing costs.
Recently, the government extended the ESOS deadline, giving companies more time to prepare Energy Savings Action Plans. These plans need measurable targets to track energy reductions over 12 months.
Interestingly, over 75% of businesses are still struggling to meet these new energy standards. While this extra time helps, there’s still a lot of work ahead. Re-designing supply chains is one of the most practical ways to achieve energy savings without overspending.
With that said, let’s dive in to see how you can get started today.
The UK’s Net Zero Challenge: Balancing Ambition with Practicality
In the UK, achieving Net Zero by 2050 is an overarching goal that has been reinforced by several legislative measures and government-led initiatives. However, the path to reaching this goal is not without its challenges.
Recent debates over electric vehicle (EV) adoption and the feasibility of phasing out internal combustion engine (ICE) vehicles highlight the conflict between long-term sustainability goals and short-term financial implications for both consumers and businesses.
The costs involved in making changes, whether installing solar panels, adopting electric fleets, or retrofitting facilities, can seem overwhelming, particularly for companies that are still recovering from the financial impact of the pandemic.
The Current Scenario
- Adoption of EVs and ICE Phase-Out: Many businesses and individuals are hesitant to switch to electric vehicles due to the higher upfront costs, despite the lower operational expenses over the long term.
- Legislative Push and Pull: The UK government continues to push forward with ambitious climate goals, but the frequent changes to deadlines and guidelines suggest a degree of uncertainty that makes companies hesitant to make large investments.
While these concerns are valid, the reality is that the cost of inaction, both financially and environmentally, will far exceed the cost of proactive changes in the years to come.
The government’s extension of the ESOS deadline for compliance offers an opportunity for companies to rethink their strategies and make the most out of this additional preparation time.
Quick Link: Can Carbon Emission Offset Optimization Propel the Supply Chain Towards Carbon Neutrality?
ESOS Deadline Extension: What It Means for Businesses
This past summer, the UK government extended the ESOS deadline for companies over certain thresholds – 250 employees or a turnover of £44 million. These companies now need to deliver an ‘Action Plan’ that outlines how they propose to achieve energy savings in a structured, measurable manner by March 5, 2025.
This extension offers businesses a temporary reprieve, but it also means that the clock is ticking for those who have not yet started their compliance journey.
These Energy Savings Action Plans must include:
- Measurable targets that demonstrate real progress over a 12-month period.
- Specific strategies for how energy consumption can be minimized in a practical and realistic way.
However, while it’s possible that this deadline could be further extended, businesses should not rely on this happening. Instead, being proactive in creating a solid plan could yield benefits well beyond regulatory compliance, such as reduced costs, operational efficiency, and a stronger public image.
The Key Question: If the deadline isn’t extended again, what can you do now to put a compliant and impactful action plan in place?
The Importance of Supply Chain Redesign in Energy Savings
One of the areas with substantial potential for energy savings lies in re-evaluating supply chains. Transportation and logistics often make up a significant portion of a company’s energy expenditure, and a strategic overhaul can yield considerable benefits.
Assessing and Optimizing Your Transport Network
Sophus specializes in supporting companies to re-design their supply chain, focusing on achieving energy and cost savings.
While we do not advise on energy generation, like solar or wind power installations, we can provide valuable insights into the costs associated with your transport network. Through a strategic analysis of your logistics, companies can often identify opportunities for both energy savings and cost reductions.
How Does It Work?
Sophus offers a unique toolset, including rapid baselining technology. This feature allows historic data regarding your transportation network to be uploaded, mapped, and analyzed for its carbon footprint – all in a very short period.
With this baseline established, you can then experiment with different scenarios, such as:
- Optimize the mode of transportation(e.g., moving from road to rail, moving from LTL to FTL).
- Exploring different network structures (e.g., optimizing warehouse locations).
- Assessing other working methods (e.g., consolidation of routes)
- Optimize production plan (e.g. allocating production or sourcing to more carbon emission positive facilities while lowering costs).
Each of these scenarios can be evaluated not only for cost implications but also for their impact on your company’s carbon emissions. This provides businesses with a powerful way to visualize the effects of potential changes and to prioritize interventions that yield the greatest impact on both fronts.
Example: Optimizing Logistics to Reduce Energy Use
Consider a typical mid-sized logistics company that primarily uses trucks to transport goods across the country. By analyzing the energy consumption of their transport network, they may find that certain routes are inefficient, leading to wasted fuel.
By adopting Sophus’ approach:
- The company could establish a carbon cost benchmark by uploading historical data.
- Potential network improvements, such as using more direct routes, could be simulated.
- Alternate transport modes, such as different sizes of trucks, Electric Trucks or using rail, river could be evaluated.
As a result, the business could not only improve its compliance status but also achieve meaningful cost savings while demonstrating a strong commitment to sustainability.
Beyond Compliance: The Broader Benefits of Proactive Energy Planning
Creating an Energy Savings Action Plan is more than just a regulatory obligation. Done well, it can set your company apart by showing customers, investors, and regulators that you are committed to making a positive difference.
This commitment to energy efficiency can enhance brand loyalty, attract potential partners, and even make your business more competitive as clients increasingly prefer working with sustainable companies.
Key Benefits Include:
- Cost Reduction: Optimized logistics can lead to lower transportation costs and better overall resource management.
- Improved Operational Efficiency: Identifying inefficiencies through rapid baselining can enhance day-to-day operations, leading to quicker deliveries and better service quality.
- Environmental Impact: Meeting and exceeding ESOS requirements helps reduce your company’s overall carbon footprint, contributing positively to broader environmental goals.
You can also refer to our case studies here.
Start Planning Today with Sophus
If you’re looking to get ahead of the March 2025 deadline and create a robust Energy Savings Action Plan, we can help. Sophus provides the tools and expertise to support your energy savings journey, especially in redesigning your supply chain to minimize costs and maximize efficiency.
Don’t wait until the deadline is around the corner. Reach out to us today to start planning for a sustainable, cost-effective future. Together, we can make energy savings a reachable goal for your business.
