There are several grey areas for businesses when it comes to ESOS. Transport is one of them, given that it definitely uses energy – but is off-site by definition. In this post, we’ll clear things up when it comes to ESOS and transport.
To get a better idea of what’s required for ESOS, here’s a rundown of the obligations for eligible businesses:
In short, yes it does. The second point on that list explains that activities involving company assets need to be taken into account. In other words, energy used by company vehicles contributes to your total. That’s reiterated by the government’s guidance, which explains that these audits cover energy used by “buildings, industrial processes and transport”.
No particular fuel type is exempt from ESOS. However, you don’t need to include transport from procured services that include indirect payment for fuel consumption. So, an outsourced delivery service or freight carrier would be classed as a separate entity rather than counting towards your company assets or activities.
The scope of ESOS transport is broader than many organisations initially assume. The assessment must cover energy used by all owned and leased vehicles used for business purposes, including HGVs, vans and company cars. But it doesn't stop there.
Grey fleet vehicles also fall within scope. Grey fleet refers to employees using their own privately owned or personally leased vehicles for business travel, where the organisation reimburses them for mileage. If your business pays employees a mileage rate for business journeys, that fuel consumption needs to be factored into your ESOS assessment.
There is one important threshold to be aware of. Transport only needs to be included in your ESOS assessment where fuel supplied for business use represents 10% or more of your organisation's total energy consumption. If transport accounts for less than this, it may fall outside the requirement. Of course, it’s still best practice to capture the data. A qualified ESOS lead assessor can confirm whether your transport energy use meets the threshold.
Grey fleet is consistently the most difficult area of transport to report on accurately. Unlike company vehicles, where fuel card records or telematics data can provide reliable figures, grey fleet mileage is typically self-reported by employees. This creates gaps and inconsistencies that can complicate the assessment.
If accurate data isn't available, the government does allow for reasonable estimates. That’s provided they are based on verifiable information and the methodology is documented in your evidence pack. Using an average vehicle emission factor alongside total reimbursed business mileage is a common approach. However, the more accurate your underlying data, the more defensible your assessment will be.
Organisations that don't currently track grey fleet mileage in any structured way should treat an ESOS assessment as an opportunity to put a process in place. It not only supports compliance but often reveals potential savings. That could be reducing unnecessary business journeys or shifting to more efficient vehicles, which can make a measurable difference to fuel costs.
The next question is how you figure out what to include for transport on your ESOS assessment. It’s a little trickier than checking your electricity or gas usage, but it’s not impossible. If you don’t have actual usage data, the government allows for reasonable estimations as long as they’re based on verifiable information.
One example of this would be using expenditure data. To do so, you’d need to use the government’s standard conversion factors for company reporting or another reputable source of conversion factors. That allows you to convert expensed mileage into energy use.
If you’re including estimates for transport in your ESOS assessment, make sure you document the reason for using estimates, methods used, and the required proof of figures in your evidence pack.
Here’s a hypothetical example to demonstrate how it works:
Transport is an important part of your ESOS audit. But as you can see above, things can get a little complicated. It’s much easier and more assuring to leave it to the experts. At Volta Compliance, we have a wealth of experience helping companies throughout Yorkshire with every step of the ESOS process.
From auditing transport and other energy usage to planning and implementing changes to reduce your output, we’ll make sure you’re fully compliant and as energy efficient as possible going forward. Call us on 0113 436 0402 or email info@voltacompliance.com to get started.
