Energy Company Obligation (ECO)

Energy Company Obligation (ECO) | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Energy Company Obligation (ECO) About ECO The Energy Company Obligation (ECO) is a government energy efficiency scheme in Great Britain designed to tackle fuel poverty and help reduce carbon emissions. The scheme has seen 4 iterations, ECO, ECO1, ECO2 and ECO3. A brief overview can be found at the bottom of this page. The ECO3 scheme closed on 31 March 2022 and the ECO4 Order came into force in July 2022. ECO4 applies to measures installed from 1 April 2022 and will run until 31 December 2026, following a nine-month extension. On Thursday 23 January 2025 the Department for Energy Security and Net Zero issued a statement about potential issues with ECO and GBIS installations . How does ECO work? The ECO scheme works by placing a Home Heating Cost Reduction Obligation (HHCRO) on medium and large energy suppliers. Under HHCRO, obligated suppliers must promote measures that improve the ability of low-income, fuel-poor and vulnerable households to heat their homes. This includes actions that result in reduced energy usage, such as installing insulation or upgrading a heating system. The overall target for these measures is divided between suppliers based on their relative share of the domestic gas and electricity market. Who is the scheme for? The ECO scheme supports energy efficiency measures in the home of those considered to be in fuel poverty. If you’re a homeowner or tenant you can find out more in the homeowners and tenants section . Also see our dedicated pages if you are an energy supplier , part of the supply chain , or a local authority . All guidance documents are available in the Contacts, guidance and resources section . Roles Government's role The Department for Energy Security and Net Zero set ECO4 policy and legislation. Ofgem's role We administer ECO4 on behalf of DESNZ. Our duties include: Calculating energy suppliers’ obligations and tracking performance against them processing supplier and delivery partner notifications of completed retrofits auditing suppliers and their notifications to minimise non-compliance evaluating and agreeing the outcomes of counter fraud investigations that suppliers have undertaken and progressing counter fraud activity where allegations of fraud have been made reporting on scheme progress to the Secretary of State of DESNZ TrustMark's role The quality assurance of retrofits to both technical and consumer protection standards is overseen by TrustMark , our ECO delivery partner and the government endorsed quality scheme for domestic retrofits. We use data shared by TrustMark to check compliance against scheme rules. How are Energy Suppliers performing against their targets? To view how energy suppliers are progressing towards meeting their targets for this obligation, we publish monthly reports . ECO scheme history Show all sections ECO1 Show The obligations were the Carbon Emissions Reduction Obligation (CERO), the Carbon Saving Community Obligation (CSCO) and the Home Heating Cost Reduction Obligation (HHCRO). CSCO also had a sub-obligation focused on rural areas (the CSCO rural sub-obligation). Under ECO1 suppliers were required to achieve an overall target of 12.4 Mt CO2 for CERO, 6 Mt CO2 for CSCO and £3.7billion for HHCRO. Suppliers achieved 18.33 Mt CO2 under CERO, 9.87 Mt CO2 under CSCO, including 1.79 Mt CO2 under the rural sub-obligation, and £5.16billion under HHCRO. ECO2 Show The next obligation period, known as ECO2, launched on 1 April 2015 and ended on 31 March 2017. Suppliers were required to achieve the following cost and carbon savings - 19.7 Mt CO2 under the Carbon Emissions Reduction Obligation (CERO), 6 Mt CO2 under the Carbon Saving Community Obligation (CSCO) and £6.46 billion under the Home Heating Cost Reduction Obligation (HHCRO). ECO2t Show The government extended the ECO2 policy until 30 September 2018 with a new period termed ECO2t. Energy suppliers were required to achieve 7.3 Mt CO2 for the Carbon Emissions Reduction Obligation (CERO) and £2.76 billion for the Home Heating Cost Reduction Obligation (HHCRO). The Carbon Saving Community Obligation (CSCO) target had to be achieved by 1 April 2017, while the CERO and the Home Heating Cost Reduction Obligation (HHCRO) targets had to be achieved before 1 October 2018. ECO3 Show ECO3 policy was entirely formed from one obligation, the Home Heating Cost Reduction Obligation (HHCRO). Under HHCRO, obligated suppliers would have mainly promoted measures that improve the ability of low-income, fuel-poor and vulnerable households to heat their homes. This included actions that resulted in heating savings, such as the replacement of a broken heating system or the upgrade of an inefficient heating system. The ECO3 Order commenced on 3 December 2018 and ran until 31 March 2022. The ECO (Amendment) Order 2019 came into force on 1 January 2020. The ECO3 Order overall target for the HHCRO was £8.253 billion in cost savings. The ECO3 final determination report provides details on overall scheme performance and our final determinations of energy suppliers’ achievement against their obligations. Close