Energy Company Obligation Scheme

What is ECO?

The Energy Company Obligation (ECO) is a government energy efficiency scheme in Great Britain to help reduce carbon emissions and tackle fuel poverty.

The scheme began in April 2013, and over time it has been amended. The latest changes to the scheme occurred in 2017, and apply to measures installed from 1 April 2017. Ofgem have termed the latest version of the scheme as ECO2t.

You can see a summary of the changes made to the scheme in 2017 on the Department for Business, Energy and Industrial Strategy’s website.

You can also read more about the previous versions of ECO on the Ofgem website.

What are the main obligations?

1. Carbon Emissions Reduction Obligation (CERO)Under CERO, obligated suppliers must promote ‘primary measures’, including roof and wall insulation and connections to district heating systems. Some CERO must also be delivered in rural areas.

2. Home Heating Cost Reduction Obligation (HHCRO)Under HHCRO, obligated suppliers must promote measures which improve the ability of low income and vulnerable household to heat their homes. This includes actions that result in heating savings, such as the replacement or repair of a boiler.

Under ECO2, which ran from April 2015 to March 2017, suppliers also delivered against a further obligation called the Carbon Saving Community Obligation (CSCO). Suppliers were required to meet their CSCO targets by 31 March 2017. Ofgem will publish a report outlining suppliers’ achievements against these targets.

Find out more in the support for improving your home section of the Ofgem website.

Progress towards meeting obligations

Ofgem publishes monthly reports which give an overview of energy suppliers’ progress towards meeting their targets. Ofgem & their role in ECO

Ofgem administers the scheme on behalf of the Department for Energy, Business & Industrial Strategy. Their duties include:

  • Allocating a proportion of targets to obligated suppliers

  • Monitoring supplier progress and deciding whether they’ve achieved their obligations

  • Reporting to the Secretary of State

  • Auditing, ensuring compliance and preventing and detecting fraud.

BEIS sets the overall policy for the scheme.


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