Energy Company Obligation (ECO)

About 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 ECO3 scheme closed on 31 March 2022. The latest policy, ECO4, has yet to commence, however it applies to measures completed from 1 April 2022 and will cover a four year period until 31 March 2026.

Government are aiming to publish their response soon. You can see a summary of the changes made to the scheme in 2022 on the Department for Business, Energy and Industrial Strategy’s website.

You can also read more about the previous versions of ECO on our Overview of previous schemes page

What are the main obligations?

This ECO policy will be entirely formed from one obligation, the Home Heating Cost Reduction Obligation (HHCRO). Under HHCRO, obligated suppliers must mainly promote measures which improve the ability of low income, fuel poor and vulnerable households to heat their homes. This includes actions that result in heating savings, such as the installation of insulation or the upgrade of an inefficient heating system. The target is divided between suppliers based on each supplier’s relative share of the domestic gas and electricity market.

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

Progress towards meeting obligations

We publish monthly reports which give an overview of energy suppliers’ progress towards meeting their targets. The first monthly report for ECO4 will be published in late 2022.  We will retain reports from ECO3 until the first ECO4 reports are produced.

Our role in ECO

Ofgem administers the scheme on behalf of the Department for Energy, Business & Industrial Strategy. Our 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. 

Contacting the ECO team

Still got a question? Contact the ECO team, who’ll be happy to help.

How we engage

We believe that engaging with stakeholders when designing and delivering schemes brings real benefits and our forums are intended to gather contributions from a range of stakeholders on the main operational and delivery issues in ECO.

Click the button below to find out more about ECO forums and working groups. 

Find out more