Energy Company Obligation

The Energy Company Obligation (ECO) is a British Government programme. It is designed to offset emissions created by energy company power stations. The first obligation period ran from 1 January 2013 to 31 March 2015. The second obligation period, known as ECO2, ran from 1 April 2015 to 31 March 2017. The third obligation period, known as ECO3, ran from 3 December 2018 until 31 March 2022. The fourth iteration, ECO4, commenced on 1 April 2022 and will run until 31 March 2026.

The Government requires the larger energy suppliers to help lower-income households improve their energy efficiency.

ECO is the replacement of two previous schemes, the Carbon Emission Reduction Target (CERT) and the Community Energy Saving Programme (CESP). The programme focused on heating, in particular improving insulation.

Ofgem has been appointed the scheme administrator on behalf of the Department for Energy Security & Net Zero.

The scheme has been plagued by poor workmanship in the installation of external wall insulation, leading to damp and mouldy homes, a report by the National Audit Office and a parliamentary investigation.

It was announced at the November 2025 United Kingdom budget that ECO would close on 31 March 2026.

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