Consultation outcome

Climate Change Agreements: Discussion Paper on the Target Review 2016 and Buy-out Price Review

From:: Department for Business, Energy & Industrial Strategy
Published: 5 August 2016
Last updated: 9 December 2016 — See all updates

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Government Response: Discussion Paper on the Target Review 2016 and Buy-out Price Review

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Detail of outcome

The Government Response announces an increase in the CCA buy-out price in line with RPI to £14/tCO2e for TP 3 and TP 4 (2017-2020).

A fee termed “buy-out” is payable on each tonne of carbon dioxide equivalent (tCO2e) by which a Climate Change Agreement (CCA) participant falls short of meeting their energy efficiency or carbon reduction targets. The Climate Change Agreement buy-out price was set in 2012 at £12 per tonne of carbon dioxide equivalent (£12/tCO2e) and has remained at that price since.

The Government Response highlights the decision that the CCA buy-out price should be increased broadly in line with the Retail Price Index (RPI) to £14/tCO2e for Target Period 3 (2017 - 2018) and Target Period 4 (2019 - 2020). This is to restore the value of the buy-out price in real terms to what it was when it was set in 2012 and to strike an appropriate balance between a strong incentive to abate emissions and the financial impact on participants. A statutory instrument has been laid to provide for the new £14/tCO2e buy-out price for TP3 and TP4.

Original consultation

Consultation description

Discussion Paper includes update on CCA Target Review 2016 and options for changing the buy-out price in Target Periods 3 & 4 (2017-18 & 2019-20).

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