Draft regulations: The Climate Change Agreements (Energy-Intensive Installations and Eligible Facilities) (Amendment) Regulations 2026
Published 4 November 2025
© Crown copyright 2025
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/consultations/climate-change-levy-energy-intensive-installations-and-eligible-facilities/draft-regulations-the-climate-change-agreements-energy-intensive-installations-and-eligible-facilities-amendment-regulations-2026
Summary
Subject of this consultation
We welcome views on the technical application of these draft regulations, which relate to eligibility into the Climate Change Agreement (CCA) Scheme from January 2027.
Scope of this consultation
The draft regulations seek to allow 3 new processes to enter the CCA Scheme from January 2027:
- the mechanical recycling of plastic
- the packaging of spirits
- the production of batteries for electric vehicles
We’re seeking views to ensure the drafting of the regulations achieve the desired effect in law. This consultation is not seeking views about widening eligibility to processes that are not included in the draft regulations.
In addition, the regulations also consolidate and clarify eligibility conditions. The regulations do not seek to preclude any business that presently carries out an eligible process from eligibility.
Who should read this
We welcome views from sector associations and businesses which participate in the CCA scheme, operators of Facilities not currently in the scheme that will be eligible from January 2027, and organisations such as trade associations, consultants, energy suppliers, academia and other stakeholders who have an interest in the scheme.
Duration
The consultation will run for 4 weeks from 4 November to 2 December 2025.
Lead official
The lead official is D. Donnelly of HM Revenue and Customs (HMRC).
How to respond or enquire about this consultation
Any responses or queries about this consultation should be sent to energy.taxes@hmrc.gov.uk.
Written responses can be posted to:
Trinity Bridge House
HM Revenue and Customs
Floor 4
Dearman’s Place
Salford
M6 5RY
Additional ways to be involved
Should you require another format of the draft regulations (such as braille, Welsh versions or large font) please contact energy.taxes@hmrc.gov.uk.
After the consultation
The government will take all responses submitted to this consultation into account and will use this feedback to make changes to the draft regulations. We intend to lay the statutory instrument in Parliament in Spring 2026.
Getting to this stage
From November 2023 to February 2024, the government accepted expressions of interest for new sectors and processes to be added to the CCA scheme. After considering expressions of interest, the government has decided to expand the CCA scheme to 3 new sectors and processes: manufacturing of batteries for electric vehicles, packaging of spirits and the mechanical recycling of plastic.
Previous engagement
A consultation and government response on the future of the CCA Scheme was published by the Department for Energy Security and Net-Zero in November 2023 and October 2024.
1. Introduction
This instrument amends secondary legislation concerning eligibility for the Climate Change Agreement (CCA) scheme. The CCA scheme is a voluntary scheme where eligible businesses enter into agreements with the government to reduce their energy use or emissions and, in exchange, are entitled to pay reduced rates of Climate Change Levy (CCL). CCL is a tax on the supply of energy to non-domestic users, introduced in 2001 to encourage energy efficiency.
The Department for Energy Security and Net-Zero (DESNZ) published a consultation alongside an announcement of a new 6-year phase of the CCA scheme at Autumn Statement 2023. The consultation ran between 22 November 2023 and 14 February 2024. It sought views on policy proposals for the new 6-year phase. The consultation also invited proposals for new sectors and processes to be considered for inclusion in the CCA scheme.
In October 2025, having considered the energy efficiency requirements and other relevant factors, the government announced its decision to add 3 new sectors and processes to the CCA scheme:
- the mechanical recycling of plastic
- the packaging of spirits
- the production of batteries for electric vehicles
The draft regulations seek to implement this into law. This consultation is not seeking views on further processes that should be considered for inclusion in the CCA scheme.
In addition, the regulations also consolidate eligibility conditions into one statutory instrument. The regulations do not seek to preclude any business that presently carries out an eligible process from eligibility.
We welcome any views you have on the drafting of the regulations, especially on how easy you think they’re to follow.
2. Subject chapters
New processes
The CCA scheme supports the government’s objectives to deliver affordable and secure energy and decarbonisation while also helping productivity and the growth agenda. In total, there are 49 sectors which benefit from CCA relief. The most recently added sectors to the CCA scheme – sawmilling and datacentres – were added in 2014.
From November 2023 to February 2024, the government accepted expressions of interest for new sectors and processes to be added to the CCA scheme that would support the schemes objectives. After considering those expressions of interest, the government has decided to expand the CCA scheme to 3 new sectors and processes: manufacturing of batteries for electric vehicles, packaging of spirits and the mechanical recycling of plastic.
Batteries represent one of the highest growth clean energy sectors; the government’s 2030 vision is for the UK to have a globally competitive battery supply chain that supports economic prosperity and the net zero transition. The regulations will also allow more businesses in the spirit packaging and plastic recycling sectors to remain competitive, whilst still driving energy efficiency.
The instrument will enable businesses in these 3 sectors and processes to enter into CCAs with effect from 1 January 2027.
Technical drafting changes
The regulations also make technical drafting changes to existing secondary legislation to consolidate and clarify eligibility to the CCA.
3. Assessment of impacts
Summary of impacts
| Year | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 |
|---|---|---|---|---|---|---|
| Exchequer impact (£m) | Nil | Nil | Nil | Nil | Nil | Nil |
Exchequer Impact Assessment
| Impacts | Comment |
|---|---|
| Economic impact | Publication of this consultation is not expected to have any significant macroeconomic impact Any economic impact of these proposals will be estimated following consultation, final scope and design, and will be subject to scrutiny by the Office for Budget Responsibility. |
| Impact on individuals, households and families | There are expected to be no impacts for individuals at present by publishing this consultation. Any future impacts of reforms, if taken forward by the government after consultation, will be fully examined and detailed. |
| Equalities impacts | It is not anticipated that there will be impacts on those in groups sharing protected characteristics. Any future impacts will be fully examined and detailed following any developments after the consultation. |
| Impact on businesses and Civil Society Organisations | There are expected to be no impacts for businesses and civil society organisations at present by publishing this consultation. Any future impacts will be fully examined and detailed. |
| Impact on HMRC or other public sector delivery organisations | Publication of this consultation is not expected to have any operational and delivery impacts or costs at this stage. Any future funding requirements will be assessed following the consultation. |
| Other impacts | Other impacts have been considered and none have been identified. |
4. The consultation process
This consultation is being conducted in line with the Tax Consultation Framework. There are 5 stages to tax policy development:
Stage 1: Setting out objectives and identifying options.
Stage 2: Determining the best option and developing a framework for implementation including detailed policy design.
Stage 3: Drafting legislation to effect the proposed change.
Stage 4: Implementing and monitoring the change.
Stage 5: Reviewing and evaluating the change.
This consultation is taking place during stage 3 of the process. The purpose of the consultation is to seek views on draft legislation in order to confirm, as far as possible, that it will achieve the intended policy effect with no unintended effects.
How to respond
Responses should be sent by 2 December 2025, by email to energy.taxes@hmrc.gov.uk or by post to:
Trinity Bridge House
HM Revenue and Customs
Floor 4
Dearman’s Place
Salford
M6 5RY
Please do not send consultation responses to the Consultation Coordinator.
Paper copies of this document or copies in Welsh and alternative formats (large print, audio and Braille) may be obtained free of charge from the above address.
When responding please say if you are a business, individual or representative body. In the case of representative bodies please provide information on the number and nature of people you represent.
Confidentiality
HMRC is committed to protecting the privacy and security of your personal information. This privacy notice describes how we collect and use personal information about you in accordance with data protection law, including the UK GDPR and the Data Protection Act (DPA) 2018.
Information provided in response to this consultation, including personal information, may be published or disclosed in accordance with the access to information regimes. These are primarily the Freedom of Information Act 2000 (FOIA), the DPA 2018, UK GDPR and the Environmental Information Regulations 2004.
If you want the information that you provide to be treated as confidential, please be aware that, under the Freedom of Information Act 2000, there is a statutory Code of Practice with which public authorities must comply and which deals with, amongst other things, obligations of confidence. In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on HM Revenue and Customs.
Consultation Privacy Notice
This notice sets out how we will use your personal data, and your rights. It is made under Articles 13 and 14 of the UK GDPR.
Your data
We will process the following personal data:
Name
Email address
Postal address
Phone number
Job title
Purpose
The purposes for which we are processing your personal data is: Draft regulations: The Climate Change Agreements (Energy-Intensive Installations and Eligible Facilities) (Amendment) Regulations 2026
Legal basis of processing
The legal basis for processing your personal data is that the processing is necessary for the exercise of a function of a government department.
Recipients
Your personal data will be shared by us with [HM Treasury].
Retention
Your personal data will be kept by us for 6 years and will then be deleted.
Your rights
You have the right to request information about how your personal data are processed, and to request a copy of that personal data.
You have the right to request that any inaccuracies in your personal data are rectified without delay.
You have the right to request that any incomplete personal data are completed, including by means of a supplementary statement.
You have the right to request that your personal data are erased if there is no longer a justification for them to be processed.
You have the right in certain circumstances (for example, where accuracy is contested) to request that the processing of your personal data is restricted.
Complaints
If you consider that your personal data has been misused or mishandled, you may make a complaint to the Information Commissioner, who is an independent regulator. The Information Commissioner can be contacted at:
Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF
0303 123 1113 casework@ico.org.uk
Any complaint to the Information Commissioner is without prejudice to your right to seek redress through the courts.
Contact details
The data controller for your personal data is HMRC. The contact details for the data controller are:
HMRC
100 Parliament Street
Westminster
London
SW1A 2BQ
The contact details for HMRC’s Data Protection Officer are:
The Data Protection Officer
HMRC
14 Westfield Avenue
Stratford
London
E20 1HZ
Consultation principles
This call for evidence is being run in accordance with the government’s Consultation Principles.
The Consultation Principles are available on the Cabinet Office website.
If you have any comments or complaints about the consultation process, please contact the Consultation Coordinator.
Please do not send responses to the consultation to this link.