How climate change agreements (CCAs) work, who is eligible and which sector associations hold a CCA.
CCA scheme extended until March 2025
The Department for Business, Energy and Industrial Strategy (BEIS) has extended the CCA scheme for 2 years, until March 2025. For details, see BEIS’s consultation response. The Environment Agency will publish updated guidance early in 2021.
About climate change agreements
Climate change agreements are voluntary agreements made between UK industry and the Environment Agency to reduce energy use and carbon dioxide (CO2) emissions. In return, operators receive a discount on the Climate Change Levy (CCL), a tax added to electricity and fuel bills. The Environment Agency administers the CCA scheme on behalf of the whole of the UK.
If you hold a CCA you will get a discount on your CCL. See the guidance Climate Change Levy: application, rates and exemptions guidance.
CCAs are available for a wide range of industry sectors from major energy-intensive processes such as chemicals and paper to supermarkets and agricultural businesses such as intensive pig and poultry farming.
There are 2 types of CCA – umbrella agreements and underlying agreements.
The Department of Energy and Climate Change and industry sectors negotiated energy efficiency targets for each sector – the sector commitment. The targets were then included in umbrella agreements held between sector associations and the Environment Agency. Umbrella agreements also list the processes that are eligible for a CCA. In 2020 BEIS negotiated new targets for 2021 and 2022.
An underlying agreement is held by an operator for a site, or group of sites, within a particular sector. It contains energy or carbon efficiency targets appropriate for their type of operation derived from the umbrella agreement.
Sector associations manage the underlying agreements for businesses in their sector. An operator that wants to enter into a CCA must apply first to its sector association.
How CCAs work
The current CCA scheme started in April 2013 and will run until 31 March 2025.
An operator that has a CCA must measure and report its energy use and carbon emissions against agreed targets over 2-year target periods up to the end of 2022.
If an operator has more than one eligible facility in the same sector it can hold an individual CCA for each facility, or choose to group them together under one CCA. Where facilities are grouped under one CCA the target is then shared across the grouped facilities.
Once a facility, or group of facilities, is included in a CCA, it is referred to as a target unit.
If the operator’s target unit meets its targets at the end of each reporting period, the facilities continue to be eligible for the discount on the CCL.
The reduced rate certificate lists facilities entitled to claim a discount on the CCL and is updated on the last working day of each month. By clicking on this link you will be directed to data.gov.uk, where you will be able to download a spreadsheet of the facilities included in the reduced rate certificate.
Check your eligibility
You can check if the processes you run are eligible for inclusion in a CCA by reading the summary in Appendix A of the CCA operations manual.
Contact your sector association if you need further advice.