Climate Change Agreement Scheme Reopens – Businesses Must Act Now

Climate Change Agreement

At a time when businesses are seeking to reduce their operational costs wherever possible, the proposed reopening and extension of the Climate Change Agreement (CCA) scheme will be welcomed by many. But those that wish to secure an agreement – and benefit from the significant savings they bring – must act fast.

Businesses to Save Around £300m Each Year

The CCA scheme enables eligible businesses to make an agreement to reduce their energy consumption and CO2 emissions in return for a discount of up to 92% on the electricity element of the Climate Change Levy (CCL) and 83% on the gas element. To receive this CCL discount, operators must monitor and report their energy consumption against agreed targets across four two-year target periods (TPs). Originally the CCA scheme was set to end on 31st March 2023 – however it was announced in this year’s Budget, that the voluntary scheme will be extended to the end of March 2025, as well as being reopened to new entrants.

As the Government strives to rebalance gas and electricity CCL rates, the rate on gas will continue to rise over the next few years, which will increase energy bills for most businesses. This will make holding and retaining a CCA even more valuable – it is estimated that this extension will save businesses around £300m each year.

When is the Deadline for Applications?

The window of opportunity for new entrants is small, with the application period for new applicants closing on the 30th November 2020, subject to the outcome of the recent consultation. This means there’s limited time for businesses to put together and submit their applications.

Businesses who wish to apply must do so via their sector association. This means businesses could have even less time to prepare, with sector organisations requiring new entrant applications earlier, to allow them sufficient time to submit to the Environment Agency.

How Do I Apply?

Businesses that think they might be eligible for a CCA should investigate whether their processes do indeed fall under the scheme’s criteria. A full list of eligible processes can be found in Appendix A of the CCA Operations Manual.

If their processes are eligible, then new applicants need to start gathering the information they need to apply for a CCA now, to ensure they can submit their application before the 30th November deadline. This includes information around:

  • the specific facility/facilities carrying out eligible activities
  • any environmental permits held (including existing or previous CCA or EU ETS permits)
  • details of the manufacturing processes on site and other activities directly associated with the eligible process
  • the amount and type of energy the eligible and directly associated activities use

Lessening the Burden

The CCA application process can be complex and time-consuming for businesses, and with the coronavirus pandemic causing ongoing disruption for many organisations, it may not seem like the ideal time for businesses to take on extra admin. However, the financial benefits of gaining a CCA can make such a substantial impact on an organisation’s energy bills that it’s vital for eligible businesses to apply.

By working with an energy consultant, businesses can benefit from the expertise of those who deal with energy compliance on a daily basis, which should streamline the CCA process and take the burden off their in-house team. Whether they choose to go it alone or seek external support, however, it’s crucial that businesses don’t delay in order to secure the substantial savings available for those with a CCA.

 

To find out more about how Inspired Energy’s experts can help with your CCA application, visit inspiredenergy.co.uk/landing/cca.