Climate Change Agreements
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Climate Change Agreements

A Climate Change Agreement (CCA Scheme) is an agreement between a company and the UK Government, administered by the respective trade body and the Environmental Agency. The CCA scheme represents one of the few successful schemes applied by the government with the intention of reducing carbon in industry, currently in consultation to identify the next stages of carbon reporting.

Introduced in the early 2000’s to increase competitivity in the European and Global marketplace after the industry had lobbied Westminster due to increasing non-commodity costs, specifically the 1998 HMRC levy. Upon successful entry, a business is provided with a 90% CCL Rebate on power and 65% on gas.

Understanding your Specific Energy Consumption (SEC)

The need to understand which part of the energy that you use to make your product is critical to the success of your Climate Change Agreement - Every sector agreement is different, some in the way they report i.e. kg per kWh or L per kWh others in the methods that can be applied to their processes i.e. NOVEM. What is vital is that a business understands what their SEC is and where it is in relation to their sector target.

Measure - Monitor - Manage

The ability to measure a business’s consumption is essential and a requirement of a CCA, the monitoring is required as part of the CCA process and the need to provide returns to the trade bodies. The management of a business’s energy is the trickiest aspect of a CCA, the old saying, “you can take a horse to water but.....” applies very well here.

Challenges

  • Sector Targets
  • Project Identification and Costs
  • Technological Advancements

Opportunities exist throughout business for energy reduction and the CCA delivers reward for good practice, so the leaner your process the closer you will get to your target and the smaller the fine will be. Do nothing and potentially you can be removed from the scheme and fined accordingly.

Opportunities

  • CCL Relief
  • Energy Savings
  • Product development

An increase in levy is affecting all sectors both public and private, increases of approx. 65% on 2016 CCL power figures and approx. 73% on Natural gas, and with the increase coming into effect from April 2019 businesses need to act now to be able to receive the increased percentage reduction. Upon first glance this doesn’t represent a massive increase but taken into context, a business utility bill shows the CCL Charge, this represented approx. 7% in 2016 and from Apr19 this will represent approximately 11%. 

Main Rates Of CCL

Percentage discount for holders of a CCA

CCA entry is primed to become even more important post-2019 due to the increases in CCL since 2016 and also the % based increases in the discounts.

Post-2023 - Future Development

The consultation period ends 31st December 2017 for a new annualised carbon reporting scheme. CCA round 3 has not been finalised and the current round runs until 2023, it is anticipated that the penalties will still be carbon-based purchasing but that the targets may be higher.

The Mineralogical Metallurgical Exclusion (MinMet)

Depending upon eligibility the MinMet exclusion provides both CRC and CCL exclusions, full CRC and potentially full CCL depending upon processes and methods.

A business can make the most of recent legislative changes by gaining fiscal relief from both CRC and CCL, allow our experts to assess your companies viability for a Mineralogical and Metallurgical exclusion and potentially save thousands of pounds.  We will manage the application process while you sit back and receive the benefits.