Climate Change Agreement Deadline Extension

Background

In the Spring Budget 2020, the Government announced that the current Climate Change Agreement (CCA) scheme would be reopened to new entrants for a set period and extended for a further two years until March 2025.

Almost 9,000 facilities across the UK currently benefit from participation in the scheme. A recent evaluation of the scheme found that in most participating sectors participation was between 80-100% of eligible businesses. That means a further 20% of qualifying customers, in certain sectors, are potentially missing out on up to 92% savings against Climate Change Levy charges.

92%

savings against Climate Change Levy charges

The response has provided some useful information on some of the proposals raised in the original consultation. These are summarised below:

• Eligibility: The current eligibility criteria will be maintained for the extension.

• New Entrants: New entrants will be allowed to apply to join existing sector agreements, with the Environment Agency expected to certify eligible new entrants from January 2021. The deadline for applications is extended to 30 November 2020. Certification of new entrants to the scheme is expected to start in January 2021 and the EA administrative deadline to determine all new entrant applications is 1^st March 2021. The absolute deadline for new entrant certification is 31^st March 2021. Certification will begin on the date on which the underlying agreement takes effect. Certification of new facilities will not be retrospective to an earlier date.

• Baseline for Targets: The baseline period is to be updated to 2018.

• Target Setting: It is proposed that a 6.67% target is introduced for TP5 (2021 to 2022), this will be calculated against the revised baseline year of 2018. Where the sector associations disagree with the target, they can submit a counter-proposal to BEIS, the deadline for these counter proposals has been extended from 31^st July 2020 to 30^th October 2020. The reasoning behind the target increase is to support the UK’s decarbonising ambition by adopting the legal requirement to reduce its carbon emissions to net zero by 2050. The sector targets are therefore consistent with meeting a 20% improvement to energy efficiency by 2030 from the 2018 baseline.

• Surplus: any surplus attained from TP1 to TP4 through overperforming, which has previously been banked, will not be carried forward to TP5.

• Buy-out Price: This will increase to £18/tCO2e for Target Period 5. Target Period 4 buy-out remains at £14/CO2e.  This will increase the cost for operators who fail to achieve TP5 target.
• Do not miss out: Data gathering and application completion require resource and knowledge which is where Trident can help.  Our team of in-house engineers will remove the time and cost associated with completing your CCA assessment and application so please do not miss out on significant CCL discounts.