The Department for Business, Energy and Industrial Strategy (BEIS) launched a consultation on 16 April to extend the Climate Change Agreement (CCA) by two years. The CCA incentivises businesses to become more energy efficient and less carbon intensive by providing a significant discount to the Climate Change Levy (CCL) they pay on their energy usage, if they meet targets for reducing emissions. Once they meet the targets – to make improvements to the energy efficiency of their facilities over an eight-year period – a reduced rate certificate will be supplied listing facilities entitled to claim a discount on the CCL.

BEIS said there is strong support from businesses and industry for the scheme. Over 9,000 facilities across the UK benefit from participation and a recent evaluation of the scheme found that between 80-100% of businesses were participating in most eligible sectors (industrial, commercial, agricultural and public services). In the Spring Budget, the government announced that the current CCA scheme will be reopened to new entrants for a set period and extended for a further two years until March 2025. The consultation sets out the government’s proposals for how this extension will implemented.

About climate change agreements

Climate change agreements are voluntary agreements made by 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.