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CCA scheme extension consultation launched by Government

Published May 8, 2020

The government is seeking views on an extension to the current scheme for Climate Change Agreements (CCAs). The consultation outlines proposals to extend the scheme by two years and open it up to new entrants, allowing eligible facilities not currently participating to apply to join in 2021.  

Under the CCA scheme, companies that conduct eligible processes can enter into voluntary agreements that encourage energy efficiency measures in return for a reduction to the Climate Change Levy (CCL) rates. The eligible processes sit within 50 different sectors, which include: chemicals, brewing, baking, laundries, data centres, food & drink, and plastics. The CCA scheme is currently in its second version, which started in 2013 and is due to close in 2023. 

The main proposals around the extension of the current scheme are:  

• extend the current climate change agreements (CCA) scheme by 2 years, through: 

– the addition of a new Target Period (TP5), from 1 January 2021 to 31 December 2022.  
– relief on CCL to be extended to the end of March 2025 if all criteria have been met

• re-open the scheme for new entrants until 30^th September 2020, allowing eligible facilities not currently participating to apply to join in TP5.  
• Increase the buy-out price to £18/tCO2e for TP5.  
• Update the baseline year for all sectors and target units to 2018.  

The proposed reopening of the scheme for new applicants provides a good opportunity for companies that may have missed the previous deadline to now submit an application.  

The government is also seeking views on potential reforms were there to be a future CCA scheme, stating:

“While at this stage we are proposing an extension operating on a similar basis to the existing scheme, we would like to explore how any longer-term CCA scheme might fit within the wider policy landscape and contribute to the commitment to net zero”.  

The consultation on the CCA scheme extension and reforms for any future scheme closes on 11^th June 2020.   

Tags CCA CCL Climate Change Agreement