Introduction to Climate Change Agreements
Climate Change Agreements (CCAs) are part of a package of government measures aimed at encouraging UK business to save energy and reduce carbon dioxide emissions. They set the terms under which eligible energy-intensive industries can claim a discount on the Climate Change Levy (CCL), provided they meet targets for improving their energy efficiency or reducing their carbon emissions.
The purpose of Climate Change Agreements
The Department of Energy & Climate Change (DECC) has recognised the need to give special consideration to energy-intensive industries with regards to climate change, given their energy use and their need to compete internationally.
Consequently, energy-intensive industries can obtain a discount from the CCL, provided they meet challenging targets for improving their energy efficiency or reducing their carbon emissions.
CCAs set the terms under which eligible companies may claim the levy reduction.
CCAs have a 2-tier structure:
Sector-level agreements between DECC and the sector or trade association (known as umbrella agreements) - these set out sector targets, the sector and DECC’s obligations, and the procedures for administering the agreements.
Individual agreements between DECC and the facility operator (known as underlying agreements) - these set out the targets the facility needs to meet, the operator and DECC’s obligations, and the procedures for administering the agreements.
Full guidance on the CCA scheme can be found at http://www.environment-agency.gov.uk/business/topics/pollution/140070.aspx