The Climate Change Levy Exemption

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The Climate Change Agreement helping businesses reduce CO2 emissions and save energy

As part of the Government’s commitment to tackle climate change, the Climate Change Agreement, or CCA, is a package of measures that aims to encourage UK businesses operating in various industry sectors to save energy and reduce carbon dioxide (CO2) emissions.

CCAs are voluntary agreements between industry and the Environment Agency which enables businesses to receive a discount on the Climate Change Levy (CCL) which is a tax added to energy and fuel bills. As the designated Sector Association for the surface engineering and heat treatment sector, the SEA is required to manage the CCAs on behalf of the businesses in our industry.

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Save money on energy and fuel bills through the Climate Change Agreement

The UK Government recognised that energy-intensive sectors, such as the surface engineering sector, required special consideration in relation to the CCL, so that these industries are able to remain competitive in markets overseas. This means that businesses carrying out surface engineering and treatment processes are eligible for discounts on the CCL under the Climate Change Agreement, if they meet certain criteria.

Businesses who hold an agreement are required to measure and report their energy use and carbon emissions against agreed targets. If the targets are met, the business will have the CCL on their electricity bills reduced by up to 90% and 65% on fuel bills.

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Call the SEA for help with understanding the Climate Change Agreement

There are two types of Climate Change Agreement, sector-level agreements between The Environment Agency (EA) and the Sector Association, known as ‘umbrella agreements’, and individual agreements between the EA and an individual facility operator, known as ‘underlying agreements’.

An umbrella agreement sets out sector targets, the sector and the EA’s obligations, as well as the procedures for administering the agreement. An underlying agreement, however, set out the targets the facility needs to meet, the operator (business) and EA’s obligations, and the procedures for administering the agreement.