Climate Change – Latest Developments

The Government have announced an exemption from Climate Change Levy for the Mineralogical and Metallurgical process in line with the Energy Tax Directive. This exemption will take effect from 1st April 2014, please note that surface treatment using solvents is not covered by the exemption and this includes all paint processes.

Following a meeting with the Department of Energy & Climate Change, MH Revenue & Customs and the Environment Agency, I can confirm that you will now have essentially 2 options; either remain in the Climate Change Agreement or terminate it. You do not have to make a decision now as any overpaid CCL can be reclaimed by simply backdating your next PP10 & PP11 forms if you choose to terminate your agreement. If you remain in the agreement, nothing will change and you simply continue as at present. If you decide to leave the agreement you will need to consider the following:

  1. You will only be able to claim the exemption from CCL for the eligible processes on the list and not associated processes as is the case with CCAs.
  2. If you have an Environmental Permit (formerly IPPC), you will need to comply with all of the energy efficiency aspects of your relevant BREF document. You are currently exempt from this aspect due to having a climate change agreement in place.
  3. The Environment Agency will still make their full annual charge of £185.
  4. You do not need to rush into making a decision now.
  5. You will have to formally terminate your CCA.
  6. There may be CRC implications for the activities which are not covered by the exemption.

The Climate Change Levy (CCL) main rates will be increasing significantly from 1 April 2019. The reduced rates are also changing from this date, to limit the increase for CCA participants to an approximately RPI increase. These changes were announced at Budget 2016.

For the upcoming reduced rates changes, we are encouraging CCA participants to review and submit revised PP10 and PP11 forms for early April 2019. Doing so means you can benefit from the financial savings of the new rates quickly. Claiming quickly also reduces the risk of overpaying tax which you would then have to go through the process of claiming back.