Climate change agreements

Eligible industries can enter into climate change agreements (CCAs) with the Department of Energy and Climate Change (DECC). To be eligible for these agreements an industry should either operate activities listed in the Pollution Prevention and Control (PPC) Regulations or be classed as an energy intensive industry, meeting specific energy intensity criteria.

GOV.UK: Climate Change Agreements operations manual

This is a voluntary scheme where eligible industries that meet challenging energy efficiency or emission reduction targets benefit from a discount from the climate change levy of 90 per cent for electricity use and 65 per cent for other fuels . CCAs have a two-tier structure, with agreements established with business sectors (umbrella agreements) and with individual businesses (underlying agreements). Each agreement sets out targets, defines the obligations of all parties to the agreements and the necessary administrative procedures. Targets are negotiated between sector associations and government but it is the responsibility of sector associations to distribute the agreed target amongst their members.

GOV.UK:  How to set up and operate a CCA

The scheme currently has 53 participating business sectors, including sectors such as steel, chemicals, paper, cement, food and drink, pigs and poultry.

GOV.UK: List of Sector Associations

The current CCA scheme started on 1 April 2013. In the 2011 Budget it was announced that the scheme will continue until 31 March 2025 and that the existing 53 sectors will continue to be eligible for the CCA scheme and climate change levy discount. 

This extension will provide businesses with more certainty to invest in energy efficiency measures with longer payback periods.