Government confirms two year extension to Climate Change Agreements Scheme

The government has set out its plans to reopen the Climate Change Agreements (CCA) scheme to new entrants, and extend the scheme for a further two years until March 2025.

A move to extend the scheme was announced in the Spring Budget in March, and a consultation followed on how this would be implemented. In its formal consultation response published last week, BEIS says it will not be reforming the eligibility criteria for the extension or substantially reviewing existing rules and processes for the interim period. New entrants will be allowed to apply to join existing sector agreements, and the deadline for applications has been extended to 30 November 2020.

The CCA scheme, first established in 2001, aims to incentivise energy and carbon savings through setting energy-efficiency targets, whilst also helping to reduce energy costs in sectors with energy intensive processes by providing a significant discount to Climate Change Levy (CCL). The current targets provide a basis on which organisations can make improvements to the energy-efficiency of facilities included in agreements over an 8-year period, ensuring their contribution to UK-wide goals, in return for savings worth nearly £300m annually.

The consultation response showed strong support from businesses and industry for continuation of the scheme. Almost 9,000 facilities across the UK currently take part in the scheme, and a recent evaluation of the scheme found that in most participating sectors participation was between 80-100% of eligible businesses.

The consultation also invited views on how a future CCA scheme beyond March 2025 could be targeted to better deliver value for taxpayers’ money and to support the UK’s commitment to net zero. Responses highlighted that a future reformed scheme could help industry in the transition to net zero, whilst supporting the competitiveness of businesses. Respondents also gave views on the eligibility criteria for a future scheme, the need to support both energy efficiency and carbon savings, and the potential for simplification of any future scheme and the wider policy landscape.

To learn more about CCAs watch BiU’s on demand All About CCAs webinar with senior energy and carbon consultant, Martyn Gilbert.