Yesterday HMT announced the Spring Budget 2023 which saw important changes to the current Climate Change Agreement (CCA) scheme. The current scheme was expected to be replaced with an entire new phase starting in 2024. The government have confirmed that the new phase will be postponed and the current CCA phase will be extended for 2 years.

 Climate Change Agreements were launched in 2014 by the UK government to encourage greater uptake of energy efficiency measures among companies in energy intensive industries. It sets energy reduction targets for businesses which can result in a significant discount on the Climate Change Levy on your energy bills.

Key points CCA extension:

  • The current CCA scheme has been extended until March 2027.
  • The eligibility criteria, sectors, and rules will remain the same.
  • The scheme will be open to new entrants for a short time between May and September 2023.

Targets

  • A new target period (TP6) will be introduced covering January to December 2024. Note- January to December 2023 will remain uncovered by a target as anticipated.
  • Targets are expected to be confirmed in November 2023.
  • The base year for TP6 will remain at 2018.
  • Carbon costs for failing targets units will increase from £18 to £25 / tonne

What does this mean to you as a CCA holder?

  • More clarity – Future CCL savings are now secured under the current CCA scheme until at least 2027, subject to meeting targets / paying carbon buyout costs.
  • Start planning – You will be back under target in 2024, and with increased carbon charges for failing sites and reporting requirements you should start planning soon.
  • Increased CCA coverage – If you have any sites not under a CCA, then you have a short window to apply. Talk to us now.
  • Our CCA services will continue as usual, and we will work with you and the sector on the new targets and reporting requirements etc.

Please do not hesitate to contact us if you have any sites needing a CCA, or if you need help with energy and carbon reduction planning or have any general queries.

If you have any questions regarding the CCA scheme please do let me know. We are planning a marketing strategy before the scheme opens in May so I will be sending more material to you to send out to clients.