The Climate Change Levy (CCL) was introduced in the UK in 2001. This levy is charged on energy usage and its desired impact is to reduce industrial energy consumption in the UK. The Climate Change Agreement, is a way for high energy users to save on the amount of levy charged by entering an ‘agreement’ to become more energy efficient. This incentive historically meant these high energy users can save up to 65% of this tax (levy).
From 1 of April this year (2013) the Climate Change Agreement passed into the hands of The Environment Agency
The most noticeable change for eligible energy-intensive businesses meeting energy efficiency or carbon-saving targets is they can now receive up to 90% discount for the CCL charged on the electricity used. A dramatic increase from the previous figure of 65%, other fuel consumption potential levy savings remain fixed at 65%.
The Environment Agency website has the following description of the two different agreements:
There are two types of CCA ‘umbrella’ and ‘underlying’ agreements. Umbrella agreements set commitments for eligible industry sectors, these are negotiated between the sector associations and the Department for Energy and Climate Change (DECC). Underlying agreements contain targets allocated by the sectors to the operators in each sector. The new scheme applies to 51 sectors with umbrella agreements, with about 4,300 underlying agreements covering some 9,900 facilities. All the sectors that were previously eligible to hold a CCA remain eligible, though a number of sectors have merged taking the total from 54 to 51.
Enhancements to the Climate Change Agreement
To find out which processes are eligible in each sector, download the operations manual on The Environment Agency scheme guidance web page.
>Inverter Drive Systems are keen to discuss reducing energy consumption and CO2 emissions, if you have or are considering a Climate Change Agreement to reduce your Climate Change Levy liability then get in touch and see how we can lower YOUR energy consumption!