Climate Change Agreements (CCA) & Levies (CCL)

 

What is a Climate Change Agreement (CCA)?

Climate Change Agreements (CCA) are voluntarily made between businesses in Energy-Intensive Industries (EII) and the UK’s Environment Agency to reduce reliance on fossil fuels and carbon dioxide (CO2) emissions. In exchange, eligible businesses receive considerable discounts on their Climate Change Levy (CCL) charges, ranging from up to 90% for electricity and 65% for gas. 

CCAs encourage operators to reduce their carbon footprint to meet our global climate change obligations. Participation offers incredible opportunities for tax relief, especially as prices for taxable commodities continue to rise. Consumption reporting framework is particularly important for organisations in Energy-Intensive Industries (EII), such as manufacturing and engineering. If you qualify, your business may be eligible for an exemption of up to 85% of Contracts for Difference (CfD) and Renewables Obligation (RO) charges.

The Environment Agency requires operators to measure and report their energy use and carbon emissions against agreed targets over 2-year periods. Operators can choose to hold individual CCAs for each facility or group them into “target units”. To remain eligible and receive their discount on the CCL, participants must meet their targets by the end of each reporting period. Non-compliance may result in penalties. 

What is the Climate Change Levy (CCL)? 

The Climate Change Levy (CCL) is an environmental tax that charges non-domestic operators for the amount of energy they use. The tax applies to energy-intensive businesses across the industrial, commercial, public, and agricultural sectors and is paid at either the main rate or Carbon Price Support (CPS) rate. As providers of taxable commodities, business energy suppliers are responsible for charging their customers the appropriate CCL.

Get involved.

We’ve helped hundreds of businesses across the UK substantially reduce their energy costs by negotiating and implementing CCAs on their behalf. Get in touch today to learn more about how our range of compliance solutions can benefit your business.