What is a Climate Change Agreement (CCA) and how can it benefit your business?

 

A Climate Change Agreement (CCA) is a voluntary agreement allowing businesses in high energy industries to receive a discount on the Climate Change Levy (CCL) that they pay. The CCL is a tax added to electricity, fuel and gas bills of your company if you are in the industrial, commercial, agricultural or public service sector. By signing up to a Climate Change Agreement, your business can receive savings up to 90% on the CCL, depending on your business this can mean thousands of pounds of savings per year.

CASE STUDY:

By creating a CCA, one of our clients achieved first year savings of £12,208 by reducing the CCL that they paid on their electricity and gas bills.

How it Works:

  • The scheme was implemented in 2013 by the Environment Agency to encourage businesses to reach energy efficiency and carbon saving targets in ‘energy intensive’ sectors.
  • Your business will set targets over four, two-year target periods, measure and reporting its energy use and carbon emissions.
  • If you have more than one facility in the same sector, these could hold individual CCAs for each, or choose to group them together under one CCA with the target then be shared across the grouped facilities.
  • Once you meet your targets in the reporting period, a reduced rate certificate will be supplied listing facilities entitled to claim a discount.

To check if you are currently paying the Climate Change Levy and how much, see your monthly energy bill. This will usually be listed under your charges and calculated at the following rates:

Taxable Commodity Rate from April 1 2017 Rate from April 1 2018 Rate from April 1 2019
Electricity (per kilowatt hour) 0.568p 0.583p 0.847p
Natural gas (per KWh) 0.198p 0.203p 0.339p
LPG (per kilogram) 1.272p 1.304p 2.175p
Any other taxable commodity (per kg) 1.551p 1.591p 2.653p

 

As shown above the CCL rates that businesses will have to pay are increasing, meaning there has never been a more beneficial time to create a CCA and avoid these cost hikes.

Green Element has helped many of our clients successfully reduce the cost of their energy bills and minimise their carbon emissions through implementing Climate Change Agreements. We are happy to work with your business to meet your environmental goals, please contact us to see how we can assist.

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