CLIMATE CHANGE AGREEMENTS
Climate Change Agreements were born
out of the Climate Change Levy which was
introduced by the UK Government in April
2001 as an incentive for business to
reduce its energy bills and consequently
its carbon emissions. The levy is an
energy tax that appears directly on an
organisation’s energy bill and was
offset by a 0.3% reduction in National
Insurance contributions. This was found
to be unfair on a number of industries
where the number of employees was
relatively low in comparison to the
amount of energy they consumed.
A number of these energy intensive
industries, identified through their
trade associations, are therefore
permitted to sign up to a Climate Change
Agreement (CCA) which gives them up to
an 80% discount on the levy on the
condition that they agree to meet carbon
reduction targets.
As of the 1st of April 2008 the levy
rates applied are:
Electricity: 0.456 pence per KWh
Gas: 0.159 pence per KWh
If your organisation is a member of
one of the following trade associations
and has sites that use large amounts of
energy because of an “energy intensive
process” (typically greater than
£200,000 per year) then you may be able
to sign up for a Climate Change
Agreement and reduce your energy bills.
Agricultural Industries Confederation
Aluminium Federation Ltd
British Apparel & Textile Confederation
British Beer and Pub Association
British Cement Association
British Ceramic Confederation
British Calcium Carbonates Federation
British Compressed Gases Association
British Egg Products Association
British Glass Manufacturers’
Confederation
British Lime Association
British Meat Processors Association
British Non-woven Manufacturers
Association
British Plastics Association
British Poultry Council
British Printing Industry Federation
British Tyre Manufacturers’ Association
Ltd
Cleveland Potash Limited
Cementitious Slag Makers Association
Chemical Industries Association
Confederation of British Metal Forming
Confederation of Paper Industries
Dairy UK
Food and Drink Federation
Food Storage and Distribution Federation
Gin & Vodka Association
Gypsum Products Development Association
Kaolin and Ball Clay Association (UK)
Maltsters Association of Great Britain
Metal Packaging Manufacturers
Association
MINESCO Representing Eurisol
National Association of Master Bakers
National Farmers Union
National Microelectronics Institute
Non-Ferrous Alliance
Packaging and Industrial Films
Association
Scotch Whisky Association
Society of British Aerospace Companies
Ltd
Society of Motor Manufacturers and
Traders Ltd
Surface Engineering Association
Target 2010 (Foundries)
UK Leather Federation
UK Renderers Association
UK Steel Association
Wallcovering Manufacturers Association
Wine & Spirit Trade Association
Wood Panel Industries Federation
Sites which are eligible to apply for
a Climate change agreement can do so to
DEFRA through their trade association.
If the application is successful the
site will be required to do the
following in order to receive a
reduction on the Climate Change Levy for
the site.
1) Commit to Energy reduction targets.
Typically these are measured over a
three year cycle from the base year and
are set at 1% for the first year a
further 1% in year 2 and 6% in the third
year.
2) Submit quarterly monitoring figures
to your trade association. These figures
enable your trade association to monitor
overall performance of your sector and
enable you to judge ongoing performance
against your targets.
3) Maintain an Evidence Pack ready for
audit by DEFRA. The Evidence Pack should
consist of the following:
• All application paperwork
• Any updates to paperwork
• Quarterly monitoring form returns
• Energy saving plans
• Energy reports
• Procedures of how you monitor energy
usage
• Energy efficiency measures
implemented, with costs and dates of
implementation
• Any other accompanying paperwork
Whilst the paperwork in signing up to
a climate change agreement is onerous
the benefits are significant namely:
1) A Reduction in your Energy Bill. A
site with a current annual energy
consumption of £200,000 per annum that
qualified for an 80% rebate on the
Climate Change Levy would see its bills
reduced by more than £7,000 per year.
2) In addition to the rebate received
meeting the targets set a site with a
current annual energy consumption of
£200,000 per annum would save an
additional £22,000 over the three year
monitoring period from lower energy
usage.
3) Sites which are covered by a Climate
Change agreement will not be required to
take part in the upcoming Carbon
Reduction Commitment (A further piece of
legislation) which for qualifying
organisations is likely to be much more
challenging than a Climate Change
Agreement.
In order to find out more about
Climate Change Agreements and to see if
you are eligible to apply please contact
us at:
information@carbonreductionmanagement.co.uk
or telephone: 0115 9377358
and one of our consultants will then be
happy to advise you further.
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