Jurisdiction: United Kingdom
Commencement: 1st January 2026
Amends:
- The Climate Change Agreements (Administration) Regulations 2012
- The Climate Change Agreements (Eligible Facilities) Regulations 2012
Mini Summary
- The Climate Change Agreements (Administration) Regulations 2012 transfer the administration of the Climate Change Agreement scheme from DECC to the Environment Agency.
- The Climate Change Agreements (Eligible Facilities) Regulations 2012 set out the eligibility criteria for facilities wishing to enter into Climate Change Agreements (CCAs) in order to receive a discount on their Climate Change Levy (CCL). The CCl is a tax on electricity, natural gas, liquefied petroleum gas and solid fuels supplied to the business and public sectors. The CCA scheme was introduced in order to allow certain energy intensive businesses to pay a reduced rate of CCL in return for entering into sector-energy specific energy efficiency agreements.
Duties
Various duties apply and are available to view on the Legislation Update Service.
Amendment
- The Climate Change Agreements (Administration) Regulations 2012
Three new target periods for climate change agreements (CCAs) are added, covering 1st January 2026 to 31st December 2030. Terms specifying the formula to calculate buy-out fees for the new target periods are also added, setting the cost where a CCA participant fails to meet agreed energy efficiency or carbon reduction targets.
Target period 7 covers 1st January 2026 to 31st December 2026, target period 8 covers 1st January 2027 to 31st December 2028 and target period 9 covers 1st January 2029 to 31st December 2030. Targets for these periods apply to individual facilities, rather than groups of facilities operated by a single operator.
- The Climate Change Agreements (Eligible Facilities) Regulations 2012
Technical changes are made to extend the effect of the Regulations to 31st March 2033, covering the end of the certification period for target period 9 (1st January 2029 to 31st December 2030).
Changes are also made to:
- the multiplication factor used to calculate whether a facility is eligible to join a climate change agreement based on electricity used; and
- the calculation of renewable and non-renewable fuels used for energy covered by a climate change agreement.
N.B. Electricity generated from solar, wind or water power and either generated on-site or not supplied through a distribution network is excluded from the multiplication factor used to calculate whether a facility is eligible to join a climate change agreement.