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Climate Change Agreements (CCAs) Scheme Extended to 2027

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CCA extension

The Climate Change Agreements (CCAs) scheme, initially set to end on 31st March 2025, is now extended until 31st March 2027. The scheme is administered by the Environment Agency (EA).

The scheme is extended by The Climate Change Agreements (Administration and Eligible Facilities) (Amendment) Regulations 2023, which comes into force on 31st December 2023 and amends:

About CCAs

Climate change agreements are voluntary agreements between organisations in the UK industry sectors and the Government. Scheme participants enter into an agreement to reduce their energy use or emissions and, in exchange, will pay a reduced rate of Climate Change Levy (CCL). The current CCL discount is 90%.

Compliance

Scheme participants can remain compliant with the CCA scheme by:

  • meeting an agreed energy efficiency target;
  • meeting an agreed carbon reduction target; or
  • paying a buy-out fee*.

*Scheme participants may, if they fail to achieve the energy efficiency or the emissions reduction target, pay a buy-out fee, which is calculated per tonne of CO2.

Key Changes

The extension to the CCA scheme brings a number of changes, such as:

  • A new target period (TP6) is introduced, running from 1st January 2024 to 31st December 2024.
  • The buy-out fee for TP6 is increased to £25 per tonne of CO2 that exceeds the target.
  • No surplus* previously accumulated by participants is considered in relation to TP6.

*Surplus means the amount by which the reduction in emissions has exceeded the target during a target period.

Changes to penalties

The maximum financial penalty is increased from £250 to £500.

However, the scheme administrator is given discretion to waive or reduce the amount of financial penalty, or to allow extra time for payment, where appropriate.

Publishing information

For financial penalties issued after 31st December 2023, the administrator must publish:

  • the name of the operator;
  • the amount of the penalty imposed; and
  • a description of the contravention that led to the imposition of the penalty.