Government announced Climate Change Agreement (CCA) scheme extension to 2027

Announced in line with the 2023 Spring Budget by Chancellor Jeremy Hunt, the Department of Business, Energy & Industrial Strategy (BEIS) (soon to be split into the Department for Energy Security & Net-Zero (DESNZ)) has confirmed that the Climate Change Agreement (CCA) Scheme will extend by two years to 2027.

What does this mean for businesses currently participating?

The newly announced Target Period 6 will be in place from 1st January 2024 to 31st December 2024, with the base year set as 2018. Performance against those targets will allow reduced rates of Climate Change Levy (CCL) to be available for eligible businesses for a further two years until 31 March 2027.

Other important details to note include that no surplus CO2 is to be carried forward from TP5 to TP6 and the buyout price will increase from £18/tCO2e to £25/tCO2e.

If you’re in a CCA already and you need some support, please get in touch. As target setting looks to become more specific, we can help you to understand these changes and what they mean for your business.

A potential opportunity for new eligible businesses

As the scheme is now being extended, a new application window is likely to re-open for those who are not currently participating but are eligible under the scheme criteria. The proposed application window for new entrants is from the 1^st May 2023 to the 30^th September 2023.

Any organisations who are successful in their application would be eligible to claim the reduced rates of the Climate Change Levy (CCL) from the 1^st January 2024 or from the date where the operator provides their assent to the proposed agreement if later than the 1^st January 2024.

Engage now to get prepared

We’d advise you to engage with a specialist now to get prepared and make sure you meet the deadline if the application window re-opens.

If you believe that your business will be eligible for a CCA, get in touch with Inspired for a FREE CCA eligibility assessment. You can view the full list of eligible processes here.

With a CCA in place you could apply for up to a 92% saving of your electricity CCL charges and an 88% saving on gas.

Supporting you through the process

It is estimated that the CCA scheme could save businesses around £300 million per year!

“The announcement of an extension to the CCA scheme is not only great news for businesses currently participating, but potentially for those who may have missed out on previous application periods. It will mean further savings can be made for those who need it most during these challenging times. Inspired is here to help you through the process and ensure your business energy and sustainability needs are set up for success.”

Craig Jackson, Director of Energy Solutions, Inspired PLC

With businesses facing extreme cost pressures from rising energy prices to decarbonising to meet net-zero, a CCA could provide your business with a much-needed CCL charge relief.

What will happen beyond 2027?

BEIS have also issued a consultation on the detail of the scheme extension and proposals for any potential scheme beyond the 31^st of March 2027. The response deadline for the consultation is set on the 10^th of May 2023 and is seeking views from sector associations, participating businesses, non-participating operators of facilities, trade associations, NGOs, consultants, energy suppliers and academia, amongst others interested in the scheme.

Read the full documentation for the upcoming consultation here.