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21 August 2012

New Climate Change Agreement (CCA) from 1 April 2013

The current Climate Change Agreement (CCA) runs until 31 March 2013 and a new agreement will start from 1 April 2013. In January, the Government response to the September 2011 consultation on simplification of CCAs for the new Scheme (which Budget 2011 announced would run until 2023) was published. The January 2012 publication set out the final policy direction of the new Scheme.

 

In January 2012, DECC published a consultation (2) seeking views on draft regulations to appoint the Environment Agency as the administrator for the new scheme, the Climate Change Agreements Regulations 2012.  Following this consultation, a finalised version of the regulations is intended to be published and laid before Parliament in September 2012 in order to come into force on 1 October 2012.

 

There will be a number of significant changes to the new CCA and targets will be much more strict.  Changes could include the following:

 

  • Maximum CCLA electrical discount increase from 65% to 90%.  Gas discount on levy remains the same, ie 65%
  • Significant increase to the cost of carbon following the closure of UK Emmission Trading Scheme.  A typical recent example is £2.50 per tonne CO2 rising to £12 per tonne (fixed to 2015) if the company fails a target
  • Target periods to increase from 12 to 24 months long
  • New CCA open to new sites
  • Minimum exemptible consumption to achieve full discounts – rule changing from 90/10 to 70/30
  • Base year for comparison originally selectable - and typically 1995 - to change to 2008.

 

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