Government extends Climate Change Agreement to save businesses £300m

The government yesterday (April 16) launched a consultation on the terms of an extension to the Climate Change Agreement scheme (CCA), which they say can save businesses up to £300m a year.

CCAs work by setting targets for reducing businesses’ energy use in return for discounts on the climate change levy on their energy bills. The consultation will enable new targets to be put in place from January 2021, allowing the extension of the scheme beyond its current March 2023 end date to March 2025.

The 2-year extension, announced by the Chancellor during the Spring Budget, will give eligible companies extra financial support and security by guaranteeing access to savings worth up to £300m a year until 2025.

In addition to extending the CCA for companies currently in the scheme, the consultation will also allow new businesses to apply to join and gain access to savings as of January 2021. Under the current rules, businesses have not been able to join the scheme since October 2018.

Since the CCA was introduced in 2013, it is estimated to have helped companies reduce energy use by up to 2.3 terawatt-hours a year – enough energy to power 140,000 homes.

Energy Minister Kwasi Kwarteng said: ‘Extending the Climate Change Agreement scheme will give businesses greater clarity and security at a time when they need it most.

‘This extension will save businesses money while cutting emissions – a key element of our work to combat climate change in the months and years ahead.’

The move was welcomed by Phillip Law, director-general of the British Plastics Federation.

He said: ‘The British Plastics Federation (BPF) welcomes the 2-year extension of the Climate Change Agreement (CCA) scheme.

‘As an organisation that manages the CCA for the plastics industry, we know this scheme is highly valued and has helped to significantly reduce energy use. Reopening the scheme to new entrants is vitally important to UK businesses as it will help drive improvements to energy efficiency as well as reduce costs.’

Photo Credit – Pixabay