What are Climate Change Agreements?
DECC has recognised the need to give special consideration to energy-intensive industries with regards to climate change, given their energy use and their need to compete internationally.
Consequently, energy-intensive industries can obtain an 80 percent discount from the Climate Change Levy, provided they meet challenging targets for improving their energy efficiency or reducing their carbon emissions.
Climate Change Agreements (CCAs) set the terms under which eligible companies may claim the levy reduction.
CCAs have a two-tier structure:
- sector-level agreements between DECC and the sector or trade association (known as umbrella agreements). These set out sector targets, the sector and DECC's obligations, and the procedures for administering the agreements.
- individual agreements between DECC and the facility operator (known as underlying agreements). These set out the targets the facility needs to meet, the operator and DECC's obligations, and the procedures for administering the agreements.