CCAs are a voluntary scheme first introduced in 2001, for non-domestic energy intensive sectors, to encourage them to reduce energy use and reduce CO2 emissions. In return, participants receive a discount on the Climate Change Levies (CCL). For participants who hold a CCA, as of April 2022, the CCL will be reduced by 92% on electricity bills and 86% on gas.
How Does it Work?
CCA compliance requires the participating entity to monitor, record, calculate energy consumption and report carbon emissions every two years, known as biennial target periods. Participants will be required to report energy consumption from their business activities. Meeting targets at the end of each target period will ensure that the participant will continue to receive the CCL discount. The government has announced a new 6-year CCA scheme, with the first (1st) target period being a 12-month period covering January 2026 to December 2026. The second (2nd) target period of the new scheme runs between January 2027 and December 2028, with the third (3rd) running between January 2029 and December 2030. The scheme will provide CCL discount rates until March 2033.
Meeting targets at the end of each milestone will ensure that the participant will continue to receive the CCL discount; this total discount could be up to 92%. However, failing to meet targets will require the participant to pay a ‘buy out’ fee. During the first (1st) target period the buy-out fee will be £25 per tonne. Participants failing to pay the buy-out fee will be decertified from the scheme.
Who is Eligible?
CCAs are available for a wide range of industry sectors from major energy-intensive processes such as chemicals, paper, food & drink and supermarkets to agricultural businesses such as intensive pig and poultry farming. There are around 51 sectors involved.
Participants in existing eligible sectors will be able to participate in the new CCA scheme from 1st January 2026. However, existing participants will not be automatically migrated to the new scheme and will be asked to confirm eligibility. New entrants into the CCA scheme in eligible sectors will have between May 2025 and August 2025 to submit their applications.
LGE’s Service Offering
Our CCA service includes all aspects of data collection, monitoring, reporting CCA performance against targets, liaising with sector associations and assistance with the forecast and calculation of potential carbon buy-out if required. In addition, clients will have access to LGE’s energy management advisory service which provides further cost benefit via energy reduction to clients. LGE have provided the following list of services:
- Internal audits to identify potential risks of non-compliance and identify areas of strength
- Assessment of current energy consumption and carbon emissions
- Assessment of metering and where energy is actually consumed on site
- Benchmarking of current emissions to identify areas of improvement
- Review of current energy policy
- Maintenance of CCA evidence reporting pack
- Advisory and recommendation role
- CCA database maintenance and management
If you believe you could benefit from the discounts offered through the CCA scheme then speak to your account manager today or contact us at info@lgegroup.com.