Climate Change Agreements (CCA)

At Here’s The Plan, we provide expert support to help businesses navigate the complexities of the Climate Change Agreements (CCA) Scheme. From managing the application process to ongoing reporting and staying informed on scheme updates, our team ensures you remain compliant every step of the way.

What exactly is a CCA?

The Climate Change Levy (CCL) was introduced in 2001 as a tax on the energy bills of businesses. It was soon realised that this tax could make UK industries that use a lot of energy vulnerable to competition from other countries. To address this, the Climate Change Agreements (CCAs) were created. These are voluntary agreements where businesses set energy-saving goals that are challenging but possible. In exchange, they get a discount on the CCL. 53 energy intensive industries are eligible to participate. Performance is measured annually but assessed every 2 years. These 2-year periods are known as target periods (TP). If you don’t save enough energy to meet your targets, you can ‘buy out’ the carbon difference between performance and target to keep the tax discount. Each TP recertifies the CCA holder to claim discount for a further two-year period.

How are you eligible for a CCA?

To qualify for a CCA, your site(s) must either:

Undertake processes under the Environmental Permitting Regulations for your specific industry sector or:
Your activity meets the criteria under Energy Intensity, tested at specific sector level.

For example, the Food industry’s Trade Association is the FDF, and their eligibility criteria is as follows:

Eligible process = treatment & processing of materials intended for food products

Directly associated activities (DAA) = On-site activities essential to support the eligible process e.g. boilers, compressors, refrigeration

Ineligible activities = e.g. offices, staff areas (changing facilities, canteen, WCs

No matter the industry you are in, you must understand the 70:30 rule.

What is the 70:30 rule?

The 70:30 rule means that if more than 70% of all the primary energy used across the whole site is used in the eligible process (dictated by your Trade Association), then 100% of the site can claim the CCL discount.

For example, here are two sites, one passes the 70:30 rule and one does not:

The New 2026 CCA Scheme

The reporting for the final target period of the current CCA scheme (Jan 2024 – Dec 2024) will be finished by Apr 2025. After this, actions must be taken to participate in the new CCA scheme beginning in 2026.

The new scheme has been confirmed to last 6 years, starting on the 1st of January 2026 (meaning no target for 2025!).

Participants in the current CCA scheme who wish to participate in the new scheme, will be asked to confirm eligibility and will not be automatically migrated over to the new scheme.

Those who do not participate in the current CCA scheme but are in an eligible sector and wish to join, will be able to apply to the scheme between 1st January and 31st August of each year within a Target Period. There will be an initial application window running from 1st May – 31st August 2025 for eligible facilities to apply before the new CCA scheme begins in 2026.

There will be some major changes between the current CCA scheme and the new CCA scheme, including –

2022 data as a baseline against which to measure performance (current scheme uses 2018).
Energy consumption being determined by fixed energy consumption (FEC) and variable energy consumption (VEC).
Reporting being done at facility-level, eliminating the current ‘bubble’ system wherein multiple facilities can pool together their performance metrics.
A brief annual report of key actions taken to meet targets or issues that may have impacted on achievement of the target.

Next Steps

Discover the latest key updates to the Climate Change Agreements (CCA) scheme here.

Whether you’re already part of the scheme and need help transitioning to the new rules, or you’re a new entrant looking to get started, Here’s The Plan is here to guide you every step of the way.

Climate Change Agreements (CCA)