The buy-out price for Climate Change Agreements (CCAs) has been increased from January 2017, following a review by the UK Government. Participants will therefore see a greater return when investing in energy efficiency in order to pass their CCA targets.
Companies who are failing their CCA targets are advised to act quickly, with Target Period 3 beginning on 1 January 2017. The first step is to project the scope for financial savings if energy reductions are achieved over the next four years.
CCAs are voluntary agreements and remain an essential cost saving opportunity for eligible businesses.
In exchange for a substantial discount on the Climate Change Levy (CCL), businesses commit to meeting energy reduction targets or paying a buy-out fee.
Following the BEIS review the buy-out price will rise to £14 from £12 per tonne CO2e for Target Period 3 (2017-2018) and Target Period 4 (2019-2020), broadly in line with the Retail Price Index (RPI).
As a result, those CCA participants who are set to fail their targets now have an increased need to invest in energy saving measures, with double benefits: reduced energy bills and boosted CCA cost savings.
Even if targets are failed, a CCA typically presents a substantial cost saving for eligible businesses.
CCAs are available to eligible energy intensive sectors, and provide a significant discount on the CCL that will rise to 93% for electricity and 78% for gas in 2019.
How Envantage can help
We are here to help – whether you are failing your existing CCA targets or think you might benefit from a new CCA.
Envantage will project your performance against future targets, so that you can make informed decisions and maximise energy efficiency cost savings.
Please contact us today to discuss.