Summary

The Climate Change Agreements (Administration and Eligible Facilities) (Amendment) Regulations 2020 amend the Climate Change Agreements (Administration) Regulations 2012 and the Climate Change Agreements (Eligible Facilities) Regulations 2012 and come into force on 1 October 2020.

What is being changed?

New Target Periods

The Climate Change Agreements (Administration) Regulations 2012 are amended to add a new Target Period (Target Period 5) from 1st January 2021 to 31st December 2022. Target periods are periods in which organisations subject to Climate Change Agreements (CCAs) are required to meet targets set. There have been four two-year periods from 2013 to 2020. The additional target period sets new targets, reflecting the extension of the scheme until 31 March 2025.

Greenhouse gas emissions beyond the targets set under CCAs need to be covered with additional carbon allowances. The amending regulations increase the buy-out rate to £18 per tonne carbon dioxide equivalent (tCO2e) for shortfalls arising in Target Period 5.

Reduced Rates

The Climate Change Agreements (Eligible Facilities) Regulations 2012 are amended to extend eligibility for reduced rates of climate change levy until 31 March 2025. This was previously due to end on 31 March 2023.

Background

The climate change levy is a tax on the supply of a range of fuels including electricity, natural gas, liquefied petroleum gas and solid fuels when supplied for use by the private and public sectors.

The climate change levy was introduced on 1 April 2001 by the Finance Act 2000 as part of the UK’s Climate Change Programme.

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