Synopsis
These regulations will expand the list of installations eligible for climate change agreements. Climate change agreements apply a reduced rate of climate change levy on the installation’s bills, in return for binding energy or emissions targets.
Installations undertaking the mechanical recycling of plastic, packaging spirits or producing automotive grade battery cells will become eligible for these agreements.
Summary
The Climate Change Agreements (Administration, Energy-intensive Installations and Eligible Facilities) (Amendment and Revocation) Regulations 2026 will revoke and replace the Climate Change Agreements (Energy–intensive Installations) Regulations 2006 on 1 January 2027. The following legislation will also be amended:
This legislation will apply across the UK.
What will change?
Eligible installations may enter into Climate Change Agreements (CCAs). These agreements apply a reduced rate of climate change levy on the installation’s bills, in return for energy or emissions targets. If these targets are not met within a given target period, organisations are required to ‘buy-out’ each tonne of carbon dioxide equivalent for the shortfall.
The Climate Change Agreements (Administration, Energy-intensive Installations and Eligible Facilities) (Amendment and Revocation) Regulations 2026 update the list of installations eligible for CCAs. This list is expanded to add:
The newly eligible installations may apply to enter into a CCA from 1 January 2027. The full list of eligible installations is stated within the Schedule.
Buy-out Formula
The amending regulations also correct the formula within the Climate Change Agreements (Administration) Regulations 2012 for the calculation of the amount of buy-outs required when CCA targets are not met. This change updates the carbon emission factor for gas.
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