Apply for a CCA with BPF Energy to reduce your energy bill

Last few weeks to apply for a CCA with BPF Energy to reduce your energy bill

The UK’s 2023 Budget announced the extension of the Climate Change Agreement (CCA) scheme to 31st March 2027. BPF Energy Technical Director Peter Haslop explains the key benefits of the scheme below – but companies wishing to benefit need to apply soon!

What is a Climate Change Agreement (CCA)?

A Climate Change Agreement (CCA) is a voluntary scheme that includes targets to increase energy efficiency and reduce CO2 emissions. The scheme is provided by the UK government and BPF Energy administers the CCA scheme on behalf of the plastic industry. 

Put simply, having a CCA helps your company reduce its carbon emissions by improving productivity and energy efficiency and also entitles you to a reduced Climate Change Levy (CCL), something which is now automatically added to non-domestic energy bills. The CCA is also helpful in improving a company’s sustainability credentials, in assisting towards net-zero status and in automatically registering and updating the company’s carbon footprint. 

The majority of CCA changes in the last three years have been administrative and in relation to the changing landscape of UK government organisation. The presiding body for these matters is now entitled DESNZ – Department for Energy Strategy and Net Zero. 

CCAs have been in existence in the UK for over twenty years and the plastics industry has thereby succeeded in saving millions of pounds on its energy bills. 

What is the current CCA relief timetable?

New CCA entrants are urged to apply now – well before the scheme deadline of 30 September 2023. Applicants are also encouraged to engage with the BPF team immediately.

Once accepted into the CCA scheme, companies will be able to claim financial relief until 31n March 2027 (provided the facility is recertified following Target Period 6). 

How does my company qualify for a CCA?

Most businesses within the plastics processing industries are obliged to pay a Climate Change Levy on their energy bills and this increases each April in line with inflation. The levy is applied across the following utilities: electricity, gas, LPG and other fuels. The electricity levy has stabilised in recent years. The gas levy, however, continues to rise to be the same figure as electricity later in 2024. 

Put simply – if a company’s energy invoices have line items marked Climate Change Levy (CCL) and if the combined charges of these are greater than £750 a month before any discount then those companies qualify and are strongly advised to apply through the BPF for the CCA scheme. 

Most plastics processors are eligible for the scheme – extruders, injection and blow moulders, thermoformers – and also those who are applying heat and or pressure in manufacturing, thus including compounders and coating manufacturers. Recyclers can also benefit from a CCA, as long as they turn flaked plastic into polymer beads onsite.

The BPF estimates that very many qualified companies are still not claiming the CCL tax relief they would be entitled to if they had a CCA.

Is a CCA a good idea for all plastics companies?

Whether or not a CCA will benefit your company firstly depends on the amount of energy your company uses. For example – and for 2023/24 - an annual usage of 1m kWh will yield a saving of £7,130. A ‘straight line’ calculation method then applies to larger amounts of usage – up to a saving, for example, of £35,650 for a 5m kWh use per year. 

The CCA application process is site dependent and does include detail relating to the measurement of core industrial energy consumption, including issues of metering and sub metering and the setting of targets for a decrease in the site’s energy consumption relative to its production. 

What action should my company take?

If you are a plastics processing business and are interested in benefiting from a CCA through the BPF we advise you to contact us at your earliest opportunity and to finalise your application with us well ahead of the submission deadline 30th September 2023. 

For further details please email cca@bpf.co.uk or visit www.bpf.co.uk/cca.