Climate Change Agreements were brought in by the government a number of years ago in conjunction with the Climate Change Levy. With greenhouse gas emissions known to contribute significantly to climate change, the Climate Change Agreements and Levies were introduced in order to help to reduce carbon emissions within the industry, commerce and public sectors.
The premise of the Climate Change Agreements is to facilitate a reduction in the Climate Change Levy requirements of energy intensive industries. The Climate Change Levy is basically a tax based on the usage of gas, LPG, electricity and other taxable commodities (with the notable exception of oil which is already subject to excise duty). The introduction of energy efficiency schemes or the use of renewable energy can result in eligibility for offsetting of levies by way of cuts in employers’ National Insurance contributions and there is support available for such schemes. In addition, the Climate Change Agreements apply to industries such as ceramics, cement, glass and steel which can receive an 80% discount.
Most of the relevant industries have concluded their Climate Change Agreements allowing companies involved in those areas to claim their 80% discount in return for meeting energy efficiency or carbon saving targets featured in the relevant agreement. If you wish to find out about an agreement for your industry, contact your industry association for more information. It is possible for companies which are not members of their trade association to join the agreement without joining the trade body.
More information on Climate Change Agreements and the Climate Change Levy can be found at the DEFRA website.
