Climate Change Agreements (CCAs) are voluntary agreements between energy intensive industries and the Environment Agency. Under these agreements, businesses commit to reducing their energy usage and carbon emissions in return for significant cost savings.
These can reach up to 90% discount on the Climate Change Levy (CCL), which is a non-commodity charge added to every business energy bill.
CCAs were created as early as 2001, as part of the UK’s drive towards Net Zero. Following a 2023/24 consultation with CCA holders, the latest version of the scheme has been updated to cover the period from 2026–2030. Whilst not all details are available on the new scheme, CCAs are an attractive prospect for large-consuming businesses looking to reduce costs and consumption.
Key Climate Change Agreement Features
CCAs operate through a dual structure:
- Umbrella Agreements: Between the government and sector organisations.
- Underlying Agreements: Between sector organisations and individual site operators.
For the new 2026 scheme, existing CCA holders will also need to reapply. Existing CCAs will not automatically roll over. The initial window to do this should have run from May to August 2025, but has been delayed until further notice.
The regular application window will run from 1 January to 31 August every year, starting in 2026, on the new scheme.
The government is considering new sectors to take into eligibility, but any announced in the future will be unlikely to be able to join the scheme until January 2027.
Eligibility
CCAs are available strictly to businesses operating in a list of government-approved eligible sectors. These sectors have agreed formal CCAs with the Environment Agency in order to provide agreements to businesses operating in their industry.
The full list of CCAs is available in Annex A below.
53 sector organisations have agreed CCAs for their respective industries. They can be found here.
What Benefits Do Climate Change Agreements (CCAs) Offer?
For businesses, CCAs provide:
- Up to 90% discount on the Climate Change Levy (CCL).
- A mechanism to guide businesses on energy consumption and emissions reduction through targeted efficiency measures.
For the government, they are a useful incentive to drive the journey to Net Zero, tackling the country’s highest consuming buildings and operations.
New Climate Change Agreement (CCA) Targets (2026–2030)
The new scheme will operate over a series of two‑year target periods. The baseline year for target setting has been announced as 2022.
New CCA participants must apply within application windows. The current window should be ending on 31 August 2025, but this has been delayed until further notice.
The new targets for the new CCA scheme will be announced by the end of 2025.
“Buy‑out” fees are charged to businesses for missing targets. They will be reviewed periodically, with details announced closer to the scheme launch for 2026 onwards.
Reporting Requirements
CCAs have robust reporting and verification requirements that you must follow to maintain the agreement’s validity:
- Annual facility‑level reporting of energy usage and emissions data.
- Lighter‑touch annual declarations for the first year of each two‑year target period.
- Additional data captured via the Energy Savings Opportunity Scheme (ESOS).
- Business changes (such as site address or corporate structure) must be promptly communicated to the sector body and the Environment Agency.
- Audit frequency will be increased, and penalties for misreporting will remain as follows:
- The higher of £500 or £25 per tonne of CO₂e.
Additional compliance rules:
- Surplus performance can be carried forward between years of the new scheme.
- Surplus from the previous scheme cannot be carried forward.
- Energy Management Systems are not mandatory but highly recommended to make reporting requirements less onerous.
Application Process and Tips
Applications must be submitted via the relevant sector body. All eligible sectors have a designated sector association who holds the paperwork and application guidance required.
New entrants must apply within announced application windows.
Tips for a Strong Application:
- Maintain meticulous energy usage records for both eligible and ineligible activities.
- Be proactive about engagement with your sector association.
- Consult an energy expert if required, especially for complex sites with mixed activities.
- Stay informed about future windows for new entrants and changes announced for the scheme.
Final Thoughts
The Climate Change Agreements (CCAs) scheme is a useful incentive for energy intensive businesses who have highlighted energy costs as an area for improvement. The framework outlined in the scheme guides businesses to reduce costs and contribute to the UK’s journey to net zero. They are a good example of initiatives which can be both environmentally responsible and financially prudent.
They do require a pro-active approach to reporting and regular engagement with sector bodies, so any organisations considering a CCA should be clear on internal responsibilities or work with an energy consultancy to ensure the relevant reporting and engagement can be managed.
Annex A: Eligible Sectors
| Aerospace | ADS |
| Aluminium | AFED |
| Agricultural Supply | AIC |
| Wallcoverings | AWM |
| Textiles and Textiles Energy Intensive | BATC and BATE |
| Cement | BCA |
| Ceramics | BCC |
| Calcium Carbonate | BCCF |
| Compressed Gases | BGCA |
| Egg Processing | BEPA |
| Glass | BGMC |
| Lime | BLA |
| Brewing | BLRA |
| Meat | BMPA |
| Geosynthetics Non-Woven | BNMA |
| Poultry Meat Rearing | BPC1 |
| Poultry Meat Processing | BPC2 |
| Plastics | BPF |
| Printing | BPIF |
| Tyres | BTMA |
| Foundries | CAST |
| Metal Forming | CBM |
| Chemicals | CIA |
| Timber Sawmilling | CONF |
| Paper | CPI |
| Cold Storage | CSDF |
| Data Centres | DATC |
| Dairy | DIAL |
| Mineral Wool | EUR |
| Food and Drink | FDF1 |
| Supermarkets | FDFS |
| Gypsum Products | GPDA |
| Kaolin and Ball Clay | KABC |
| Malting | MAGB |
| Metal Packaging | MPMA |
| Bakers | NAMB |
| Non-Ferrous Metals | NFA |
| Pigs | NFU1 |
| Horticulture | NFU4 |
| Eggs and Poultry Meat | NFU5 |
| Semiconductors | NMI |
| Packaging and Industrial Films | PIFA |
| Surface Engineering | SEA |
| Spirits | SEEC |
| Surface Engineering Heat Treatment | SEHT |
| Slag Grinding | SGS |
| Motor Manufacturing | SMMT |
| Laundries | TSA |
| Leather | UKLF |
| Rendering | UKRA |
| Steel | UKSA |
| Wood Panels | WPIF |
