UK Government extends the Climate Change Agreement scheme by two years

Rishi Sunak, Chancellor of the Exchequer Rishi Sunak, Chancellor of the Exchequer

The announcement of the UK Government’s tax and spending plans for 2020/21 saw the government’s plan to raise the Climate Change Levy on gas in 2022-23 and 2023-24.

To encourage businesses to operate in a more environmentally friendly way, the government said it will also be extending the Climate Change Agreement scheme by two years.

The Budget announced a Carbon Capture and Storage (CCS) Infrastructure Fund to establish CCS in at least two UK sites, one by the mid-2020s, a second by 2030.

To encourage more environmentally-friendly ways of heating homes and other buildings, the Chancellor of the Exchequer Rishi Sunak added it will also introduce a Green Gas Levy to help fund the use of greener fuels.

A Climate Change Agreement (CCA) is a voluntary scheme, a negotiated arrangement between UK operators and government, with the dual purpose of protecting energy-intensive sectors subject to overseas competition whilst driving improvements in energy efficiency.

Participants are eligible for a discount on the Climate Change Levy (an energy tax) in return for meeting efficiency targets. The CCA scheme has been in place since 2001, its second phase running from 2013 to 2023.


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The data centre sector joined the scheme in July 2014 and there are currently over 150 participating sites.

techUK were amongst the companies that campaigned for the Climate Change Agreement to be continued and for the scheme to be open to new entrants.

“We are delighted that the Chancellor has announced that the scheme will be reopened and that it will be extended for a further two years,” said a spokesperson at techUK.

“While we would have preferred a longer extension to provide greater certainty for our operators, this is very welcome news indeed.

“It demonstrates that the UK government recognises the importance of our digital infrastructure and aims to provide a business environment in which our operators can thrive.”

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