The new Climate Change Agreement scheme has started, providing an extension to the Climate Change Levy rebate for energy intensive industries until 2023.
DECC says this will deliver an overall 11% energy efficiency improvement across all sectors by 2020. A total of 51 industrial sectors including steel, aerospace and farming have signed up across 9,000 sites.
The new scheme, which came into force on April 1st, shall provide an extension to the Climate Change Levy rebate for energy intensive industries until 2023 in return for meeting energy efficiency improvement targets. The Environment Agency shall administer the new scheme, providing a simplified and streamlined approach to administration for both Government and Industry.
The government says that if all the sectors meet their targets this will reduce emissions of carbon dioxide by 19 million tonnes; reduce primary energy consumption by approximately 100TWh and deliver an estimated saving to participants on the Climate Change Levy of £300 million each year.
According to DECC, these savings will be delivered through the implementation of cost-effective measures such as high efficiency motors, variable speed drivers, energy efficient boilers, improved energy management systems and process optimisation.
Participation in Climate Change Agreements is voluntary and is open to the most energy intensive industries. Eligible sectors can receive up to 90% reduction in the Climate Change Levy if they sign up to stretching energy efficiency targets agreed with Government. CCL discount for electricity under the CCA scheme increased from 65% to 90% from 1 April 2013.
Sector targets are set at percentage values energy efficiency improvement. They will be reviewed in 2016, with a view to assessing the progress made by each sector.
The target setting process used evidence templates completed by industry, setting out technological potential and what was cost effective to establish challenging energy efficiency targets for sectors which were realistic to deliver by 2020.
For more information, please visit the DECC website.