Climate Change Levy
UK's Drive to Reduce Emissions
Developed to increase energy efficiency in UK businesses, the Climate Change Levy
is a cornerstone of the UK's drive to reduce emissions of harmful greenhouse gases. Many qualifying businesses have the chance to gain exemption from up to 80% of the Levy by agreeing to meet tough targets for energy efficiency, reducing their own contribution to these emissions.
UPA already manages Climate Change Levy exemption for many major energy users. These exemptions are worth a total of over £1.0 million each year. As a proven partner
to many businesses, we can help you to manage and retain your exemption,
safeguarding your energy costs.
The Issues
If you qualify for exemption from the Climate Change Levy, you must ensure that your Climate Change Agreement is managed properly and meets the Qualitative Requirements of the scheme or you face the risk of losing your exemption. This
could increase your direct energy costs by around 10%.
The exemption to Climate Change Levy is granted by Custom & Excise and is officially
a Tax Reduction. Audits carried by DEFRA have revealed a lower level of effective management of Climate Change Agreements than expected. DEFRA have therefore increased the numbers of audits taking place. It is now even more important than ever
to make sure that your own Agreement is properly managed, reducing your risk of
losing your Levy exemption.
Why use UPA
UPA is a proven partner, managing Climate Change Agreements according to best practice processes developed with our many existing clients.
We provide a complete service including your initial Application for Exemption, if you do
not already qualify comprehensive Agreement Reviews to ensure that your Agreement
is effectively managed, ongoing Climate Change Management and Carbon Trading to
make sure you achieve your emissions targets.
Safeguarding Your Climate Change Levy Exemption
If you have a Climate Change Levy Agreement (CCLA) you have a commitment to achieve a certain energy efficiency improvements in return for your exemption from the Levy. Every two years you must meet milestones to ensure your exemption continues throughout the period of the Agreement.
The quantitative requirements of the CCLA can be managed by regularly reviewing your position against agreed targets. This is critical, particularly within the milestone year.
An annual submission of your position against targets is required under your agreement with the appropriate Trade Federation, with bi-annual submissions required by DEFRA.
The problem
Increasingly DEFRA are undertaking audits and finding that management of these important Agreements in not satisfactory.
Without an adequate record keeping system and a clear audit trail to justify your position, your business risks losing the exemption from the Climate Change Levy. This would directly affect your company's bottom line profitability.
DEFRA will renew CCL agreements for all participants within a specific Sector Association only if the sector meets its overall target. If the sector fails to meets its target, then individual companies with the sector must meet there individual targets to be re-certified.
Why use UPA
UPA are experts in energy utilisation and are already managing these important agreements on behalf of many companies, assisting in the retention of savings
from the scheme.
We will work with you to cost-effectively manage your CCLA for you, ensuring that industry best practise is applied. We have built up our processes by working consistently with major companies throughout the UK, helping them to achieve and retain exemption without the need for additional resource. Our fully outsourced solution delivers assured savings to your business.
UPA Deliverables
Evidence Pack
UPA will prepare and maintain a clear audit trail and records of your energy consumption and production information. This enables all parties to verify your information and for
your submissions to both your Trade Federation and DEFRA to be prepared efficiently. Your risk of failing any site audits is managed by us, using these evidence packs.
Climate Change Management Reporting
UPA will produce a monthly report showing your cumulative performance against your target. The report will also show the variance between actual production and energy consumed compared with your base year values.
Milestone Reporting Service
UPA will liaise directly with the relevant Federation and submit performance figures
on your behalf annually and bi-annually as required by your association.
Analysis of Risk Management Options
Recommendations as to the most appropriate risk management option will be made, dependent on production and base load forecasts. UPA can carry out the application
of these options if required.
Carbon Emissions Trading to meet your CCLA targets
If you are a party to a Climate Change Levy Agreement (CCLA), you will be committed
to energy efficiency improvements, within the timescales set by your Agreement.
These are expressed in terms of CO2 emissions, or Carbon Credits.
If your company has performed better than expected, you may be entitled to sell or bank CO2 allowances.
If you fail to meet your target, however, you will be in danger of losing your Levy exemption for 2 years unless you take steps to purchase sufficient CO2 allowances
or use another risk management option. Losing your exemption could increase your company's energy costs by up to 10%.
Why use UPA
UPA are experienced in buying and selling CO2 allowances, setting up the Compliance Accounts on your behalf where necessary. We will provide a full service to your company, allowing you to safeguard exemptions from the Climate Change Levy,
securing savings on your energy costs.
If you think your company may need to buy or sell CO2 allowances, or if you need more information about your Climate Change Levy Agreement, call Andrew Riley direct on
01565 658887 or use the Contact Us page.