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CCA deadline extended – But the clock is still ticking!

The CCA application deadline has now been extended by two months to 30th November 2020

5th August 2020

“The clock is still ticking” was one of 2019’s catchphrases – thanks to Michel Barnier from the European Union. But for some of our Energy Intensive Industries and Climate Change Agreement (CCA) participants, the dial has slowed down a touch thanks to the recent Government announcement and a further extension in the CCA deadline for new applications. The deadline has now been extended by two months until 30th November this year.

Amongst the other outcomes from the recently concluded BEIS consultation were

  • Baseline for targets: The baseline period is to be updated. Where discrete data for 2018 is not currently available, appropriately adjusted Target Period 3 (covering 2017 and 2018) data may be used instead to estimate a 2018 baseline.
  • Surplus will not be allowed to be brought forward to use in the added Target Period 5.
  • Buy-out price: This will increase as earlier proposed to £18/tCO2e for Target Period 5. Target Period 4 buy-out remains at £14/tCO2e.
  • Financial penalty price: There will also be an increase to the financial penalty price for penalties related to Target Period 5 in line with the buy-out cost per tCO2e for the appropriate target period; the financial penalty will increase to be the greater of £250 or £18/tCO2e.
  • Other aspects of the scheme: All other scheme rules and processes will be maintained for the purpose of this extension. A short window to make some specific amendments to agreements will be opened in 2021, with separate guidance to follow on this
  • Next steps and milestones for target setting and variations to agreements: In addition to extending the deadline for new entrant applications to 30 November 2020, the deadline for sector associations to submit counter proposals for target setting has been extended to 30 October 2020.
  • Future scheme: The Government will look to confirm a timeline for further engagement on the future of the CCA scheme shortly.

The tone of the consultation document would suggest that the Government is minded on delivering a new scheme to follow on from the end of the newly extended end date of March 2025. This will no doubt be good news for many of our hard pressed manufacturers working hard to control their cost base and seek to protect their business and return to a “new normal”.

Enabling Net Zero

However, in recent years some organisations may have lost sight of the overall policy intent of the scheme when it was first introduced. Rather than simply offering an opportunity for a tax break through lower Climate Change Levies, the intention was to equally provide resources to fund the organisation’s initial journey to a lower carbon economy and onward to net zero. Having a clear view of your sustainability objectives and well evidenced investment cases is key to ensuring that the resources made available through CCA involvement truly reap the rewards of improving your environmental performance.

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Inenco has worked with many leading CCA participants over the life of the programme and is well versed in maximising the opportunity and avoiding the pitfalls.

We can help to analyse the cost/benefit of scheme membership, assemble the required evidence pack, support through the application process and provide clear ongoing reporting and advise on timely corrective action if the risk of non-compliances arises.

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