Potential Business Savings through the BPF’s Climate Change Agreement

The Climate Change Agreement for the Plastic Sector is managed by BPF Energy, a wholly owned subsidiary of the British Plastics Federation (BPF). The Climate Change Agreement scheme is a voluntary agreement containing targets to increase energy efficiency in exchange for relief on the Climate Change Levy charges, formed as part of a package of UK government measures to respond to the challenges of Climate Change while helping the industry remain internationally competitive. The BPF has pushed energy efficiency right to the top of the UK plastics sector agenda, reinforcing the need for energy efficiency of products being one of the key benefits of plastics products in society today.

The Plastic sector Climate Change Agreement is now one of the largest of the 52 sector Agreements currently operating in the UK with well over 300 manufacturing sites in the scheme.  The scheme dates back to 2009 and has been responsible for saving many thousands of tonnes of CO2 emissions and as importantly many millions of pounds in savings on company’s’ energy bills.

The recent review of energy taxes operational in the UK revealed a complex web of obligations desperately in need of rationalisation.  

The Carbon Reduction Commitment scheme will be officially disbanded with effect from the end of the 2018-2019 compliance year.  In order to compensate for loss of this revenue the Government intends to increase the rates of the Climate Change Levy from 1 April 2019 to a proposed 0.847p/kWh for electricity and 0.339p/kWh for Gas.  However the Government has committed to increase the discounts available to members of the Climate Change Agreements so that the cost to industry will be neutral.  The CCL discount for electricity will increase from 90% to 93%, and the discount for gas will increase from 65% to 78%.  Additionally the government will retain the existing eligibility criteria for participation in Climate Change Agreement schemes until at least 2023.  Effectively CCL Paying businesses will have three years to make energy savings before the CCL increases will take effect in 2019, with Retail Price Index increases only from 2016 to 2018. 

As of January 2016 the administration of the BPF Energy Climate Change Agreements are now wholly in the hands of the British Plastics Federation who run a small tightly knit team to coordinate the input of energy usage data from scheme members to build a picture of energy efficiency levels across the whole sector for measurement against the energy saving targets applied by the Government.   The team is available to provide hands on advice and guidance in fulfilling the targets and equally on energy efficiency matters in general. 

The BPF Energy team will be out and about on April 13th in Birmingham where they will be staging a seminar on Climate Change Agreements and will update participants in the latest guidance and changes along with others interested in signing up on the status of the agreement in the current evolving legislation and in particular a look at what the future holds for the Climate Change Agreements and what companies need to do to meet the future targets.  If you are interested in attending or finding out more information about Climate Change Agreements visit www.bpfenergy.co.uk 
 
DECC have recently agreed to proceed with a review of CCA targets for all Sectors starting this year 2016 and the BPF will be actively lobbying the government on behalf of the BPF Energy Partners.
The response to the recent consultation can be found on the gov.uk website. The consultation response highlights the requirement for a simplified energy and carbon reporting framework for introduction by April 2019.
Over the coming months we at BPF Energy will be looking to engage actively with all BPF Partners to build an evidence pack to support our effort in renegotiating the BPF Energy CCA reduction targets.