New PP10 & PP11 Supplier Certificates

There has been an important change to the guidance given by Customs on the validity of your Customs forms PP10 and PP11. Completed PP10 and PP11 forms are only valid for a period of five years.

This only has immediate consequences for any sites that have had a CCA in place since April 2001 and have been with the same energy supplier. Under these circumstances these sites will now need to complete new PP10 and PP11 forms.

If you have submitted new PP10 and PP11 forms within the last five years (e.g. because you have changed energy supplier) you do not need to take any immediate action. You may need to take action in the future if your forms have not been revised for five years.

Links to the updated Customs guidance note and the PP10 and PP11 forms can be found below:

Guidance Note CCL1/3

PP10

PP11

2006 Budget Report - Climate Change Levy to increase in line with Inflation from 1 April 2007

The 2006 Budget sets out the next stage in the Government's strategy for tackling the global challenge of climate change and outlines an increase in the climate change levy in line with inflation, from 1 April 2007. This is to continue to encourage energy efficiency in the business sector.

The new rates, effective from 1st April 2007 will be:

Electricity: 0.441 p/kWh  up from the existing rate of 0.43 p/kWh

Gas: 0.154 p/kWh up from the existing rate of 0.15 p/kWh

LPG: 0.985 p/kg up from the existing rate of 0.96 p/kg

Coal: 1.201 p/kg up from the existing rate of 1.17 p/kg

Defra Announces Sector Results for Milestone 2

Please click here to view the sector results on Defra's website.

Claiming Back Lost CCL Discount

HMC&E have announced that any site with a CCA that has lost CCL Discount due to a change in supplier, change in company ownership or an administrative oversight, will be allowed to claim back the CCL Discount that has been lost.  For more details please see Information Sheet 44.  If you have any queries regarding this issue you must contact HMC&E directly on 0845 010 9000.

New PP10 and PP11 Forms from HM Customs & Excise

The new supplier certificates will be available on the HMC&E website from 15th March 2005 and must be used from this date.  You only need to resubmit your PP10 and PP11 forms if the information on your currect forms is incorrect and needs updating, for eg. if your supplier details have changed or the percentage discount that is being claimed.

Milestone 2 reported to Defra February 2005

The individual site results for Milestone 2 have been reported to Defra.  We are now waiting for Defra to release the sector results and will post them on the website as soon as they are available.

September 2004 - Issuing of 2nd Milestone (CCL Year 5) Data Collection Forms

Data collection forms reporting your 2nd milestone year's performance have been issued to all sites.  If you have not received your form please contact the CCL Help Line as soon as possible.

The deadline for returning the completed forms is 12th November 2004.  For electronic copies of the forms please click here.

Summer 2004 issue of CCA Newsletter

For copies of the CCA summer 2005 newsletter please click here.

Autumn 2004 Training Courses

For details of our Autumn 2004 training courses please click here.

Changing Currency

Defra have re-issued their paper CCA05 detailing the methodology for changing currency.

The CCL Discount Scheme have produced Information Sheet 36 which outlines this methodology and a spreadsheet to help you calculate your new target profile in a new currency. This spreadsheet can be downloaded here .

Please note that Defra will not automatically agree to the new target profile calculated from the CCA05 methodology as presented in the spreadsheet. The new target profiles will be used as basis of negotiating the new targets with Defra.

If you wish to change your currency in time to change your Milestone 2 target, please complete the spreadsheet and email to: currency@cclevy.com no later than 27 July 2004. This deadline will be adhered to and no extensions will be given.

Latest Defra Papers

The latest versions of Defra papers CCA05 and CCA16 can be downloaded here:

CCA05 - Handling Structural Change

CCA16 - Varying absolute targets where output has dropped by more than 10%

Verification of Allowances

We are pleased to announce the launch of the third Enviros Group Verification Scheme to verify 1 st and/or 2 nd milestone performances. In the previous Schemes about 300 sites had their emissions verified.

CCA sites that beat their milestone target have the potential to generate "CO 2 allowances". When these allowances have been verified, they can either be

:

•  banked and used to meet future CCA milestone targets;
•  traded via the UK Emissions Trading Scheme.

The price of CO 2 allowances has recently increased by 100% and the price is currently around £4 per tonne of CO 2 . This price will be subject to normal market fluctuations and could increase or decrease.

CO 2 allowances can only be banked or traded if they have been "verified" by an accredited independent verifier. The verification process involves a review of energy and production data for the milestone year . Once the verification process is complete, the owner of the allowances can either trade or bank the allowances.

You may wish to join the third Enviros Group Verification Scheme if you wish to:

• have your data for the 2 nd Milestone Period verified (i.e. data for October 2003 to September 2004).
• have data for the previous Milestone verified (MS 1, October 2001 to September 2002). You may wish to do this if you beat the MS 1 target and have not yet had your ring fenced surplus verified.

Please note that verification is worthwhile even if you fail a milestone target. Undergoing the verification process is an independent check on your data to ensure that you have reported it correctly. During previous Group Verification Schemes we actually discovered that some sites actually passed when they thought they had failed!

Under the Enviros Group Verification Scheme most CCA sites can have CO 2 allowances verified for between £550 and £995 (the price depends on the number of CO 2 allowances). This is between 5 and 10 times cheaper than the cost for individual site verification.

In order to complete verification by December 2004 (which will enable you to trade any surplus at the 2 nd Milestone), it is essential we start the verification process early this summer. Please see Information Sheet 39 for further information and complete this fax back form to register interest. Please return the form as soon as possible and no later than 14th May 2004 .

Defra Proposals for New CCA Targets

You are probably aware that your CCA Agreement contains a clause that requires a review of targets in 2004 and 2008. Defra have recently issued a Paper, CCA 20, which presents the Defra 'starting point' for the 2004 negotiations. The paper can be downloaded from THIS website by clicking on the "2004 Target Renegotiation - Defra paper CCA20" text on the top right of this page.

The target review will not affect the current Milestone (MS2, October 2003 to September 2004) but it will lead to new targets for the remaining 3 milestones. The negotiations should be completed by September 2004 if everything runs to schedule.

Defra's starting point in the renegotiation is to increase the 3 rd , 4 th and 5 th milestone targets by approximately 5% or by the amount the Sector beat its first milestone target.

Defra are justifying their proposals on the basis that the MS1 performance across all 44 CCA sectors was better than expected (by an average of 5%) and that most sectors have found it easier to make low cost energy savings than they had indicated during the original negotiations in 1999/2000. Defra are also asserting that they "are not aware of operators making significant investment [in energy efficiency]" and they believe much of the original potential for savings still exists.

Defra have indicated that CCA20 is a starting point for negotiations. However, they have stated that if a sector wants a lower increase it will be up to the sector to explain to Defra why 5% is not achievable. Good evidence will be required to back up our case.

We welcome any feedback about the Defra proposal. In particular we are interested in receiving clear evidence of investments made since CCAs were introduced in 2001 and the energy savings such investments have achieved. Your feedback will greatly assist us in the target renegotiation process. Please email your feedback to enquiry@cclevy.com .

Timetable for Milestone 2 Reporting

The timetable for Milestone 2 together with a review of options for passing and failing sites is given in Information Sheet 38 . The key dates are summarised below:

10 September 2004 - 2 nd Milestone Data Collection Forms Issued

12 November 2004 - Deadline for Return of Completed Data Collection Forms

7 January 2005 - Deadline for Return of Completed Action Forms

If data is not returned before the specified deadline we cannot guarantee to process and submit your information to Defra and your CCL Discount will be put at risk.

Options for Sites Failing the 2 nd Milestone Period

The 2 nd milestone period ends on 30 September 2004 ; less than six months away. If you are likely to fail your 2 nd milestone target you may need to take action now. Please find below an important reminder on two of the options available to those failing their targets.

Product Mix and Output Algorithm (PMOA)

If you are intending to use the PMOA at the 2 nd milestone you must submit a pre-approval document to Defra before 30 June 2004 . If you would like the Discount Scheme to review your submission before it is sent to Defra please make sure you submit the document no later than 18 June 2004 .

Purchasing CO 2 Allowances

The price of UK Emissions Trading Scheme CO 2 Allowances increased last week from around £2/tonne to £4/tonne. For Milestone 2 compliance you can purchase CO 2 Allowances at any time until 7 January 2005 , for more information please see Information Sheets 33 (a revised version will be available shortly) or contact the CCL Help Line. Remember, if you need to buy CO 2 or are likely to pass and want to be verify your CO 2 Allowances, you must set up a Trading Account and Compliance Account on the Emissions Trading Registry website (etr.defra.gov.uk). This also can be done at any time. Please see Information Sheet 32 for more information.

If you have CO 2 Allowances to sell please contact the CCL Help Line who may be able to put you in contact with a buyer.

2nd Milestone Year Starts October 2003
The second Milestone year (CCL Year 5) started 1st October 2003! Now is the time to make sure that your methods of recording energy and production data are accurate. Defra have been concerned by the amount of incorrect data being identified during random audits and the number of requests to amend data being submitted to the help line. Please ensure that you keep good energy and production records. For guidance on what is required of data collection and data auditing, please refer to Information Sheet 23.

Reporting of CCL Year 4
The data collection forms for CCL Year 4, which ended on 30th September 2003, have been issued for completion. These forms must be returned by 14th November; we will then issue a feedback report of each sites performance within a couple of weeks.

This year’s forms have changed slightly from the previous years as we are now asking for meter readings for electricity and gas. This is not a mandatory requirement but we do recommend that meter readings are submitted as it will improve data quality and give DEFRA more confidence in your annual consumption. It is interesting to note that 93% of the total energy reported to the CCL Discount Scheme is electricity and gas.

Please ensure that the data you submit on the data collection forms is as accurate as possible. When we process your data we compare the energy and production values against those of previous years to identify rogue data. This year we will be carrying out new tests to check your data – if your CCL year 4 data looks suspicious, we will send you a report identifying where errors may have been made. We will not process your data further until you have either corrected the data or confirmed the validity of the original information.

Update from DEFRA
We continue to wait for guidance from DEFRA about procedures relating to changing currency, bubbling or unbubbling of sites or changing risk management option. We have received numerous requests from companies to make such changes, however, without clarification from DEFRA about the exact procedures we cannot undertake such changes at the present time. As soon as further guidance is issued by DEFRA we will contact all the companies who have requested for changes to be made.

Product Mix and Output Algorithm (PMOA)
At the first milestone about 7% of sites who failed their target used the PMOA to maintain their CCL discount. If your site has changed in an adverse way, for example if your production has fallen or your product mix has changed, then the PMOA can be applied if you think you will fail your second milestone target by a significant amount.

To use the PMOA at the second milestone you must submit a pre-approval document by 30th June 2004. For further information please see the PMOA section of the website where you can download guidelines and case studies. We are also hoping to re-run the PMOA training course early next year; for information on this course please see the Training section of the website.

Verification of Ring Fenced CO2 Allowances
Enviros have just completed a second Group Verification Scheme for sites who chose to verify their surplus CO2 from the First Milestone. Please see the Verification section for further information.

95% of Sites Re-Certified after Milestone 1
Following the first Milestone, 95% of sites were re-certified for a further 2 years of CCL discount. Sustainable Energy Minister Lord Whitty said, "This is good news for business and good news for the environment. Industry has shown that it is prepared to play its part in the effort to reduce greenhouse gas emissions. The results of our agreements demonstrate real gains in energy efficiency, achieved in a cost-effective way."