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 current 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.

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%

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 Started October 2003
The second Milestone year (CCL Year 5) started 1st October 2003!

Now is the time to plan your strategy for meeting your second milestone target! If you think you may fail your next target you should consider now whether to apply a risk management option or purchase CO2 Allowances – they can be bought at any time and stored in your emissions trading scheme accounts until you need them! Please contact the CCL Help Line for further details.

You should also 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
Feedback reports on your CCL Year 4 performance are now being issued. CCL Year 4 is not a milestone year therefore the result is only indicative of how you may perform at the second milestone which ends on 30th September 2004.

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."