The government launched a discussion paper on 5 August to inform a decision on whether the buy-out price for target periods 3 and 4 of the Climate Change Agreements (CCA) scheme should be adjusted.

Climate Change Agreements (CCAs) are voluntary agreements made between UK industry and the Environment Agency to reduce energy use and CO2 emissions. They were established to allow energy intensive businesses to reduce the cost of the Climate Change Levy (CCL) standing charge on their electricity and gas bills.

The department said that it was minded to increase the buy-out price broadly in line with the Retail Price Index to £14/tCO2e for target periods 3 and 4; however, further options being considered include increasing the price to £17/tCO2e, and retaining the present price of £12/tCO2e. The government argued that its preferred option would provide a strong incentive to abate while also being mindful of the financial impacts on participants.

Responses are invited by 23 September.

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