What is a Climate Change Agreement?
A Climate Change Agreement (CCA) is an agreement for eligible energy-intensive facilities linking energy or carbon targets to reduced Climate Change Levy. HMRC lists a 92% electricity levy discount for qualifying agreement holders [S1]. That reduces the levy component, rather than the whole bill. Eligibility and reporting still need checking with your sector association. Checked October 2026.
What does a Climate Change Agreement mean?
A Climate Change Agreement (CCA) is a voluntary agreement linking an eligible energy-intensive facility’s energy efficiency or carbon targets to reduced Climate Change Levy (CCL) [S2], [S3].
Why it matters for your site: a levy discount changes the tax component used in your energy budget. It does not make all electricity use cheaper by the headline percentage [S1]. Read Climate Change Levy for business for the wider billing rules.
Who can qualify for a CCA?
Eligibility depends on the qualifying processes and facility boundaries. A large bill or a solar installation does not itself demonstrate eligibility. The statutory guidance requires the administrator to assess continuing eligibility [S3]. Ask your sector association to identify the process and evidence relevant to your premises.
Keep process descriptions, meter boundaries and energy records together. Check with your accountant before applying a reduced levy rate to a business case.
What is the current scheme status?
The Environment Agency lists target periods starting on 1 January 2026 and ending on 31 December 2030. The first runs through December 2026, with performance data due on 1 May 2027 [S2]. Those target dates do not establish that an application window is open for your facility.
HMRC lists electricity and gas levy discounts of 92% and 89% respectively from April 2026 [S1]. For an assumed £100 electricity levy before VAT, the arithmetic is £100 × (1 − 0.92) = £8 remaining. This illustrates levy relief only. Check with your accountant.
Next step
Use business electricity data for context, then explore your energy cost goal. Before adding solar or charging to your budget, establish the levy actually payable on the energy displaced.
Bring that evidence to get matched with an installer that covers your area.
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Common questions
Does CCA relief reduce the entire electricity bill?
No. HMRC's electricity discount is 92% of the Climate Change Levy component, not the unit price or the entire invoice [S1]. Check with your accountant.
What is the gas levy discount?
HMRC lists an 89% gas levy discount from April 2026 for qualifying CCA holders. It applies to the levy on eligible supplies [S1].
Who submits performance reports?
Agreement holders send their reports to the sector association, which submits them through the Environment Agency's digital service [S2].
What happens if a target is missed?
A buy-out fee may allow continued levy relief in the next certification period. Failure to pay by the deadline can result in decertification [S2].
Can eligibility be audited?
Yes. The regulator audits performance and eligibility. Incorrectly claimed levy relief may have to be repaid if the agreement holder is ineligible [S2].
Ask about your site
Sources
- Climate Change Levy rates, HM Revenue and Customs,Last checked 19 October 2026
- Managing a climate change agreement, Environment Agency,Last checked 19 October 2026
- Climate Change Agreements statutory guidance 2026, Department for Energy Security and Net Zero,Last checked 19 October 2026