Reading, UK: Government must continue with its Climate Change Agreements (CCA) scheme that has seen the cold storage industry improve energy efficiency by nearly a fifth and saves the industry £10m a year in tax, says the Cold Chain Federation.
Responding to a consultation about the future of the scheme the federation warned ministers against making unnecessary changes to the qualification criteria.
Cold stores qualify because they are ‘energy intensive’ while other industries benefit because they are ‘trade intensive’, which means they face competition from businesses ‘offshoring’ facilities if the taxation in the UK is set too high. Energy intensity remains the main consideration to avoid any risk that a vital industry like cold storage is deemed insufficiently ‘trade intensive’, the federation said.
Tom Southall, policy director, Cold Chain Federation, said: “The current CCA scheme is working well, encouraging energy efficiency improvements while still protecting competitiveness especially for energy intensive sectors. The cold store operators signed up to the CCA smashed the collective target set for them and there are now more than 450 cold storage facilities participating. The tax savings from the scheme are also vitally important at a time when so many factors are forcing up energy costs.
“The purpose of the scheme is to incentivise energy efficiency and it is energy intensive sectors such as cold storage which offer strong energy efficiency improvement potential. We are impressing upon government that the new CCA scheme should continue to base eligibility on energy intensity rather than shift the balance towards trade intensity considerations, which would undermine this momentum and lead to perverse decisions about what types of facility should be able to participate in the scheme and which are not.”
The federation’s submission also calls for a scheme length of around 10 years to allow ambitious targets to be set while offering enough incentive to join the voluntary scheme; and for the target type to remain ‘relative energy’ and not the proposed ‘ratio relative / novem’ type as the current system works well and ratio relative targets could increase the administrative burden on operators.
It also highlights the federation’s concern that the timescale for renewing the scheme is tight. Southall said: “There is a great deal to fit in before the scheme would be ready, including another consultation and target negotiation. It will be challenging to have it all up and running in time for January 2023, which is required to retain the continuity of the scheme. The Cold Chain Federation will continue to engage with government to represent cold storage operators and we will keep CCF members updated as the proposals develop.”
