You should prepare now for the new Climate Change Agreement Scheme, writes CCF deputy chief executive Tom Southall.
While energy prices have at least stabilised for the time being, they remain significantly above pre-2022 levels and are by far the biggest cost for cold storage businesses, along with labour costs.
Despite the cost of electricity in cold storage almost tripling between 2021 and 2024 to an estimated £1.2bn, there has been little additional support for businesses to manage this increase. This makes the Climate Change Agreement Scheme (CCA) for cold storage more critical than ever for cold chain operators.
In place since the early 2000’s, the Cold Chain Federation- administered CCA currently includes around 420 frozen and chilled warehouses. It saves the industry more than £11m per year in discount on their climate change levy (an environmental charge applied to non-domestic energy bills).
In return for this discount businesses sign up for relative energy efficiency targets, a commitment to reduce the amount of energy they use in their operation per unit of production (usually m3 of cold storage space). While businesses are judged on the performance of their specific sites, as a collective the cold storage sector has performed well, hitting every target set by the government – although it has been getting much harder in recent years due to the need to find continuous improvements.
Results from 2024
The CCA results for 2024 are still in draft, but the indications are that for the first time the collective industry did not quite meet the energy efficiency target set by government of a 10% reduction on a 2018 baseline year (the sector achieved 9.7%). However, it should be noted that more than 75% of sites did
report an energy efficiency improvement.
Although on the face of it this is disappointing news, it’s not really a surprise and with crucial government investment grants like the Industrial Energy Transformation Fund seemingly coming to an end, the CCF will be using the result to campaign for more capital support for energy efficiency investments.
For businesses in the scheme, tougher energy efficiency targets increase the likelihood of facing a carbon buy out – that is repaying some of the levy savings if they miss them. However, the CCA is an incentive driven scheme with the levy discount almost always greater than any buy out payable. To put this into context, in the last two years the industry has saved £23.4m, while having to repay about £1.5m for missing efficiency targets. The CCA remains an extremely beneficial scheme for industry.
A new scheme until 2033
Periodically the CCA Agreement Scheme is renewed for a longer duration. Last year the government confirmed it would be extending the scheme again, with a ‘new’ CCA starting from 1 January 2026 and running until at least March 2033. This is great news for operators, who will continue to receive this crucial
discount on their bills for the foreseeable future.
But there are some important changes for operators to note:
- A new ‘baseline year’ from which efficiency will be measured as of 2022
- New energy efficiency targets across the 2026-2030 period which have yet to be confirmed
- An end to ‘bubbling’ (grouping) of sites: all sites will report as individual cold stores
- A requirement to report on energy efficiency improvements made
Register your sites
A fresh scheme brings an opportunity to register new cold stores. The government is accepting applications from now until the end of August. To be eligible, your cold store must:
- Be operational by end of August 2025.
- Use at least 500,000kwh of energy annually for cold storage operations.
Head to the CCF website for more information or email the CCA Helpdesk at cclevy@jacobs.com to apply.
