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AIC welcomes on-going commitment to Climate Change Agreements

aic

The Agricultural Industries Confederation has welcomed the Governments announcement, that Climate Change Agreements (CCAs) for intensive energy using companies will be extended to 2023, as a significant step forward in helping the agricultural and food industries address climate change challenges.

In the few weeks running-up to the budget, AIC together with the British Beer and Pub Association, Dairy UK, Food and Drink Federation, Maltsters Association of Great Britain, NFU and the Scotch Whisky Association, had been concerned about the future of CCAs. Together, they jointly signed letters to the Secretaries of State for BIS, DECC, DEFRA and the Treasury to quantify the consequences of significantly increased costs associated with the loss of CCAs and the loss of incentive promoted by the schemes. The letter called for urgent action at the highest level to prevent a budget commitment from which there could be no turning back.

The trade bodies argued that discontinuing the sector agreements for reducing carbon emissions would be at odds with the Governments growth agenda and its recent recognition of the strategic importance of UK agriculture and the food supply chain.

Food chain businesses, such as the feed compounding sector of AIC, already face spiraling raw material costs and the loss of CCAs would have further added to this burden, says Jane Salter, Head of AICs environmental policy.

Climate Change Agreements have been extremely effective in encouraging energy efficiency at feedmills. In particular, they have facilitated open exchange of data and best practice for the common good.

Given the extended life of CCAs, AIC is now more positive about the forthcoming consultation, which should set a long term strategy for CCAs through to 2023.

 

  • Participation in Climate Change Agreements enables feed and food processors to claim a rebate from the Climate Change Levy which is worth 70m per annum in exchange for reductions in energy consumption.
  • Exclusion from Climate Change Agreements also means that feed and food processors will have to contribute to the Climate Change Commitment Energy Efficiency Scheme which will add another 150m to energy costs.
  • In December the government consulted the Climate Change Agreement Sector Associations on the future of the scheme, proposing 4 options for further discussion. The Department of Energy and Climate Change published the outcomes of the meeting in the Review of the future of Climate Change Agreements report available from the departments website.
  • The current CCA scheme ends in March 2013. The Government announces that the CCA scheme will be extended to 2023 and the 54 participating sectors will continue to be eligible for the scheme. http://www.hmrc.gov.uk/budget2011/tiin6125.pdf. A Department of Energy and Climate Change (DECC) consultation on options to simplify the scheme will be published by summer 2011.

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