AIC at 20: Gaining and retaining Climate Change Agreements for agri-supply businesses
As AIC marks 20 years as the UK agri-supply industry’s leading trade association, we're looking back at some of its greatest achievements since it was founded in 2003.
Each week throughout 2023, we’ll explore a major achievement where AIC represented its Member businesses, promoted the benefits of modern commercial agriculture in the UK, and supported collaboration throughout the food chain.
This week we review AIC's work to gain and maintain the benefits of Climate Change Agreements for Member businesses.
What are Climate Change Agreements?
Climate Change Agreements (CCAs) are voluntary agreements which energy intensive industries, including agriculture, make with the Environment Agency to reduce energy use and carbon dioxide emissions.
The Agreements were first introduced in 2001 alongside the Government’s Climate Change Levy – a tax on business energy bills – with the aim of driving down annual emissions by 2.5 million tonnes by 2010.
In return for signing up to a CCA a business receives a significant discount on the Levy, as well as helping the industry to cut its carbon emissions.
For more than a decade, AIC has lobbied in support of CCAs and the tax breaks afforded to agri-supply businesses such as animal feed manufacturers.
Discontinuation risks
In 2011, there was a risk that Climate Change Agreements (CCAs) would be discontinued along with their benefits.
Playing its part in a broad agri-food industry effort, AIC lobbied the Government to continue the scheme as it was in the best interests of the environment and businesses.
Subsequently, Ministers at the Departments for Business, Treasury, Energy and Climate Change, and Environment, Food and Rural Affairs recommitted to CCAs for a further 12 years to 2023 on the basis that they were in the interests of economic growth.
In addition, the Climate Change Levy discount on electricity for CCA participants was enhanced from 65% to 80% from April 2013 to further support energy intensive businesses which were exposed to international competition, including agriculture.
Winning further support
Over the years AIC has responded to numerous government consultations related to CCAs. A further extension to the scheme announced until March 2027, giving Members greater certainty.
It comes after AIC took Member views and responded on behalf of the agri-supply industry to the latest consultation.
This scheme extension is estimated to be worth nearly £300 million a year to the businesses which hold CCAs.
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Authors
Oli Hill
As Communications Manager, Oli creates and oversees the content published on AIC's website, emails, Member briefings, print publications, and social media.
