About the Scheme
The Climate Change Levy (CCL) is a tax charged on gas, electricity, LPG, coal and coke used by businesses in the UK.
A tax discount is available for businesses in a number of specific energy-intensive sectors and those with environmental impact. It is given in return for meeting agreed energy efficiency targets. Horticulture, pig and poultry production are the three qualifying sectors in the NFU CCL Scheme.
The NFU is the trade association responsible for the horticulture, pig and poultry CCL schemes. NFU Energy administers the scheme for the NFU and provides expert help and guidance to members of the scheme. We currently represent some 700 farm and nursery businesses.
Since the 01 April 2020, the discount on CCL has been 92% for electricity, 77% for LPG and 83% for gas, coal and coke. The discount for gas, coal and coke only will increase each year until reaching 88% in 2023.
In order to receive the CCL discount, you have to:
- Sign a Climate Change Agreement - a legal agreement between you and the Government that commits you to meet future energy efficiency targets.
- Return energy and production data at set intervals to prove that you are actually achieving these targets.
Should you miss your targets, you can either leave the scheme or pay to compensate for the amount of carbon you have emitted over and above your energy target.
Our service is made up of two parts:
- Initial registration – this covers setting up your Climate Change Agreement (CCA) for you with the Government’s agents, the Environment Agency (EA), and collecting and registering the relevant data and all other supporting material with them. A transfer of CCA to a different legal entity is also considered an “initial registration” which is paid when setting up a CCA.
- Annual membership – this provides:
- Collection of annual energy use and production data from you.
- The processing of the data you provide into a format that is needed by the EA for submission and comparison with your CCA targets.
- At each Target Period end, information about your performance against your target. This will include details about your carbon dioxide surplus or deficit and whether you need to make a buyout payment to remain in the scheme.
- Guidance and advice on compliance with the requirements of your CCA.
- Processing of changes to your CCA with the EA.
- In the event of an EA audit of any facility covered by your CCA, summary data of the information that we have previously submitted to the EA on your behalf.
- The collective represent ion of the interests of all the NFU’s CCA holders. This happens whenever changes or modifications to the CCA framework are proposed and when regular reviews of targets and compliance requirements take place.
Details of the service level agreement can be found here.
Fees are payable per site as follows:
- Registration fees – paid when setting up a CCA.
- Annual fees for the NFU CCL scheme service.
- Annual EA administration fees.
- Transfer of site to another legal entity.
We will provide you with a formal quotation detailing the costs and benefits of the scheme after we have received your completed new entrant quotation request form. VAT is charged at the prevailing rate on the first two fees, but not on EA fees.
|Fee per site|
The annual fee covers the support provided by NFU Energy. Fees cover a financial year (April to March inclusive) and are invoiced in advance in April each year. The fees are revised annually. The fees for 2017/18 and 2018/19 are:
|Horticulture, based on energy use per site||Horticulture, based on energy use per site||Horticulture, based on energy use per site||Pigs and poultry per site|
|Charge rate (p/kWh)||Minimum fee||Maximum fee|
Environment Agency (EA) fees
In addition to the NFU fees, the EA also charge an annual administration fee of £185 per year per site registered on the CCL scheme. The EA fee covers a calendar year (January to December inclusive). To reduce costs, NFU Energy collects the EA fee on their behalf. This means that NFU Energy will collect both fees, once a year, in April. Please note the EA do not make any reimbursements for part year membership. So, if you have a CCA at any point in a year, you are liable to pay the EA fee for that year for each site listed in the CCA.
Climate Change Agreements are voluntary agreements between the Government and operators. They contain targets to reduce energy consumption. If you want to claim Climate Change Levy (CCL) discount, you have to join the scheme applicable to the sector you are in and enter a Climate Change Agreement (CCA) which commits you to reduce your energy use.
The current schemes run from 1 April 2013 to 31 March 2023 and apply to 51 industry sectors, including the 3 sectors for which the NFU are the trade association: pig production, poultry production (including eggs) and horticulture.
Once you enter into a CCA, you must meet your energy efficiency targets to keep your CCA and continue to receive CCL discount.
The targets are set for your sector – horticulture, pig or poultry – and are applied equally to all participants in that sector. The overall reduction target must be achieved by 31st December 2020. Progress towards the overall target is assessed every 2 years over four ‘target periods’ ending 31st December 2014, 2016, 2018, and 2020 – compared with a ‘base year’, which for most operators is 2008.
You have to report your energy and production data for each of the target periods to show whether or not you have achieved your target for the period.
If you don’t achieve your targets, you have the option to either:
- Leave the scheme and stop receiving the discount or
- 'Buy out’ your shortfall and remain in the scheme.
The ‘buy out’ option means you make a payment to the Government within 6 months of the end of the target period, calculated by converting the extra energy you used (over and above your target) into tonnes of CO2 emissions and then paying £14 for each tonne.
The target reductions in energy use to be achieved by 31 December 2020, compared with 2008, are:
- Horticulture 14%
- Pigs 22.7%
- Poultry 17.9%
Progress towards the overall target will be measured over the four 2-year target periods and compared with 2008 performance.
Targets reductions compared with 2008 for each target period are:
|Target period ending||Horticulture||Pigs||Poultry|
|31 Dec 2014||7.0%||11.4%||9.0%|
|31 Dec 2016||9.3%||15.1%||11.9%|
|31 Dec 2018||11.7%||18.9%||14.9%|
|31 Dec 2020||14.0%||22.7%||17.9%|
Operators whose ‘base’ year is later than 2008 will have their targets proportioned in line with the more recent base year.
Energy efficiency is expressed as units of ‘specific energy consumption’ (SEC), defined as “The amount of energy consumed per unit of activity.” This allows different time periods, businesses or sites to be compared.
A SEC value is calculated for your base year along with a target SEC value for each target period.
- For horticulture, the SEC is typically kWh/m2 or kWh/kg, whichever is the most appropriate for the type of crop grown.
- For pigs and poultry, the production live weight measured in kg or dozens of eggs is typically used so that the SEC is measured in kWh/kg or kWh/doz eggs.
- Multiple products, each with their own SEC, can be accommodated too.
- This can be complex, but the reporting procedure is designed so that you do not have to be aware of the complexity, while guidance is available to explain how the calculations in the background work .
Not all of you use on your site will be eligible for CCL discount. A site consists of everything within a boundary where all energy crossing the boundary can be measured, regardless of who pays for or uses it.
So for instance with poultry, ventilation and heating of poultry buildings are eligible, but energy used in an office or workshop is not. Fortunately, you are allowed to have up to 30% non-eligible energy use and still have the entire site covered by a CCA to get CCL discount on the total energy supplied.
The processes that are eligible under the NFU CCL scheme are defined as follows:
At an installation or site where (in controlled, environment–protected structures) horticultural crops are grown, harvested and receive primary preparation for market: planting, seeding, heating, lighting, ventilating, irrigating, fertilising, cooling, preparing and sterilising growing media, grading and conveying.
Ineligible areas might be: domestic house, garden centre, office, staff accommodation and other staff facilities.
A facility belongs to the pig farming sector if it is a facility which is specifically used in indoor pig production.
Ineligible areas might be: domestic house, farm shop, office, staff facilities, feed preparation system not directly connected to buildings, other agriculture.
|Eggs and poulty meat|| |
A facility belongs to the NFU poultry meat sector if it is a facility which is specifically used for rearing poultry for the production of meat. And/or a facility belongs to the egg production sector if it is a facility which is specifically used for rearing poultry for the production of eggs.
Ineligible areas might be: domestic house, farm shop, office and staff facilities, and feed preparation system not directly connected to buildings, egg packing area and other agriculture.
In order to join the scheme, you must complete and submit a Facility Eligibility Form which includes a description of your ‘manufacturing’ process and detailed plans of your site including your eligible process and its directly associated activities as well as other site activities that use energy.