Your Step-by-Step Guide to Getting a Climate Change Agreement.

If you work in an energy intensive industry such as manufacturing, and are subject to the Climate Change Levy (CCL), agreeing to a Climate Change Agreement (CCA) can substantially reduce your costs.

Keep reading to find out how to set up a CCA and what your responsibilities are under it.

What is a CCA?

A CCA is a voluntary agreement where you commit to reducing your carbon emissions in exchange for a discount on your CCL.

To receive the discount, you must achieve an energy-saving target set for a two-year period. This target is set by the government and your industry sector and tailored to your specific needs as a business.

This discount can be up to 92% on electricity and 89% on gas, so putting a CCA in place can offer a significant saving.

How to Set up a CCA

The new CCA year starts on 1 January 2026, and applications are open from 1 May to 31 August 2025. This means you only have a few months to express your interest.

Here’s how to get started.

Step 1: Determine Your Eligibility

Before you begin your application, you need to determine if you’re eligible for the CCA:

1. You need to be subject to CCL charges, with no exemptions
2. You need to run a process that is eligible for the CCA. You can find out more about the eligible processes in Appendix A of the Climate Change Agreements operations manual

Step 2: Get in Touch With Your Industry Sector Association

The next step is to get in touch with your industry sector association. Your sector association will guide you through the application process and submit your application to the Environment Agency (EA) on your behalf.

Step 3: Prepare Your Application

You will have to submit a series of documents to support your application. This will determine your eligibility, a baseline of your energy use, and the targets you need to achieve.

Your industry sector association can’t complete your application for you, but they will answer your questions and check your documents before submitting them – they want you to get the discount!

Information you will need to provide includes:

• The name and contact details of your facility. You will also need to nominate a ‘responsible person’ who will be in charge of your CCA, and an administrative contact who will be the main point of contact
• A summary of your process which shows you’re eligible for the CCA
• A description of your manufacturing process
• A process flow diagram
• An annotated site plan
• Information about your directly associated activities and the equipment you use (i.e. those not linked to your manufacturing process, but which aid it)
• The proportion of energy consumed by your processes
• 12 months of consecutive energy data (for the 2026 reporting period, you will need to use 2022 as your baseline)

Once this is submitted, the EA will review your application – in our experience, this takes between four to six weeks, or longer if the EA has any queries.

The EA will then either accept or reject your application. If your application is rejected, the EA will explain why. You won’t be able to appeal the decision, but you’ll have the chance to reapply during the next application window.

If your application is accepted, the responsible person must assent within 20 days – bear in mind that this assent is legally binding. Once this is done, you can claim your discount.

Then you need to fill in a PP11 form (this goes to your energy supplier/suppliers) and a PP10 form (this goes to the HMRC) to get started. These forms are valid for five years, but you may need to resubmit them if your circumstances change.

Step 4: Pay Your Fees

Once your CCA is approved, you’ll need to pay an EA fee of £185 per year per site (i.e. per building which is covered by the CCA).

You must also pay a joining fee and annual fee to your industry sector association – this covers the administration in managing your application.

The fees vary by association – most associations offer a sizable discount if you’re a member.

Step 5: Measure and Submit Your Energy Saving Efforts

The CCA year runs from 1 January 2026 to 31 December 2026. You need to submit your performance report to your industry sector association by 1 May 2027, which will submit it to the government on your behalf.

This report needs to show that you’ve achieved your targets, and detail how you’ve done this.

There is a ‘buy-out’ mechanism where you can buy CO2 allowances to offset the extra CO2 you emit. This means you can still get your discount if you fail to meet a target.

It’s important to be accurate when reporting your energy use as incorrect information can lead to auditing and potential penalties. Energy monitoring software is vital in ensuring you report the right information.

If I Already Have a CCA in Place, Do I Need to Apply Again?

Yes. Existing participants need to reconfirm they still meet the eligibility criteria.

What Happens if My Circumstances Change?

If you’re partway through a CCA and your circumstances change, for example, you buy a new site or significantly change your processes, get in touch with your industry sector association. You need to do this within 20 working days of the change taking place.

They will be able to advise if your CCA needs to change and make the change on your behalf.

If you change energy suppliers, you must fill in a PP11 form and send it to them so they know you have a CCA in place. You must also send a PP10 form to the HMRC.

Need Help With Your CCA?

If you’re eligible, it’s definitely worth applying for a CCA. There’s a little extra paperwork, but the relief you can claim on your CCL is worth the effort.

Plus, you’re playing your part in reducing global carbon emissions.

Your industry sector association is there to help you through (and during) the process, but we’re here to support you too. We can help you determine your initial eligibility, put energy measuring initiatives in place, and ensure your reporting is as thorough and accurate as possible.

Click here to find out more about the CCA application process.