What you need to know about CCA Phase 3

Whilst 2025 is essentially a free or “fallow” year of CCL discounts without targets in place, Phase 3 is fast approaching with updates which may have some implications:

Eligibility

Businesses will need to demonstrate that they still meet the eligibility criteria and opt-in to the new scheme (at the time of writing the window for entry is still to be confirmed). Updates to the criteria as outlined here could impact ability to qualify.

Targets

Businesses will face stricter energy efficiency and carbon reduction targets aligned to the UK’s net zero goal. There will also be a new baseline of 2022 instead of 2018.

Savings Assessment Tool (SAT)

The scheme includes a Savings Assessment Tool (SAT) which facilitates annual reporting and is designed to help organisations estimate and document their energy and carbon savings. The next phase will require updates to the required information including:

• 2022 baseline data.

• Under the new scheme, targets will be set up differently, using the NOVEM method of energy allocation, which allows for more accurate reporting of a facility’s energy performance when production volumes or energy intensity vary between products.

• Targets will be split between fixed and variable energy use and require operators to declare their proportions of each (and, where applicable, also between product categories).

• Combined Heat and Power (CHP) reporting methodology changes which will include disclosing the proportional split between fuel for heat and fuel to generate electricity.

• Facility-level reporting – all reporting will need to be conducted at facility level, with the ability to group sites under a single target no longer permitted.

• Businesses will also need to report on potential energy savings, including from adopting renewables and savings from switching to CHP. Otherwise, from all planned efficiency projects.

Performance Account Template (PAT)

A mandatory requirement, the PAT is a standardised document, required at the end of each Target Period, to report on progress of a company's energy actions.

There will be a new requirement to report annual mid-target energy and production data in addition to target period end data.

The requirement will be to submit an updated Performance Account Template alongside the Target Period end data in the first quarter of the following year, specifically in the following timeframes:

Feb/Mar 2027 – submit for Phase 3 Target Period 1

Feb/Mar 2029 – submit for Phase 3 Target Period 2

Feb/Mar 2031 – submit for Phase 3 Target Period 3

CCA Phase 3 Timeline

CCA Phase 3, when incorporating both Target Periods and Certification Periods, will run from January 2026 until March 2033. The below table outlines the full timeline.

Article by Mark Earnshaw