U.K. Formalizes Extension of Tax-Break-for-Efficiency Plan

The U.K. government has formalized the extension of its Climate Change Agreement (CCA), under which cold storage operators can earn tax breaks for efficiency improvements for the next five years.

The government had originally announced in March that the CCA scheme would be extended until 2025 and reopened it to new applications. But the extension was pending a consultation with stakeholders that set out the government’s proposals for how the extension would be implemented. The government sought recommendations from April 16 to June 11 for its CCA, and on July 31 published the updated findings on its website.

A report summarizing the findings – “Government response to the consultation on ‘Climate Change Agreements: proposal for scheme extension and views on reforms for any future scheme’” – can be found here.

Cold Chain Federation, a U.K.-based trade group, welcomed the extension. “Convincing government to propose extending the scheme and reopening it to new facilities was an important result for our members,” said Cold Chain Federation Chief Executive Shane Brennan. “And I am pleased that this new report confirms the decision and sets a fast timetable for moving the legislative process forwards.”

Under the CCA, energy intensive businesses can earn a 90% tax reduction for electricity and a 65% reduction for gas, liquefied petroleum gas (LPG), coal and other solid fuel, according to the U.K. government website. The CCA scheme has enabled cold storage facilities to save a collective £10 million (US$12.7 million) annually.

“The cold storage CCA is good for the environment and good for participating businesses’ balance sheets,” said Brennan

New timetable for applications

Due to the COVID-19 pandemic, the U.K. government has extended the deadline to apply for a sector agreement, such as the Cold Chain Federation’s agreement covering the cold storage sector.

New entrants will be allowed to apply to join existing sector agreements, with the Environment Agency expected to certify eligible new entrant facilities from January 2021, according to the report.

The deadline for applications has been extended to November 30.

The Cold Chain Federation supports businesses when applying to the CCA for the first time, as well as adding a new facility to an existing agreement, said Brennan. The revised deadline for applying to the Cold Chain Federation for assistance is the end of October.

“Applying can take time so I urge businesses to act soon and contact us before they miss the boat,” said Brennan.

Businesses can find out more about the scheme and how to join by emailing info@coldchainfed.org.uk.