Here are the climate-related sections of speeches by MPs during the Commons debate Draft Climate Change Agreements (Administration, Energy-intensive Installations and Eligible Facilities) (Amendment and Revocation) Regulations 2026.
16:30 Dan Tomlinson (Labour)
That the Committee has considered the draft Climate Change Agreements (Administration, Energy-intensive Installations and Eligible Facilities) (Amendment and Revocation) Regulations 2026.
It is a pleasure to serve with you in the Chair, Mr Wishart. The draft regulations expand the eligibility for the climate change agreements scheme to include three new processes—the mechanical recycling of plastic, the packaging of spirits and the production of automotive-grade battery cells—as well as clarifying the existing eligibility and administrative requirements for the scheme and updating the carbon emissions factor figure used in the buy-out fee for the scheme.
The climate change levy was introduced in 2001 for the purpose of encouraging energy efficiency across our economy by taxing energy supplies such as electricity or gas. From the outset, the tax has included the CCA scheme, a voluntary scheme that provides eligible energy-intensive businesses access to significant discounts on their CCL bill in exchange for meeting negotiated energy-efficiency or carbon-reduction targets.
As a tax designed to drive efficiency, the CCL should accommodate the changing energy landscape. We therefore propose to extend the eligible processes within the CCA scheme to include the three I have already mentioned. Those processes meet the scheme’s established eligibility tests, thereby demonstrating that they are sufficiently energy intensive and, where applicable, subject to competition from imports. Their inclusion is consistent with existing policy and continues to support the Government’s objectives of delivering affordable and secure energy and decarbonisation, while also helping to drive growth.
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16:44 James Wild (Conservative)
The climate change agreements allow eligible facilities to reduce their energy use and, in exchange, pay reduced rates of the climate change levy. The discounts can be significant—up to 92% on electricity. The regulations make three changes: they expand the scheme to include the three new processes the Minister referred to, they consolidate the existing eligibility rules and they correct a numerical error in the formula used to calculate buy-out fees.
I have previously welcomed the Government’s decision to extend the climate change agreements scheme for a further six years. When businesses are facing headwinds, the extension offers much-needed respite. Nevertheless, as all Members will know, British manufacturers pay considerably more for energy than their competitors. Compared with the EU, UK firms pay 50% more, and the gap between the UK and America is much larger.
Excessive energy costs are undermining our growth and productivity prospects, yet in the most recent Finance Act, the Government raised the climate change levy rate, at a cost to business of £2 billion a year. That is a significant burden on businesses that are already struggling. We need cheaper energy, which is what the Conservative’s cheaper energy plan would deliver.
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16:47 Pippa Heylings (Liberal Democrat)
It is positive that the Government are looking at costs and energy bills for businesses and non-domestic consumers. Extending the scope of the climate change agreements scheme is a good step to support our industries in the transition. Decarbonising our industry, and encouraging energy-intensive businesses to be more energy efficient and to transition from fossil fuels to clean energy, will be vital to meeting our carbon targets. That could not be more relevant than in this week: not only is it London Climate Action Week, but for the first ever time we have a UK Health Security Agency red alert for extreme heat. Climate change is no longer a future threat; it is here with us now.
We must do all we can to decarbonise and avoid the worsening of climate impacts on our economy and way of life, so it is right to include the three processes the Minister mentioned—the mechanical recycling of plastic, the packaging of spirits and the production of automative-grade battery cells—in the reduced rates scheme. Ultimately, to decarbonise industry we need a package of policies, including ones to make low-carbon actions and technology viable for businesses.
We Liberal Democrats feel that the Government also need to take steps to simplify the current energy-tax system, and that once the emissions trading scheme is fully effective in the UK, complicated taxes such as the carbon price support and the climate change levy should be abolished. I would like to hear the Minister’s thoughts on that.
As we have heard, the price of energy is currently a huge and disproportionate burden for our businesses, across sectors, compared with other countries, which makes the UK less competitive. We need to take action to help businesses—not just energy-intensive businesses but the many small business that are currently left exposed to exorbitantly high energy costs—to decarbonise and have affordable bills. If the Government are serious about meeting our climate targets and driving British industry forwards, we need action and ambition to help to support businesses and industries to stay competitive.
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Dan Tomlinson (Labour)
I agree with the hon. Lady that we need action and ambition on decarbonising our electricity network. We must take the steps we need to take to get clean power and to make sure that we meet our net zero obligations, not just for ourselves but for future generations and for the world. We owe it to all of humanity to make sure that, in a reasonable and careful way, we make progress towards decarbonising our economy. I commend the regulations to the Committee.
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