Draft Climate Change Agreements (Administration, Energy-intensive Installations and Eligible Facilities) (Amendment and Revocation) Regulations 2026

Dan Tomlinson Excerpts

Tuesday 23rd June 2026 General Committees

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I beg to move,

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.

In summary, the regulations give effect to the Government’s decision to extend the eligible processes within the CCA scheme to include the production of automotive-grade battery cells, the packaging of spirits and the mechanical recycling of plastics. I commend the regulations to the Committee.

--- Later in debate ---

[Dan Tomlinson]

As ever, I thank the shadow Exchequer Secretary and the Liberal Democrat spokesperson for their contributions and questions.

I agree with the shadow Exchequer Secretary that lengthy consultations can be a frustration—they are the bane of my life too. Of course, we need to make sure that we engage and listen, but it is always good to be as quick as we possibly can be. There is a gap between now and when the changes will come into effect because the Environment Agency requires numerous administrative processes to be completed before facilities from newly eligible sectors can join a scheme. We of course always look to make sure that we can speed up such administrative processes.

I will follow up in writing with details as to why the non-successful processes were not successful; I do not have that information at my fingertips today, but I look forward to reading the letter and sending it to the shadow Exchequer Secretary. I can confirm that the four processes that applied but were not successful were two relating to tire retreading, one relating to the roll turning of plastics and one relating to water. I will write to the hon. Gentleman on those points in due course.

The shadow Exchequer Secretary is right that there is a very minor change in a complicated formula from 0.0497 to 0.0498. I am assured that that is about helping to make sure the Government do these things properly, and that the resultant changes will not be significant.

The shadow Exchequer Secretary is right to point out that we have high energy costs in this country. We need to bring them down. We are not going to take the approach of the previous Government of saying no to new nuclear power stations over and over again, and we are not going to take the approach of the previous Government of not investing in our energy security. Instead, we are going to get a range of different energy sources into our energy mix so that we can get prices down. The Chancellor proactively made the decision at the last Budget to take £150 off energy bills for families across the country, which was very welcome indeed.

The Liberal Democrat spokesperson mentioned how she would like to see the carbon price support removed. I have good news for her: just a few short weeks ago we announced that we are removing it. I am disappointed that she did not hear that exciting news. It is a very niche tax, but it is important that we are removing a tax that had become outdated and was not fit for purpose given the current structure of our energy market. I do like to make sure that we get rid of taxes.

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.

Question put and agreed to.