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Energy Efficiency Targets

Volume 403: debated on Tuesday 8 April 2003

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Following announcement of the Climate Change Levy, an energy tax that came into force on 1 April 2001, the Government agreed that companies in energy intensive industries could enter into 10-year energy efficiency agreements in return for an 80 per cent reduction in the levy rate. Forty-four sector associations signed agreements, representing over 5,000 companies, who operate over 12,000 individual facilities.The first target period ended on 31 December 2002 and companies that met the terms of their agreements were re-certified on 1 April 2003 for the reduced rate of Levy payments for the two forthcoming financial years.There were a total of 5,742 "target units" in the Agreements when the results were submitted by sector associations in February 2003. (A target unit is one or more facilities that share a single target) Overall, 5,042 target units were re-certified, or 88 per cent. of the total. This represents a total of 10,500 facilities. Of the 700 target units that were not re-certified, 581 dropped out of their agreement or did not return information to their sector association and 219 failed to meet their targets.The CCAs as a whole saved 13.5 million tonnes of CO

2 (3.7 mt Cartoon1 ) against an estimated 2000 baseline, or 15.8 million tonnes of CO2 (4.3mt C) against pre-CCL baselines. This is 10m tonnes more than projected. However, a large majority of this reduction came from the steel sector. Even without this contribution the other sectors have exceeded their targets by almost 1 million tonnes of CO2 .

If the sectors with energy efficiency targets had produced their 2002 output at their efficiency in their baseline year they would have emitted an extra 5.2 million tonnes of CO2 . This demonstrates real gains in energy efficiency.

Companies were able to purchase allowances in the UK emissions trading scheme in order to help meet their target, and 600,000 allowances were bought and retired this purpose. Companies were also able to convert any over-achievement into allowances that can be sold or used against future targets. A total of 4.0 million tonnes of CO2 has either been sold or retained for future use, subject to independent verification.

A summary of the performance of the sectors is attached. A full analysis is available in the document Climate Change Agreements—Results of the First Target Period Assessment and at Please note that this is a preliminary analysis at this stage. Defra will continue to update this document when more complete analyses have been completed.

1The UK Climate Change Programme uses units of carbon rather than CO2 to measure greenhouse gas emissions, so both units are presented here.

The performance by sector is given in the following table.


Number of Facilities Re-certified

‥ of target units re-certified

Absolute Saving kt(CO2) (a)

Craft Baking2967100%-9
Cathode Ray Tubes3100%21
Dairy Industry13399%35
Egg Processing9100%1.9
Eurisol (Mineral Wool)6100%8.9
Food & Drink1081100%160
Gypsum Products6100%-21
Poultry Meat Processing/Feed8198%-30
British Meat Fedtn18597%27
Metal Forming107100%23
Metal Packaging2395%18
Motor Manufacturers19100%36
NFU—Poultry Meat52083%53
Poultry Meat Rearing105099%72
Slag Grinders6100%3.5
Surface Engineering187100%29
Agricultural Supply178100%23
Vehicle Builders And Repairers60100%0
Wood Panel9100%-22