The Climate Change Agreements Regulations 2016

What is the amended legislation:  The Climate Change Agreements (Administration) (Amendment and Related Provision) Regulations 2016
These Regulations amend the:  Climate Change Agreements (Administration) Regulations 2012
Who does this affect:  UK
When does this change take place:  30th December 2016

These Regulations amend the Climate Change Agreements (Administration) Regulations 2012 with regard to the terms which must be included in both umbrella agreements (which are the agreements between the administrator and the sector associations) and underlying agreements (which are the agreements between the administrator and the operators). These Regulations also make provision for the administrator (the Environment Agency) to be able to vary existing agreements as a result of those amendments.

Regulation 2 specifies the time periods covered by target period 1, target period 2, target period 3 and target period 4 respectively.

Regulation 3 amends the provision on the terms which must be included in underlying agreements relating to the buy-out fee. The provision for terms relating to the buy-out fee enable the operator, where a target unit has failed to meet a target for a target period, to pay a sum of money (the ‘buy-out fee’) in order to retain its Climate Change Levy discount. The buy-out fee is calculated by reference to the difference between a target unit’s emissions of tonnes of carbon dioxide equivalent and its target for the target period. Regulation 2 amends the terms which must be included in underlying agreements relating to the buy-out fee so that, for failures to meet a target for target period 3 (1st January 2017 to 31st December 2018) or for target period 4 (1st January 2019 to 31st December 2019), the buy-out fee will be calculated on the basis of £14 for each tonne of carbon dioxide equivalent by which a target is missed. Regulation 3 amends the terms in such a way as to preserve the position that, for failures to meet a target for the target period 1 (1st January 2013 to 31st December 2014) or for target period 2 (1st January 2015 to 31st December 2016), the buy-out fee is calculated on the basis of £12 for each tonne of carbon dioxide equivalent by which a target is missed.

Regulation 4 inserts a new regulation 12A that applies to umbrella agreements which contain terms relating to the buy-out fee. Such terms must provide that, for failures to meet a target for target period 3 (1st January 2017 to 31st December 2018) or for target period 4 (1st January 2019 to 31st December 2020), the buy-out fee will be calculated on the basis of £14 for each tonne of carbon dioxide equivalent by which a target is missed.

Regulation 5 provides that the administrator can vary existing underlying agreements and umbrella agreements as a result of these changes to the terms which must be included in agreements. If the administrator varies an umbrella agreement, it must also vary the underlying agreements that relate to that umbrella agreement. Regulation 5 also provides that, if the administrator does vary existing agreements, the administrator must give notice of the variation in writing to the other party to the agreement.

Full text available here: http://legislation.data.gov.uk/uksi/2016/1189/made/data.pdf
Source: http://legislation.data.gov.uk/uksi/2016/1189/made/data.pdf
Acknowledgement:  Contains public sector information licensed under the Open Government Licence v3.0.