The Climate Change Act does not impose specific costs on large energy users in and of itself. Instead, the Act sets up a long term target to reduce emissions across the whole economy. It is for the Government to decide the cost effective way of meeting that target and Government is mindful of the impact of policies on energy intensive users.
For energy intensive sectors, voluntary Climate Change Agreements (CCAs) allow 90% reduction from the Climate Change Levy (CCL) for electricity in return for signing up to stretching energy efficiency improvement targets agreed with Government. Metallurgical and mineralogical sectors have been exempt from paying the CCL since April 2014. In addition, the Government has paid over £131m in compensation to eligible energy intensive industries, for the indirect impacts of the EU Emissions Trading System (EU ETS) and Carbon Price Support mechanism on their electricity prices. Further relief measures are currently being considered by the European Commission.