2015 No. 947

Climate Change Levy

The Climate Change Levy (General) (Amendment) Regulations 2015

Made

Laid before the House of Commons

Coming into force

The Commissioners for Her Majesty’s Revenue and Customs1 make the following Regulations in exercise of the powers conferred by paragraphs 22, 24B(3), 24D, 62(1)(bb) and 146(7) of Schedule 6 to the Finance Act 20002 :

Citation, commencement and effect1

1

These Regulations may be cited as the Climate Change Levy (General) (Amendment) Regulations 2015 and come into force on 1st April 2015.

2

They have effect in relation to carbon price support rate commodities brought onto, or arriving at, a CHPQA site of a combined heat and power station in Great Britain on or after that date.

Amendments to the Climate Change Levy (General) Regulations 2001

2

The Climate Change Levy (General) Regulations 20013 are amended as follows.

3

In regulation 11 (other tax credits: entitlement)—

a

in sub-paragraph (1)(bb), after “electricity” (in both places it occurs) insert “to which paragraph 24B(2A)4 of the Act does not apply”;

b

in sub-paragraph (2)(ab), after “electricity” insert “to which paragraph 24B(2A) of the Act does not apply”.

4

In paragraph (1) of regulation 51A (interpretation of part 4(A))—

a

for the definition of “CHPQA” substitute—

  • “CHPQA” refers to the Combined Heat and Power Quality Assurance Standard, Issue 5 (November 2013) prepared by the Department of Energy and Climate Change (“the CHPQA Standard”);

b

omit the definition of “QPO”;

c

in the definition of “QPO electricity”, after those words insert “means qualifying power output electricity and”.

5

In Schedule 3 (fuels referable to the production of electricity in a combined heat and power station)—

a

in paragraph 1 (interpretation)—

i

after “CHP Qualifying Heat Output” insert “CHP Qualifying Power Output”;

ii

at the end insert—

  • “non-qualifying electricity” means electricity to which paragraph 24B(2A) of the Act does not apply;

  • “qualifying electricity” means electricity to which paragraph 24B(2A) of the Act applies.

b

in paragraph 2 (calculation of fuels referable to the production of electricity)—

i

in sub-paragraph (1), for “to (4)” substitute “(3) and (4)”;

ii

in sub-paragraph (2), in the definition of “MO” for “power” substitute “energy”;

iii

after sub-paragraph (2) insert—

2A

Sub-paragraphs (2B) to (2E) apply, instead of sub-paragraphs (3) and (4), in relation to carbon price support rate commodities brought onto, or arriving at, a CHPQA site on or after 1st April 2015.

2B

The extent to which a quantity of a carbon price support rate commodity is referable to the production of non-qualifying electricity in a combined heat and power station is to be determined in accordance with sub-paragraphs (2C) to (2E).

2C

Calculate the total quantity of input fuels referable to the production of non-qualifying electricity in accordance with the following formula—

Q×(1ESTPOMO)math

Where—

  • Q is the quantity of input fuels referable to the production of electricity calculated in accordance with sub-paragraph (2);

  • ES (which must not exceed the QPO) is the amount of qualifying electricity in MWh generated by the station in the annual operation to which the current CHPQA certificate relating to the station applies at the time the quantity of carbon price support rate commodity is brought onto, or arrives at, the CHPQA site;

  • QPO is the CHP Qualifying Power Output for the station specified on the current CHPQA certificate relating to the station at the time the quantity of carbon price support rate commodity is brought onto, or arrives at, the CHPQA site;

  • TPO and MO have the meaning given in sub-paragraph (2).

2D

Calculate the percentage of input fuels referable to the production of non-qualifying electricity in accordance with the following formula—

(RTFI)×100math

Where—

  • R is the quantity of input fuels referable to the production of non-qualifying electricity calculated in accordance with sub-paragraph (2C);

  • TFI has the meaning given in sub-paragraph (2).

2E

Apply the percentage calculated in accordance with sub-paragraph (2D) to the quantity of carbon price support rate commodities brought onto, or arriving at, the CHPQA site.

c

in paragraph 4(1) and (2) after “CHP Qualifying Heat Output,” insert “the CHP Qualifying Power Output, the qualifying electricity,”;

d

in paragraph 5(b) after “CHP Qualifying Heat Output,” insert “CHP Qualifying Power Output, qualifying electricity,”.

Nick LodgeJim HarraTwo of the Commissioners for Her Majesty’s Revenue and Customs
EXPLANATORY NOTE

(This note is not part of the Regulations)

Section 63 of the Finance Act 2015 (c.11) amended Schedule 6 to the Finance Act 2000 (c.17) to provide that, with effect from 1st April 2015, the carbon price support rates of climate change levy do not apply to carbon price support rate commodities used to generate electricity that is included in the CHP Qualifying Power Output of a combined heat and power station’s CHPQA scheme and is either self-supplied or supplied by a person who is an exempt unlicensed electricity supplier.

As a consequence of those amendments, these Regulations amend the Climate Change Levy (General) Regulations 2001 (S.I. 2001/838) to provide the formula for calculating the quantity of carbon price support rate commodities used to generate electricity in a combined heat and power station that are subject to the carbon price support rates of climate change levy; and they make other consequential amendments.

The CHPQA Standard referred to in the amendment made by regulation 4(a) is available on the government website at https:/www.gov.uk/combined-heat-power-quality-assurance-programme or can be obtained free of charge from the CHPQA Administrator, The Gemini Building, Fermi Avenue, Didcot, OX11 0QR (Tel: 01235 753004).

A Tax Information and Impact Note (TIIN) covering this instrument was published on 10th December 2014 alongside draft clauses of the Finance Bill 2015 and this instrument and is available on the Government website at https://www.gov.uk/government/collections/tax-information-and-impact-notes- tiins. It remains an accurate summary of the impacts that apply to this instrument.