Partner Information Pack
This information pack relates to the British Plastics Federation Climate Change Agreement (BPF CCA) for the plastics sector. Under this BPF CCA, in return for agreeing to sector targets with DECC on energy consumption relative to production output, BPF CCA Partner sites with approved eligible production processes will qualify for a discount on their climate change levy (CCL) for Electricity and LPG consumed.
BPF Energy Ltd
BPF Energy Ltd will administer the CCA on behalf of the BPF.
BPF energy has appointed Energy Consultants Inenco to assist in the administration of the Scheme. A contractual relationship exists between BPF Energy Ltd and Inenco.
The sector ‘Umbrella’ agreement (PP2) will be between the British Plastics Federation and the Department of Energy and Climate Change (DECC). This agreement will commit the sector to a reduction in relative energy consumption of 12% from the base (calendar) year 2006 to calendar year 2010. The target applies to all energy used by the Partner Site, although the Levy reduction will only apply to Electricity and LPG.
Sites with eligible production processes that have been DECC approved (PP4) will sign an ‘Underlying Agreement’ with DECC, known as the PP3 and will then be able to join the BPF CCA and benefit from the reduction in CCL.
For a site to participate in the BPF CCA it must first prepare a (PP4) Application covering its eligible process for DECC approval and then once admitted to the Scheme provide energy consumption run /production data routinely and to deadline, enabling sector consolidation and reporting. Sites that do not comply with the on-going reporting requirement or meeting the target energy reduction will the risk of not being re-certified after each milestone reporting to DECC. The next milestone reporting is due in February 2011 and will relate to the target period ended 31/12/10.
Inenco will assist the sites to prepare their Application (PP4) to DECC through a helpdesk style service, will guide them through the process and quality check the completed Application prior to submitting to DECC. This level of service is included in the BPF CCA Partner Fee structure.
Full details of this level of service are listed in Appendix A.
Site Application (PP4)
To be able to participate in the Scheme, a site(s) must be based in England, Wales, Scotland or Northern Ireland and their ‘Plastics Processing’ operation must meet one of the eligibility criteria set out by DECC.
‘Plastics Processing’ refers to the production of plastics material, or semi-finished or finished products by the application of heat and pressure to, or by a chemical reaction involving, plastics powder, granules, shredded waste or liquids.
There are a number of different techniques embraced by this overall process and descriptions can be found on the Registration Form BPF1 on the bpfenergy.co.uk website.
Once a site has registered their interest in the Scheme usually via the (BPF1), this will trigger a number of actions. The site will then be contacted by Inenco who will be able to answer any technical questions arising from the completed BPF1. If not already a member of the BPF, they will be invited to join. Also, BPF Energy Ltd will ask the site to complete a BPF CCA Partner Application form (BPF4); which calculates the Annual Fee and Joining Fee after applying BPF membership and mult-site discounts. The process of completing and signing the BPF4 creates the contractual relationship between BPF Energy Ltd and the Site.
The Joining Fee is payable immediately upon admission to the Scheme and when that is paid the Site Application pack (PP4) is sent to the site contact by Inenco.
The Site’s Application to DECC will comprise a package of information:
a) PP4 Application form
b) Process Description and Process Flow diagrams
c) Calculations to demonstrate percentage Eligibility
d) Signed PP3
e) Payment of Annual Partner Fee to BPF Energy Ltd
A site’s completed Application pack will be routed via Inenco to DECC. Inenco will quality assess each package and check for completeness. Once the Site’s Annual Fee has been paid to BPF Energy Ltd their Application will be forwarded to DECC.
Certification at DECC can take as much as six weeks; however they may ask for further supporting evidence regarding eligibility or reduction target which may delay this process.
Once DECC have approved the Site’s Application, they will counter-sign one of the PP3 contracts which will be returned to Site. The approved Application is then known as the Evidence Pack. Copies of these Evidence Packs must be retained by the Site and may be subject to compliance audit.
The whole process of completing, checking and approving a Site’s Application can take up to 12 weeks.
All CCA Applications must be routed through Inenco, although you are at liberty to use any advisor to assist in preparations and to help meet targets in energy reduction.
Contact the Inenco Helpline service on 01253 785 069
Once a CCA Application has been approved by DECC it will be listed as certified on their website.
The final part of the procedure to secure the CCL discount on the energy supplier’s invoice is the Supporting Analysis and Supplier Certificate (PP10/PP11).
Remember the maximum discount your site can receive is 80%. Some sites will fall short on the 90/10 rule and in those cases qualify for partial eligibility only. The PP10 and PP11 are used to provide the energy supplier with the details of the % eligibility.
For example if the eligible process accounts for only 80% of the site/metered energy consumption, then the CCL discount will be 64%.
In all cases the CCA Partner Fees are based on total site/metered energy consumption, as the amount of work to support the site is the same.
BPF Energy Ltd Fees
A separate legal entity BPF Energy Ltd has been formed to administer the BPF CCA. The reasons for this include the fact that not all plastics processors who are members of the BPF will be eligible to join the Scheme and also that the Scheme is unrestricted and open to non-members of the BPF as long as they are eligible.
It has taken around two years to successfully introduce a BPF CCA, involving a huge investment in time and cost to put the Scheme in place.
In addition to these, and the on-going (BPF) management costs of the Scheme and legal entity, there are the service support costs of Inenco to meet (Appendix A).
The BPF CCA Partner Fee structure is designed to cover all these expenses.
The BPF CCA Partner Fees are based on a percentage of a Site’s ‘pre-discounted CCL’ according to a banded scale. This scale, in part, takes into account the fixed nature of costs necessary to support a Site through both the process of securing approval of its Application and the on-going reporting requirements. Consequently, smaller Sites will pay a larger percentage of their CCL in fees reflecting this fixed cost. It is possible that for some very small processors, the Scheme will prove uneconomic-something we have to accept.
The Site’s Gross Annual Fee is then discounted by up to 25% for multi-site discount for companies where there are more than 3 qualifying sites. Then a Maximum Fee per band is determined before finally applying up to a further 50% discount for the type of BPF membership the Site holds. The result is the Annual Fee payable by the site upon the submission of their Application to DECC. The Annual Fee is levied on the calendar year and payable pro rata in the year of joining the Scheme.
In subsequent years, the Annual Fee will be calculated on the previous calendar year consumption at the prevailing rate of CCL, invoiced in the October prior. For practical reasons both the 2009 and 2010 Annual Fees will be based on the base year 2006 consumption at the prevailing rate of CCL. For the 2011 Annual Fee the year to 31/12/09 will be used, invoiced in October 2010.
A one-off Joining Fee is payable by all CCA Partners on joining the Scheme at the rate of 25% of the first year’s Annual Fee. This is payable at the commencement of the CCA Application process (PP4).
As site energy efficiencies are made, or as changes in production volume impacts energy consumption, the Annual Fee payable is automatically re-adjusted.
It is estimated that the average CCA Partner Annual Fee for a member of the BPF will be 7% of the average site CCL after all discounts have been applied.
CCA and the Carbon Reduction Commitment (CRC)
The relationship between CRC and CCA is that where an organisation covered by CRC has 25% or more of its emissions covered by a CCA; the organisation is temporarily exempt from CRC (temporary in the sense a Site must remain in the CCA and at a 25% or more emissions level or it will default to the CRC)
Schedule 1: Duties & Responsibilities of Inenco in respect of Partner Registration
1. Assist individual Partner sites in the registration process by providing an application pack. This would include a PP4 (eligibility document) and PP10 & PP11 (discount calculation forms) including data collection spreadsheets and guidance notes for completion of the forms. Assistance would extend to telephone advice (Helpline) and assistance.
2. Review these completed forms and advise on any amendments required.
3. Submit PP4 to DECC for sign off.
4. Advise on the completion of the PP3.02 (the Underlying Agreement) and submit to DECC.
5. Review the completed PP10 & PP11 and submit to HMRC & the energy suppliers to apply the discount on the following bills.
Schedule 2: Duties & Responsibilities of Inenco for ongoing support for BPF Energy
1. Following registration, chase and collate energy/production data on a quarterly basis and feedback to Partner Site on performance against target. This will ensure early warning of the need to buy carbon or ring fence any surplus.
2. Maintain on the central database each CCA Partner’s site energy and production figures to meet DECC requirements.
3. At the end of a milestone year advise those Partner Sites which need to buy carbon and submit database to DECC in order that all participants are re-certified.
4. Provide a telephone helpline which will be available Monday to Friday from 09:00 to 17:00 to answer general enquiries about the scheme e.g. process eligibility, benefits versus costs, consequences of missing targets, emissions trading etc.
5. Submit a consolidated annual return to DECC at the end of each calendar year to report on the Sector performance.
6 Attend quarterly progress meetings with BPF Energy – the frequency would be subject to review and altered by mutual agreement.
7 Provide marketing support via website, telesales and sales activity to promote the BPF CCA scheme.
8. Provide support in any discussions/negotiations with DECC or any other Government Department.
9 To attend, if required, meetings of the Directors or Advisory Committee of BPF Energy and to assist with any queries from participants or other stakeholders that may arise.