Following the Seventh Delegated Legislation Committee Debate on the Renewable Heat Incentive (RHI) Scheme (Amendment) Regulations 2016, the Government has decided to introduce amending legislation to the terms of support for biomass-Combined Heat and Power (CHP) as soon as is practicable.

The Climate Change Levy (CCL) was introduced by the UK Government in 2001 and is charged on most non-domestic supplies of energy used as fuel for lighting, heating and power. The CCL is designed to promote energy efficiency and encourage investment in energy saving equipment, thereby reducing emissions of greenhouse gases. CHP schemes that are fully or partially certified as Good Quality CHP under CHPQA and have obtained a Secretary of State (CHP) Exemption Certificate are exempt from the main rates of CCL on the fuel they utilise assuming they meet a power efficiency threshold of 20% otherwise this exemption is scaled back.

This amending legislation will reduce the 20% power efficiency requirement for biomass CHP plant to 10% for a transitional period over the coming winter. This will be applied to all biomass-CHP plant with a tariff start date on or after the 1st August 2016. The intention is that the threshold will revert to 20% after 31st March 2017.

Plant with a power efficiency of 10% or above will continue to receive the biomass-CHP tariff for all heat produced.  For plants with a power efficiency of below 10% the level of heat receiving the biomass-CHP tariff will reduce proportionately. The remaining heat will receive the relevant biomass tariff.

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