Outline Sequence of Events for Prospective New Entrants to the Glass Manufacturing Sector
Climate Change Agreement (for sites with appropriate base line data)
This document is for guidance only based on the current glass sector agreement the details may
vary.
1
2
3
4
5
Steps
Site believes they have a CCA eligible process
Site contacts BGMC to express initial interest and submits Annex
D Spreadsheet.
Site familiarises itself with CCA ‘Participants Pack’
documentation on DEFRA website and CCL documentation on
HMCE website:
 http://www.defra.gov.uk/environment/ccl/papers.htm#PP
 http://www.hmce.gov.uk/
Site undertakes cost benefit analysis for CCA membership
considering:
 [The 0.3% reduction in NIC contributions (on 2000/2001
levels)]
 The 80% levy rebate (charged at 0.15p/kWh for Natural
Gas, 0.43p/kWh for electricity, 0.96p/kg for LPG)
 British Glass management fees - £1300 one off set up fee
+ ongoing annual fees + ‘Error Pot’ purchase.
 Management time – initial agreement setup then an
ongoing estimated weekly management input of 1-2 hours
including:
o quarterly return of performance data to BG
o Development of energy management systems /
procedures
o Improvement activities
o possible emissions trading and risk management
activity in milestone years.
o Reading and acting on latest CCA / CO2 trading
documentation
 CO2 allowance purchases / brokerage
 Cost associated with energy efficiency initiatives.
 Cost associated with energy measurement (e.g. submetering)
If site wishes to proceed with CCA application, should contact BG
again indicating such.
Comments
Is BGMC the most appropriate
sector?
A careful CBA is recommended.
Activity and cost associated with
agreement membership is
significant post sign-up and
should not be underestimated.
DEFRA procedures CCA 01 and 05 are then followed:
 http://www.defra.gov.uk/environment/ccl/pdf/cca01.pdf
 http://www.defra.gov.uk/environment/ccl/pdf/cca05.pdf
6
Site identifies


Official (day to day) contact & contact details
Board level contact & contact details
BG Allocates a provisional BGMC facility code number
7
Site draws up PP4 eligibility form,
BG can comment on draft
http://www.defra.gov.uk/environment/ccl/download/pp4.doc
and submits to DEFRA via BG.
8
completed versions of this form,
but ultimate responsibility for
accuracy and completeness lies
with the site.
DEFRA reviews site eligibility and notifies BG:


9
10
Site eligible – proceed to step 9.
Site ineligible
o review proposed facility definition and resubmit
new PP4, or
o Withdraw CCA application
 Site invoiced and pays initial £1300 start up fee to BG
 Site signs participation agreement between BG and
Company
Site agrees appropriate throughput measure for facility with BG,
and establishes accurate base year energy consumption and
production data.
When assessing energy use:
 energy used for external transport fleet is not included.
 The ‘rules’ for calculating energy use in a facility are
given in the glass sector umbrella agreement found at
http://www.defra.gov.uk/environment/ccl/pdf/203bgma.p
df (pp18-23).
 Energy use should be calculated using gross CV
 Electricity is reported in primary energy terms by
converting from delivered to primary energy units (the
relevant factor is year dependent)
 Oxygen use: Within the glass sector agreement, oxygen is
treated as a fuel and factored to primary energy. BG will
advise on exact accounting procedures.
11
12
13
Nominal Glass base year is 1999.
Whatever base year is selected, it
should remain representative of
the plant as it currently stands.
I.e. the process should not have
undergone radical change from
that described in the PP4 i.e. the
PP4 description should apply both
then and now.
Accurate annual data must also be
provided for years intervening
between base and current year.
[Note - the procedure is different for existing sites with no suitable
base data, or for green field new entrants (who must commission
and independent energy consultants report). Consult paper CCA05
for details].
Site establishes:
 Annual production forecasts to 2010
 Energy consumption forecasts to 2010
 Scheduled energy saving measures (by fuel) to 2010
beyond business as usual
 Scheduled energy consumption increasing factors (by
fuel) to 2010 (e.g. installation of an EP).
Site decides if it wants an absolute or relative target (in terms of
carbon or energy).


Site develops and proposes milestone targets
Target development should consider the following factors:
If an absolute target is chosen,
production must not have fallen
by greater than 10% from the
chosen base year to current
production. A fall of greater than
10% would immediately
invalidate the targets.
A bottom up approach to target
development is used in the glass
sector (versus an imposed top
o
o
o
o
o
o
o

It is normal practice for operators to develop
targets for ‘intermediate’ non-milestone years, as
well as the milestone years themselves.
Most glass sector facilities have relative targets of
the form MWh / tonne ‘produced’. It is preferred
that if possible new entrants adopt a similar form
of target.
The sector SEC efficiency target across the 10
year agreement is ~10% versus base year. New
entrants should endeavour to offer savings of at
least 10%, where this is realistically achievable.
The effect of variable tonnage output on energy
consumption (variable MWh / tonne) should also
be taken into account.
Cullet – Future cullet availability is not easily
predicted with certainty. Operators must therefore
decide whether or not to take into account any
effect this may have on their energy consumption.
Furnace ageing – Furnace ageing obviously plays
a major role in determining energy consumption.
Operators should therefore build this in to their
targets ‘up front’, and be aware of the effect that
re-scheduling of furnace re-builds will have on
performance in milestone periods.
The most up to date available data should be used
to make forecasts as accurate as possible.
down target). This ensures targets
are realistic at a facility level.
The responsibility for proposed
target development primarily lies
with the facility concerned.
However, BG holds considerable
expertise in energy management
and can offer assistance in this
process.
Proposed targets should therefore be forecast using a
combination of:
 Forecast production (i.e. economies of scale)
 Planned / timed energy efficiency measures
 Anticipated energy increasing factors (e.g. abatement
installation, furnace degradation).

14
15
16
17
For external auditing purposes (and as for base data), the basis
of target development should be carefully filed for future
reference and possible audit.
Targets proposed to FES (& DEFRA) via BG.
FES (& DEFRA) review proposal and feed back to BG, who in
turn feed back to the facility concerned:


If proposed targets are acceptable proceed to step 16.
If proposed targets are queried / unacceptable:
o review proposed targets and submit fresh
proposal / clarification, or
o Withdraw CCA application.





BG / Facility draw up and sign off underlying agreements.
Agreements submitted to DEFRA for endorsement
DEFRA endorse agreements and return to BG
BG adds company to routine quarterly CCA billing roster
BG adds company to CCA member routine mailing lists
Proposal should include the
information specified in Annex 1
of Paper CCA05
18
19
DEFRA asks HMCE to add facility to ‘Reduced Rate Certificate’
HMCE adds facility to reduced rate certificate,
http://www.hmce.gov.uk/business/othertaxes/ccl/red-ratecerts/brit-glass.pdf
20

To receive reduced rate certificate, company submits supplier
certificates and supporting analysis forms (PP11, and PP10) to
energy suppliers / HMCE.

Detailed guidance on completing and submitting forms
PP10 and 11 is found on the HMCE website at:
http://www.hmce.gov.uk/forms/notices/ccl13.htm#P444_41149
24
BG draws up and issues to facility ‘base data confirmation sheet’
embodying the facilities:
 Base year energy and production
 Targets
 Production forecasts
Company checks, signs off and returns base data confirmation
sheet to BG.
BG sends copy of key agreement documents + new entrants
documentation + Glass CCA quality manual to facility, and
secures originals at BG offices
(Company billed for ‘Error Pot’ carbon purchase)
25
Company enters routine CCA management
21
22
23
Only once a facility is listed here
is it eligible for the reduced rate
levy.
Only once these certificates have
been completed and sent will a
facility receive the reduced rate
certificate.
There is no claw back facility for
unclaimed rebate.
This is necessary to allow the new
facility’s targets to be added to
the sector level glass targets.
CO2 allowance cost equivalent to
0.5% of base year CO2
emissions. This is a sector risk
management mechanism
contributed to by all agreement
participants.