Climate Change Levy
The Climate Change Levy (CCL) is an environmental tax on business energy. Introduced in April 2001, the CCL is designed to incentivise businesses to be more energy efficient in how they operate and reduce their overall emissions.
CCL is paid in one of two ways; main rates or carbon price support (CPS) rates.
Businesses in the industrial, agricultural, commercial and public services sectors will be charged the CCL at main rates. This applies to electricity, gas and any solid fuels such as coal, and appears on your utility bills as a listed charge. Charities are exempt, as is any business that uses less than 33kWh of electricity per day. The CCL currently increases annually, with the next price change coming in April 2022 when it will increase from 0.464p/kWh to 0.568p/kWh.
Carbon Price Support
Power generators or organisations that possess combined heat and power generation may be charged a Carbon Price Support rate. This charge varies by commodity and is calculated per kWh for electricity. For most organisations with on-site generation, it is likely you will be classed as a small-scale generator and not qualify for CPS charges.
Registration and payment of the CCL is compulsory and risks a fine if you fail to do so. Charged monthly, your organisation will be liable for a £250 fine for each instance where you fail to register or pay your CCL amount.
Businesses in energy-intensive industries can secure a reduced rate on their CCL by entering into a Climate Change Agreement, voluntarily reducing their carbon emissions and improving energy efficiency. Businesses bound by a CCA receive a 90% discount on their CCL.