Environmental guidance for your business in Northern Ireland & Scotland

Climate change levy

Climate change levy

Climate change levy (CCL) is designed to encourage businesses to reduce their energy consumption or use energy from renewable sources.

Generate your own renewable energy

Your business can also reduce costs through minimising your energy use.

Energy efficiency

The CCL applies to supplies of the following:

  • electricity
  • natural gas supplied by a gas utility
  • petroleum and hydrocarbon gas in a liquid state (LPG)
  • solid fuels, ie coal, lignite, coke - and semi-coke - of coal or lignite, and petroleum coke.

Users of energy from these sources must pay the tax. The levy is imposed at the time of supply, so it will already be included in your energy bills. Suppliers of these services collect the tax. Note that supplies for domestic use and to charity users for non-business purposes are excluded. Small quantities of fuel and power (de minimis) can be treated as being domestic use even when they are supplied to a business.

GOV.UK: Climate Change Levy

Rates

The levy is charged at an exact rate per unit of energy. The rates for 1 April 2013 are as follows:

Commodity

Rate from 1 April 2016

Rate from 1 April 2017

Rate from 1 April 2018

Rate from 1 April 2019 

Reduced rate of CCL for CCA holders

Electricity 0.559 pence per kilowatt hour  0.568 pence per kilowatt hour 0.583 pence per kilowatt hour 0.847 pence per kilowatt hour 10% (7% after 2019)
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility. 0.195 pence per kilowatt hour 0.198 pence per kilowatt hour 0.203 pence per kilowatt hour  0.339 pence per kilowatt hour 35%(22% after 2019)
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state. LPG 1.251 pence per kilogram  1.272 pence per kilogram 1.304pence per kilogram  2.175 pence per kilogram 35%(22% after 2019)
Any other taxable commodity. 1.526 pence per kilogram 1.551 pence per kilogram    1.591  pence per kilogram 2.653 pence per kilogram 35%(22% after 2019)

 

Reduced rates and exemptions

CCL has a reduced rate and a range of exemptions.

If your type of business is deemed as energy intensive - such as aluminium, chemicals and food - the reduced rate could apply and you may get a 90 per cent reduction if you join an agreement to meet energy-efficiency or carbon-saving targets negotiated by your trade body and the government. To qualify, you must meet binding targets - reviewed every two years - for reducing energy use.

To check whether your business is eligible and how to join a scheme, see the page in this guideline: Climate change agreements.

The following are exempt from the levy:

  • supplies not for burning or consuming in the UK
  • supplies to and from certain combined heat and power schemes
  • electricity from renewable sources
  • supplies used to produce taxable commodities other than electricity
  • supplies to electricity producers
  • supplies for a non-fuel use.

GOV.UK: Climate Change Levy

In this Guideline

Climate change levy

Climate change agreements

Enhanced capital allowances

Landfill tax

Vehicle tax and fuel duty

Aggregates levy

Tax relief for restoring contaminated or derelict land

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Permits

NIEA - Apply online

SEPA - Application forms