Who pays the Climate Change Levy?

The CCL is charged on energy supplied to businesses and the public sector. Domestic consumers and very small businesses are exempt. The levy appears on energy bills and is collected by energy suppliers on behalf of HMRC.

How can I reduce my CCL liability?

Reduce energy consumption (efficiency measures), switch to renewable electricity (exempt from CCL), enter a Climate Change Agreement if eligible (reduced rates), and generate your own electricity on-site (self-supply exemption). All of these also reduce your carbon footprint.

Climate Change Levy (CCL)

The Climate Change Levy is a UK tax on the supply of energy to businesses and the public sector, designed to incentivise energy efficiency and reduce greenhouse gas emissions.

What is Climate Change Levy (CCL)?

Introduced in 2001, the CCL is charged on electricity, gas, LPG, and solid fuels supplied to non-domestic consumers. Main rates (2024/25) are approximately 0.775p/kWh for electricity and 0.672p/kWh for gas. Climate Change Agreements (CCAs) provide reduced CCL rates for energy-intensive industries that meet emission reduction targets. Renewable electricity from certified sources is exempt from CCL. The levy creates a financial incentive for energy efficiency and renewable energy procurement.

Practical Examples

A manufacturing company enters a Climate Change Agreement, receiving an 83% discount on electricity CCL in exchange for committing to a 10% energy intensity improvement.

A commercial tenant estimates its annual CCL liability at £15,000, justifying investment in LED lighting that pays back in 18 months through combined energy and CCL savings.

How Climatise Helps

Climatise tracks energy consumption across all fuels and sites, helping organisations estimate their CCL liability and identify the energy efficiency measures that reduce both emissions and tax costs.

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