Carbon price floor: reform
This Tax Information and Impact Note explains the capping of the Carbon Price Support rate to £18 per tonne of carbon dioxide (t/CO2) from 2016-17 to 2019-20.
The Carbon Price Support (CPS) rates of Climate Change Levy (CCL) apply to fossil fuels used in electricity generation that are taxed under the CCL regime (gas, solid fuels and liquefied petroleum gas). The CPS rates of fuel duty apply to oils and biofuels used in electricity generation.
The UK-only element of the carbon price floor will be capped at £18 per tonne of carbon dioxide (t/CO2) from 2016-17 to 2019-20. This will have the effect of freezing the CPS rates for each of the individual taxable commodities across this period at around 2015-16 levels.