Notice

Climate Change Levy ― reliefs and special treatments for taxable commodities (Excise Notice CCL1/3)

Updated 9 October 2023

1. Introduction

1.1 Information about this notice

This notice provides information about supplies of taxable commodities to which the full rates of Climate Change Levy (CCL) do not apply, and the certification and other procedures that must be followed in order to claim the reliefs.

1.2 Who should read this notice

This notice is for energy suppliers and for energy consumers in the business and public sectors that may be liable to the main rates of CCL. It is also for owners of generators and operators of combined heat and power (CHP) stations who are deemed to make a taxable self-supply that may be liable to the carbon price floor (CPS) rates of CCL.

Unless indicated to the contrary where we say ‘you’ or ‘your’ we mean the energy generator, energy supplier or energy consumer and where we say ‘we’, ‘our’ or ‘us’ we mean HMRC.

1.3 CCL liability at a glance

Row	Supplies	CCL liability	Paragraph or section where more detailed information can be found
1	for domestic use, and for the non-business use of charities	Nil — excluded from the main rates of CCL	section 2
2	of small quantities of fuel and power	Nil — excluded from the main rates of CCL	paragraph 2.5
3	to community heating schemes	Nil — excluded (subject to certification) from the main rates of CCL	paragraph 2.12
4	to US and NATO visiting forces and American military cemeteries at Madingley and Brookwood	Excluded from the main rates of CCL	paragraph 2.12 and VAT relief for suppliers to visiting forces (VAT Notice 431)
5	not for burning or consumption in the UK	Nil — exempt (subject to certification) from the main rates of CCL	paragraph 3.1
6	of liquefied petroleum gas (LPG) and solid fuel for re-sale	Nil — exempt (subject to certification) from the main rates of CCL	paragraph 3.2
7	used in some forms of transport	Nil — exempt (subject to certification) from the main rates of CCL	paragraph 3.3
8	of taxable commodities to producers other than electricity producers	Nil — exempt (subject to certification) from the main rates of CCL	paragraph 3.4
9	to electricity producers (other than CHP, small generating stations and stand-by generating stations)	Exempt from main rates of CCL, but CPS rates of CCL due on solid fossil fuels, gas and LPG	paragraph 3.5 and Excise Notice CCL1/6: a guide to carbon price floor
10	of electricity by auto-generators or unlicensed electricity suppliers (excluding CHP) with a generating capacity of more than 2MWs	From 1 April 2013, where supplies are produced from CPS rate commodities, they are liable to main rate of CCL for electricity for: self-supplies of electricity supplies of electricity direct to customers Supplies to an electricity utility exempt from main rate of CCL on electricity.	paragraph 3.6
11	to small generating stations (other than CHP)	Main rates of CCL charged by supplier (subject to any other reliefs or exemptions). No liability to CPS rates of CCL	paragraph 3.7 and Excise Notice CCL1/6: a guide to carbon price floor
12	by small generating stations (other than CHP)	Relief from main rates of CCL available on input fuel used to generate any electricity not self-supplied (no liability to CPS rates of CCL). Electricity passed to an electricity utility liable to main rate of CCL on electricity when sold on by the utility	paragraph 3.8
13	to stand-by generating stations	Main rates of CCL charged by supplier (subject to any other reliefs or exemptions). No liability to CPS rates of CCL	paragraph 3.9 and Excise Notice CCL1/6: a guide to carbon price floor
14	to CHP stations	Nil — exempt from main rates of CCL (subject to certification) but CPS rates of CCL due on solid fossil fuels, gas and LPG used to generate electricity that is not Qualifying Power Output (QPO) electricity.	paragraph 3.10 and Excise Notice CCL1/2: combined heat and power schemes and Excise Notice CCL1/6: a guide to carbon price floor.
15	not used as fuel	Nil — exempt (subject to certification) from the main rates of CCL	paragraph 3.11
16	certain self and direct supplies of renewable source electricity	Nil — exempt from the main rates of CCL	paragraph 3.12
17	of electricity from CHP stations	Treated for CCL purposes (main rates of CCL) according to its Secretary of State and Combined Heat and Power Quality Assurance Programme (CHPQA) certificates	paragraph 3.13 and Excise Notice CCL1/2: combined heat and power schemes
18	to customers who have Climate Change Agreements (CCAs)	Reduced rate (subject to certification), which is a reduction on the main rates of CCL	section 4
19	for use metallurgical and mineralogical processes	Nil — exempt from main rates of CCL (subject to certification)	paragraph 3.14

2. Supplies excluded from CCL

2.1 Supply for domestic or non-business charity use

A supply is excluded from the main rates of CCL if it is for domestic use or use by a charity for its non-business activities. The domestic and charitable exclusions are based on the VAT fuel and power ‘qualifying use’ provisions contained in Fuel and power (VAT Notice 701/19).

2.2 Meaning of ‘domestic’ use

Domestic use means use in:

• armed forces residential accommodation
• caravans
• children’s homes
• homes for the elderly and disabled
• hospices
• houseboats
• houses, flats or other dwellings
• monasteries, nunneries and similar religious communities
• school and university residential accommodation for students and pupils
• self-catering holiday accommodation
• supplies to community heating schemes

Buildings such as garages used with houses are treated as part of the same residential unit. Subsidiary buildings situated a short distance away, for example, a garage in a block located away from a house, are also treated as part of the same residential unit. Corridors, lifts, hallways and stairways in a residential unit are treated as part of the domestic premises.

2.3 Residential buildings that do not qualify for the domestic use exclusion

Subject to the provisions set out in paragraph 2.5, if a building is in use as a hospital, a prison or similar institution, a hotel, inn or similar establishment, supplies made to it are not for domestic use. Read paragraph 2.8 for guidance on mixed use.

2.4 CCL treatment of stair lighting and street lighting

Stair lighting for domestic accommodation is not subject to the main rate of CCL. Supplies of energy for stair lighting in any commercial property or for street lighting in general are within its scope, unless the amounts involved are de minimis (read paragraph 2.5).

2.5 Small quantities of fuel and power

Small quantities (de minimis) of fuel and power may automatically be treated as supplies for domestic use, even where they’re supplied to a business. The de minimis limits for each fuel are as follows:

If the supply is of	the de minimis amount is
coal or coke	a supply of not more than one tonne held out for sale as domestic fuel (that is, domestic grade fuel).
piped gas	a supply by the same supplier at a rate of not more than 4,397 kilowatt hours per month of gas of a kind supplied by a utility or petroleum gas, to one customer at any one of the customer’s premises. (This quantitative limit applies regardless of whether the bill is based on a meter reading by either the supplier or the customer or on an estimate.)
metered electricity	a metered supply to a person at any premises where the electricity (together with any other electricity provided to him at the same premises by the same supplier) is provided at a rate not exceeding 1,000 kilowatt hours per month. (This quantitative limit applies regardless of whether the bill is based on a meter reading by either the supplier or the customer or on an estimate.)
unmetered electricity	an unmetered supply to a person where the electricity (together with any other unmetered electricity provided to them by the same supplier) is provided at a rate not exceeding 1,000 kilowatt hours per month.
LPG in cylinders	a supply containing any number of cylinders, each of which is less than 50kgs net weight.
LPG in bulk	a supply of LPG not in cylinders, to a customer at premises that have a tank capacity of not more than 2 tonnes. (Storage tanks are not filled to the limit of their holding capacity for safety reasons. The capacity is therefore to be calculated based on the maximum quantity that tanks can safely hold, as certified by the tank provider.)

Within these limits there is no requirement for such supplies to be certified as being for domestic use, although the supplier must keep records to substantiate the treatment of the supply.

2.6 Charity non-business use

Supplies for use by a charity for its non-business activities are excluded from the main rates of CCL. Charities are normally non-profit making bodies whose objectives include the relief of poverty, sickness or infirmity or other activities beneficial to the community such as the advancement of education, religion, nature conservation and the support of the arts.

Charities may also carry out business activities and, unless the de minimis limits set out in paragraph 2.5 apply, the main rate of CCL is due on supplies used for these activities. Examples of business activities by charities include the:

• sale of donated goods
• hiring of charity run buildings (for example, village halls)
• provision of membership benefits by clubs, associations and similar bodies

An activity may still be a business activity even if charges are only set to recover costs incurred — it is not necessary to make a surplus for an activity to be business. If a charity is carrying out both business and non-business activities on the same premises then it may apportion its consumption per account between excluded and taxable use and advise its energy supplier accordingly. Read How VAT affects charities (VAT Notice 701/1).

In order to claim this relief, a VAT certificate must be provided to the supplier. Read Fuel and power (VAT Notice 701/19).

2.7 Educational institutions

Supplies of fuel and power to educational institutions such as schools, sixth form colleges, further education colleges and universities are subject to the main rate of CCL unless the institution is a charity engaged in non-business activities.

Information about the business status of educational institutions can be found in Education and vocational training (VAT Notice 701/30).

2.8 Mixed use

Where supplies are made to a customer whose premises are put partly to domestic or non-business charity use if the domestic or charity use is:

• at least 60% of the total use, the whole supply can be treated as such and is not subject to the main rate of CCL
• less than 60% of the total use, the main rate of CCL must be applied to that portion that does not qualify for relief

2.9 Mixed use VAT certificates

Where you supply fuel and power for mixed use you should obtain from your customer a VAT certificate declaring what percentage is, or will be, put to domestic or charitable non-business use for each of the premises you supply and apply relief from CCL on this basis.

2.10 Third Party Intermediaries

Ofgem updated their guidance on Third Party Intermediaries (TPI) on 11 October 2013. The factsheet What your business needs to know provides a definition of what a TPI is and states that it’s the energy supplier that provides the energy to businesses, not the TPI. The energy and contract is supplied by the energy supplier and will include the energy supplier’s terms and conditions.

2.11 Intermediaries and domestic or charitable non-business use

Where there is domestic or charitable non-business use and there is an intermediary in the supply chain (for example, supplies to a tenant made through a landlord) the relief depends upon the use to which the commodity will be put. The fact that there’s an intermediary in the supply chain should not affect the relief if the utility is aware that the commodity is for domestic or charity use.

Therefore, if the intermediary wants to be excluded from the main rate of CCL, they will need to submit a CCL declaration to their energy supplier which should include the following information:

• customers (end-users) name and address
• it relates to a domestic or charity non-business qualifying use
• percentage of use eligible for the exclusion of CCL
• declaration that the information is correct and complete and signature

In this scenario the main rate of CCL will not be charged. As the exclusion is based on use of the commodity, an intermediary does not need to apply for a utility direction in these circumstances.

2.12 Community Heating Scheme

The CCL exclusion for domestic use includes energy supplied to one party for use for the centralised provision of heat to a number of sites or users, for instance a common boiler heating a block of flats. This arrangement is commonly known as a ‘Community Heating scheme’.

Whether the supplier should charge the main rate of CCL will depend on whether an extant VAT certificate covers the community heating scheme. Where it does, the supply is excluded from CCL automatically. Where it does not, the main rate of CCL must be charged on bills unless the customer claims and certifies relief to the supplier on Climate Change Levy supplier certificate (PP11). To claim the exclusion the operator of the scheme must declare to their supplier that the commodities are being consumed for qualifying purposes (read section 6).

2.13 Visiting forces

If you’re a UK VAT-registered business and registered for CCL, provided you fulfil the conditions described in VAT relief for suppliers to visiting forces (VAT Notice 431), you can supply fuel and power to US and NATO visiting forces without having to account for the levy.

You can also make levy free supplies of fuel and power to the American Military Cemetery and Memorial at Madingley, Cambridge or Brookwood, Surrey provided they are solely used for the maintenance of those cemeteries.

Further information about reliefs to visiting forces is set out in VAT relief for suppliers to visiting forces (VAT Notice 431).

3. Supplies exempt from the main rates of CCL

3.1 Supplies not for burning or consumption in the UK

Taxable commodities supplied to destinations outside the UK are entitled to relief from the main rates of CCL. Where you’re making supplies to destinations outside the UK, you must retain and make available to us documentary evidence that confirms the commodities were removed from the UK. The documentary evidence you must hold is the same as required for VAT purposes, and detailed in Goods exported from the UK (VAT Notice 703).

On occasion, an intermediate customer in the UK may make the export supply. Such intermediate customers must notify the UK supplier using the Climate Change Levy supplier certificate (PP11) or written equivalent (read section 6) that they’re exporting the commodity and have no intention of bringing it back to the UK.

The export procedures and our legal requirements are described in detail in Notice 275: Customs export procedures.

3.2 Supplies of LPG or solid fuel for re-sale

If your sole intention is to sell solid fuels and LPG to another person for non-taxable use (examples include hardware stores selling LPG or garages selling bags of coal) the supplies of those commodities to you are free of CCL and you’re not required to register for CCL purposes.

Wholesalers and retailers of LPG in bulk and solid fuels must notify their suppliers that they intend to make onward supplies, using form PP11 Climate Change Levy supplier certificate or written equivalent (read section 6). The Solid Fuel Association has devised a simplified PP11 form for use by coal merchants among its membership.

If wholesalers and retailers are also making taxable supplies to end-users they must register and account for the main rate of CCL on those supplies.

Because of the de minimis arrangements explained in paragraph 2.5, supplies of LPG in cylinders of less than 50kgs each in weight are not taxable for CCL purposes.

3.3 Supplies used in some forms of transport

A supply of a taxable commodity is exempt from the main rate of CCL if it is used for transport in the following categories:

• to propel a train, for example, to electrify train lines
• to propel a non-railway vehicle transporting passengers, for example, to power a ferry
• in a railway vehicle or non-railway vehicle transporting passengers, for example, to light a railway carriage
• in a railway vehicle transporting goods, for example, to light the cab interior of a freight train
• in a ship during a journey which is at any time outside territorial waters, for example, to light a marine freight vessel

The meanings of ‘Railway vehicle’ and ‘train’ are those given at section 83 of the Railways Act 1993:

‘Railway vehicle includes anything which, whether or not it is constructed or adapted to carry any person or load, is constructed or adapted to run on flanged wheels over or along track’.

‘Train’ means:

(a) 2 or more items of rolling stock coupled together, at least one of which is a locomotive
(b) a locomotive not coupled to any other rolling stock’.

‘Non-railway vehicle’ means any vehicle (other than a railway vehicle), or a ship, that is designed or adapted to carry not fewer than 12 passengers.

The exemption does not apply to the transportation of passengers to, from or within a place of entertainment, recreation or amusement, or a place of cultural, scientific, historical, or similar interest if rights of admission or use of facilities are supplied by the person (or a connected person) to whom the taxable commodity is supplied.

For example, supplies of the energy used to run transport at theme parks, or to run historical transport such as trams within museums, are not exempt. This treatment mirrors the VAT legislation that applies a zero rate to tickets sold for normal transportation purposes, but applies VAT at the standard rate to tickets sold in the aforementioned circumstances (read The VAT treatment of passenger transport (VAT Notice 744A) for further information).

To claim the exemption customers must declare to their suppliers that the commodities are being consumed for qualifying purposes (read section 6).

3.4 Supplies to producers of taxable commodities other than electricity

To avoid double taxation, a supply of a taxable commodity is exempt from the main rates of CCL if it is used in the production of taxable commodities other than electricity or the production of other energy sources that are subject to duty (for example, oils liable to hydrocarbon oil duties) or which may be used specifically for energy production. In order to obtain relief, supplier certificates must be provided (read section 6).

The exemption applies to taxable commodities supplied for use in the production of:

• taxable commodities other than electricity
• hydrocarbon oil or road fuel gas
• fuel substitutes defined by the Hydrocarbon Oil Duties Act 1979
• uranium for use in an electricity generation station

For the purposes of the exemption, the production of other energy sources includes the drilling and extraction of oil, but does not include oil exploration.

For a supply of a taxable commodity to be exempt under this relief the energy user and the energy producer must be one and the same entity. Therefore, sub-contractors in the oil industry cannot benefit from this exemption on the taxable commodities they purchase and use unless they themselves are refining or extracting oil.

As a result, the energy supply to and used by a sub-contractor employed by a producer as an engineering consultant (for example) is ineligible for the exemption, and the beneficiaries of the relief are confined to those companies involved in actual production activity.

Examples of exempt and taxable uses are given in section 9.

3.5 Supplies to electricity producers (other than CHP, small generating stations and stand-by generating stations)

Exemption from the main rates of CCL can be claimed on a supply of a taxable commodity if it is to be used for producing electricity in a non-CHP generating station, provided that it is not deemed to be a self-supply of electricity.

From 1 April 2013, this includes supplies to auto-generators and unlicensed suppliers, but excludes supplies to all small generating stations.

From 1 April 2013, the CPS rates of CCL apply to taxable commodities (other than electricity) that are used in a generating station with a generating capacity that exceeds 2MWs. The owner of the generating station is the person responsible for accounting for the CPS rates of CCL to HMRC.

The liability of supplies used in electricity generation is explained in more detail in Excise Notice CCL1/6: a guide to the carbon price floor.

3.6 Supplies by auto-generators or unlicensed electricity suppliers with a generating capacity of more than 2MWs

From 1 April 2013, if you’re an auto-generator or exempt unlicensed electricity supplier with a generating capacity of more than 2MWs (and are not a CHP or stand-by generator), and you make self-supplies of electricity or make supplies of electricity direct to customers, your supplies of electricity will be subject to the main rate of CCL for electricity where these are produced from CPS rate commodities.

If you make supplies to an electricity utility, these supplies will not be subject to CCL as the electricity will be liable to the main rate of CCL for electricity when sold on to a consumer by the utility.

You’re an auto-generator if you generate electricity primarily for your own use and you have title to the input and output fuel. Primarily for your own use means you:

(a) are not treated as an electricity utility for the purposes of any supplies of electricity you make
(b) have consumed, in the previous 3 months, no less than 75% of the electricity produced by you in that period.

3.7 Supplies to small generating stations (other than CHP)

If you’re generator with a combined generating capacity of 2MWs or less, you’re considered to be a small generating station and you will be charged the main rates of CCL on taxable commodities by your supplier. Paragraph 3.8 set outs the liability to main rates of CCL on supplies by small generating stations.

You do not need to register or account for the CPS rates of CCL, as there is no deemed supply when a quantity of a CPS rate commodity is delivered to the site of the generating station.

When calculating generating capacity for a non-CHP generating station, you must take account of all generators that you own or are owned by any person connected with you (even if they burn oil only), regardless of whether the electricity is generated from CPS rate commodities, but excluding any CHP stations or stand-by generators.

The liability of supplies used in electricity generation is explained in more detail in Excise Notice CCL1/6: a guide to the carbon price floor.

3.8 Supplies by small generating stations (other than CHP)

If you’re a small generator and pass some of the electricity you produce to an electricity utility for onward supply to a consumer, you may obtain relief from the main rates of CCL on the fuel that is used to generate that electricity. Relief from CCL on this fuel is obtained through the certification process outlined in section 6. There is no liability to the CPS rates of CCL for fuels used by small generators.

The electricity you pass to an electricity utility will be liable to the main rate of CCL on electricity when sold on by the utility.

3.9 Supplies to stand-by generators

Supplies of taxable commodities for use in stand-by generators are subject to the main rates of CCL charged by your supplier.

Stand-by generators, for the purposes of CCL, are generators used to provide emergency electricity supplies in the event of a failure of a building’s usual electricity supply, and used for no other purpose.

You do not need to register or account for the CPS rates of CCL, as there is no deemed supply when a quantity of a CPS rate commodity is delivered to the site of the stand-by generator, and you do not need to account for CCL on the electricity produced.

Generators that are used for the generation of electricity in order to supply to, or reduce demand from, the grid do not qualify as stand-by generators.

Running generators for routine testing and maintenance purposes does not disqualify them from being stand-by generators.

3.10 Supplies to CHP stations

A supply of a taxable commodity may be exempt from the main rates of CCL where it is to be used in producing any outputs from either a fully exempt or partly exempt CHP station, a:

• fully exempt CHP means a CHP station in respect of which there is in force a certificate (a ‘full-exemption certificate’) given by the Secretary of State for the Department for the Department for Energy Security and Net Zero (DESNZ) stating that the station is a fully exempt CHP for the purposes of CCL
• partly exempt CHP means a CHP station in respect of which there is in force a certificate (a ‘part-exemption certificate’) given by the Secretary of State for DESNZ stating that the station is a partly exempt CHP station for the purposes of CCL

‘Outputs’ are any electricity or motive power produced in the station and any of the following supplied from the station, namely:

(a) heat or steam
(b) air, or water, that has been heated or cooled

Supplier certificates are also required in order to obtain relief from the levy (read section 6).

Information on the extent of the CCL relief that is available on input fuel used in CHP stations can be found in section 3 of Excise Notice CCL1/2: combined heat and power schemes.

A supply of coal or other solid fuel, LPG or gas after 1 April 2013 to a CHP station with a generating capacity of more than 2MWs is liable to the CPS rates of CCL if it is used to generate electricity. Read Excise Notice CCL1/6: a guide to the carbon price floor.

Read more about the Combined Heat and Power Quality Assurance Programme.

3.11 Supplies not used as fuel

A supply of a taxable commodity is exempt from the main rates of CCL if the person to whom the supply is made intends to use the commodity for non-fuel use (that is, other than for heating fuel or motive power). An example of such eligible use is electricity used in electrolytic processes.

A supply of a taxable commodity is also exempt where it is intended to be used partly as fuel and partly not (‘mixed use’), provided its primary use is other than as fuel.

A list of eligible non-fuel uses and mixed uses of taxable commodities may be found in section 10. If you consume energy for these eligible uses and wish to claim this relief you must certify to your supplier that this is the case (Read section 6).

3.12 Supplies of electricity from renewable sources

Electricity is ‘renewable source electricity’ for CCL purposes, if it is generated from sources of energy other than peat, fossil fuel or nuclear fuel and includes biomass and waste. Waste is regarded as a renewable source for the purposes of the exemption, provided fossil fuel does not make up 90% or more of its energy content.

Fossil fuel means:

• coal
• substances produced directly or indirectly from coal
• lignite
• natural gas
• crude liquid petroleum
• petroleum products

‘Natural gas’ and ‘petroleum products’ have the same meanings, as in the Energy Act 1976.

Technologies considered ‘renewable source electricity’ include:

• wind energy
• hydro-power up to 10MWs
• tidal power
• wave energy
• photovoltaics
• photoconversion
• geothermal hot dry rock
• geothermal aquifers
• municipal and industrial wastes
• landfill gas
• gas produced from the treatment of sewage
• agriculture and forestry wastes
• energy crops

Hydro generating stations with a declared net capacity of more than 10 megawatts are excluded from the CCL definition of ‘renewable source electricity’.

Supplies of electricity from renewable sources not liable to CCL

Where you are an auto-generator or exempt unlicenced supplier, there is no requirement to account for CCL on self or direct supplies of renewable source electricity.

Direct supplies means a supply made under a contract involving only the renewable generator and the customer, with no intermediary third-party taking ownership of the electricity. Direct supplies include those made by the distribution system of a licensed electricity distributor, provided no one else takes ownership of the electricity.

There is no requirement to provide forms Climate Change Levy: relief supporting analysis (PP10) and Climate Change Levy supplier certificate (PP11) where renewable source electricity is not liable to main rates of CCL. When claiming other reliefs, renewable source supplies must be deducted.

Supplies of electricity from renewable sources liable to CCL

Where renewable source electricity is supplied (including self-supplies) by a utility, this is a taxable supply of electricity. Where such electricity is supplied by a third party, this is also a taxable supply of electricity. The third party will be liable to register for the main rates of CCL (if not already registered) and must account for the main rate of CCL due on that taxable supply of electricity.

Different rules may apply for self or direct supplies of electricity from combined heat and power stations. Read section 3.13 in this notice and Excise Notice CCL1/2: combined heat and power schemes.

3.13 Supplies of electricity from CHP stations

CHP integrates the production of usable heat and power in a single process. CHP stations are energy efficient in operation, providing very significant fuel savings and as a result, cost and efficiency savings, over conventional forms of electricity generation and heat supply.

Where a CHP station is registered and certified annually under the CHPQA programme and in possession of a valid CCL Exemption Certificate issued by the Secretary of State for DESNZ, it is treated for CCL purposes according to its CHPQA certificate.

Information on the CCL treatment of electricity from CHP stations, including advice about arrangements for the removal of the exemption from 1 April 2013 for electricity produced in a CHP station that is supplied to the final consumer by an electricity utility, can be found in Excise Notice CCL1/2: combined heat and power schemes.

3.14 Mineralogical and metallurgical processes

From 1 April 2014 mineralogical or metallurgical processes are exempt from the main rates of CCL for energy used in mineralogical processes or metallurgical processes.

Businesses that currently participate in the Climate Change Agreement (CCA) Scheme (Read section 4) and become wholly exempt from the main rates of CCL as a result of the introduction of these new exemptions may choose to withdraw from the CCA Scheme.

Where businesses continue to derive a benefit from the CCA Scheme (because not all of their energy use will qualify for the new CCL exemptions) they will be able to retain their agreements. To avoid the unintended consequence that businesses withdrawing from the CCA Scheme will become liable to enrol in the Energy Efficiency Scheme, an exemption from the scheme has been introduced that mirrors the scope of these new CCL exemptions.

A list of the mineralogical and metallurgical processes that qualify for exemption are found in Annex A. This annex also provides guidance on energy uses accepted as falling within the scope of the exemptions, where incurred in the course of a qualifying process.

To claim the exemption, customers must declare to their suppliers that the commodities are being consumed for qualifying purposes (Read section 6).

4. Supplies at the reduced rate of CCL for businesses in CCAs

4.1 Eligibility for the reduced rate and the CCA Scheme

From 1 July 2016 there are new reporting requirements for companies who hold a CCA. To find out if this applies to you, read Climate change agreements: information to report to HMRC.

Energy intensive businesses that have entered into a CCA with the Environment Agency (EA) can claim the reduced rate of CCL, which is a reduction on the main rates of CCL.

For the purposes of the CCL, a taxable supply is a reduced rate supply if both:

• the taxable commodity is supplied to a facility certified by the EA as a facility which is to be taken as being covered by a CCA for a period specified in the certificate
• the supply is made at a time falling in that period

The level of the reduced rate varies according to taxable commodity. Read about Climate Change Levy rates.

Energy intensive users are either those:

• that operate Part A installations within the meaning given in regulation 3(2) of the Environmental Permitting (England and Wales) Regulations 2007
• whose predicted energy costs amount to 10% or more of their production value, or whose predicted energy costs amount to between 3% and 10% of their production value and who also experience an import penetration ratio of at least 50%

Facilities covered by a CCA are required to deliver energy efficiency or carbon saving reduction targets in return for paying a reduced rate of CCL.

The overall policy responsibility for the agreements lies with DESNZ but the scheme is administered by the EA. Applications to join the scheme and queries regarding eligibility should be made to the EA. Our role is limited to overseeing the application of the reduced rate of CCL once a business has been certified by the EA as a participant of the scheme.

Once the EA has received, checked and accepted the agreement and eligibility forms from the sector association, a CCA certificate is issued to the agreement holder and a copy sent to the sector association. The agreement notices may be found on the EA website. The certificate is used by the facility to support a claim for relief of CCL from HMRC. It sets out the date from which the CCL relief will apply.

Further information about Climate change agreements is available.

In certain circumstances the EA might issue a variation certificate. If a variation occurs, the agreement holder must submit revised versions of the Climate Change Levy: relief supporting analysis (PP10) and Climate Change Levy supplier certificate (PP11) forms reflecting the change in their entitlement to CCL relief (Read section 6).

4.2 How agreement holders tell their energy supplier that they’re entitled to pay the reduced rate

Once a CCA is signed, CCA holders should use the certification process outlined in section 6 to tell their energy supplier that they’re entitled to pay the reduced rate of CCL (and, where appropriate, when they cease to be entitled). The reduced rate is applicable to supplies that are made at a time falling within the period covered by the agreement.

4.3 How performance affects entitlement to the reduced rate under the agreements affect entitlement

Performance under the CCA Scheme is reviewed regularly. If a facility has not met its targets under the scheme during one period, it may not be certified by the EA as eligible to continue to receive CCL reduced rate supplies during the next period. In these circumstances the CCA holder must submit a new Climate Change Levy: relief supporting analysis (PP10) and Climate Change Levy supplier certificate (PP11) (Read section 6) to terminate the reduced rate relief.

5. Former lower rates

Supplies for use in metal recycling processes

From 1 April 2012, a lower rate of CCL applied for energy used in certain metal recycling processes. This was replaced by the exemption for energy used in metallurgical processes from 1 April 2014 (read paragraph 3.14).

6. Claiming reliefs through certificates

6.1 What you need to do

Where you’re claiming a relief from the main rate of CCL (except for certain renewable source electricity supplies and the exemption for certain supplies from a CHP), you must complete 2 forms.

The first of these, Climate Change Levy: relief supporting analysis (PP10), sets out what reliefs you want to claim and requires you to estimate your usage against each relief. This information is then used to calculate your overall percentage relief entitlement. Examples of how to complete the table part of the form can be found in Annex B, and explanatory notes can be found on the form itself.

The second form, Climate Change Levy supplier certificate (PP11), takes the percentage relief calculated on your PP10 form for a given taxable commodity, so your energy supplier can apply the correct rate to your bill.

6.2 Customer and supplier responsibilities

6.2.1 Customer responsibilities

The customer must:

• fully and accurately complete the appropriate boxes on the Climate Change Levy: relief supporting analysis (PP10) and Climate Change Levy supplier certificate (PP11) (any errors on the supplier certificate that result in an underpayment of levy could render the customer liable to a penalty — read Excise Notice CCL1/5: penalties and interest)
• provide us with the Climate Change Levy: relief supporting analysis (PP10) form
• deliver the Climate Change Levy supplier certificate (PP11) to the supplier at a specified address (‘address’ means a postal address, an email address, or an internet address — although energy suppliers must accept PP11s from their customers on paper, acceptance by email or by the internet is at the supplier’s discretion)
• where there is no longer any entitlement to any relief, submit a new Climate Change Levy: relief supporting analysis (PP10) and Climate Change Levy supplier certificate (PP11) to their energy supplier showing a relief claimed of 0%
• be able to prove, if necessary, the date on which the energy supplier received the Climate Change Levy supplier certificate (PP11) (for example, where paper supplier certificates are submitted by post, the customer may wish to use recorded delivery)
• only submit a retrospective Climate Change Levy supplier certificate (PP11) if there is not one already in place (read paragraph 6.6)
• review their entitlement to reliefs and exemptions at least annually
• review their entitlement to relief where circumstances cause a change in the account details
• where there is a change of supplier, submit an updated Climate Change Levy: relief supporting analysis (PP10) form to us and Climate Change Levy supplier certificate (PP11) to a new energy supplier
• retain copies of both forms for verification by us

6.2.2 Supplier responsibilities

The supplier must:

• accept paper Climate Change Levy supplier certificates (PP11) from its customers — it may also wish to offer an electronic facility such as email or an internet page
• make sure that the relief claimed is applied to the stated account (the supplier may be required to account for any CCL due as a result of errors in applying the relief)
• accept a retrospective Climate Change Levy supplier certificate (PP11) from its customers only if there is not one already in place (read paragraph 6.6)
• retain Climate Change Levy supplier certificates (PP11) for inspection by us
• process correctly completed Climate Change Levy supplier certificates (PP11) within 5 working days of receipt

6.3 Review of relief entitlement

Customers must review the correctness of Climate Change Levy supplier certificates (PP11) no later than the earlier of the 60th day:

• following the anniversary of the date on which the Climate Change Levy supplier certificate (PP11) was delivered to the supplier
• after the customer has burned (or in the case of electricity, consumed) the last of the taxable commodity supplied to which the Climate Change Levy supplier certificate (PP11) relates

When a customer’s review identifies differences between actual relief entitlement and the amount of relief claimed in a review period, action must be taken in accordance with the following:

Relief claimed is too high resulting in an underpayment of CCL

The excess is treated as being a taxable self-supply and you must notify us of your liability to register. Although in certain circumstances, exemption from registration may be granted (read paragraph 6.5). You must not submit a retrospective certificate to your energy supplier to correct the previous percentage of relief applied.

Relief claimed is too low resulting in an overpayment of CCL

A claim for tax credit must be made (read paragraph 6.6).

Where the relief entitlement claimed matches the actual entitlement, no action is required and your certificate remains in force.

A correct Climate Change Levy supplier certificate (PP11) can remain valid for a maximum of 5 years, after which a new one must be submitted to the energy supplier.

Where you no longer have any entitlement to any relief, you must submit a new Climate Change Levy: relief supporting analysis (PP10) form to us and Climate Change Levy supplier certificate (PP11) to your energy supplier showing a relief claimed of 0%.

6.4 If you cease to trade

Where you cease to trade, a review of your certified entitlement to CCL reliefs must be carried out in accordance with the guidance in paragraph 6.3.

A review must also be carried out when a business changes hands. In this case, although the energy consumption position might not change, the tax liability cannot pass to the new owner. The new business owner will have to complete and submit their own Climate Change Levy: relief supporting analysis (PP10) and Climate Change Levy supplier certificate (PP11).

6.5 Too much relief claimed — liability to register for CCL

If you make taxable supplies, including taxable self-supplies, you must notify us accordingly and register for CCL. Unlike VAT there is no registration threshold.

Where a liability to register arises solely as a result of the review of relief entitlement, we may exempt a person from registration under certain conditions.

6.6 Underclaimed CCL relief

There are 2 scenarios where you may have claimed too little CCL relief:

• you’re entitled to CCL relief but do not have a Climate Change Levy supplier certificate (PP11) in place
• a Climate Change Levy supplier certificate (PP11) is in place, but a review (read paragraph 6.3) identifies the percentage of relief claimed was too low

Sub-sections 6.6.1 and 6.6.2 explain what to do in these circumstances.

6.6.1 No existing PP10 and PP11 in place

If you’re entitled to CCL relief but were charged CCL at a higher rate because:

• you changed supplier and did not tell the new supplier about your relief entitlement
• the ownership of facilities within a CCA changed and the new owner did not tell the supplier they’re entitled to CCL relief entitlement
• any other administrative oversight that meant your supplier did not know you were entitled to CCL relief entitlement

In these cases there will not be an existing Climate Change Levy: relief supporting analysis (PP10) and Climate Change Levy supplier certificate (PP11) in place. You may submit retrospective PP10 and PP11 forms to HMRC and your energy supplier respectively, seeking any forgone relief entitlement up to maximum of 4 years.

This process does not apply to supplies for domestic or non-domestic charity use. You may seek retrospective claim for these supplies by submitting a VAT reduced rate certificate to your energy supplier.

6.6.2 Current PP11 in place — relief claimed too low

If you have been claiming CCL relief using forms PP10 and PP11, but a review (read paragraph 6.3) identifies the relief percentage claimed was too low resulting in an overpayment of CCL, you can claim the difference back from HMRC, using form CCL200x.

You need to submit the completed form CCL200X along with adequate evidence to support your claim. If you do not supply adequate evidence we will not be able to process your claim.

Good quality evidence should include the following:

• copies of:
  • both your PP10 (the form sent to HMRC) and PP11 (the form sent to your supplier) covering the period of your reimbursement claim
  • invoices for the taxable commodities you consumed from your supplier for the period of your reimbursement claim
• a summary of the total amount of CCL to be reimbursed accompanied by a breakdown showing CCL to be reimbursed by month
• if applicable a copy of your:
  • CHPQA certificate
  • current CCA
• any appropriate correspondence between you and your supplier received prior to making a claim with HMRC, for example, a letter asking your supplier why your bills do not contain the relief you’re entitled to

If you’re an agent acting on behalf of a claimant you must provide a letter of authority from them.

6.6.3 When you’ll receive any CCL220X repayment

We expect to authorise repayment of an acceptable claim within a reasonable period — normally 30 days from the date the claim for tax credit is received. But if we have to make enquiries about your claim or sort out errors, the 30-day period can be extended while enquiries are made.

6.7 Businesses affected by amendment of the relief formula

The level of relief that can be claimed may be changed from time to time. When relief level changes are made, changes will also be made to the formula used to calculate relief entitlement.

Businesses affected by any relief level changes must, by the time of their first annual review following the change, give HMRC a new PP10, and their energy supplier a new PP11 certificate. The new PP10 and PP11 must use the amended formula to calculate relief entitlement.

We strongly encourage claimants to submit new PP10 and PP11 forms as soon as possible following a change in relief level. This will help minimise the risk of over or under paying tax which would result in having to make a claim or paying back the difference.

6.8 Varying a Climate Change Levy supplier certificate (PP11)

You may give your supplier a further certificate updating the information in the original supplier certificate at any time to reflect anticipated or actual events.

6.9 Entitlement to relief for persons making onward supplies on behalf of qualifying customers

6.9.1 Supplies from a utility through a landlord or other third party

In some cases, the final consumer may not receive its supply direct from a utility, perhaps because it is a tenant of the person who receives supplies from the utility, or because of some other arrangement such as bulk buying under which one person receives the supply from the utility and makes onward supplies to others.

Under normal circumstances, the consumer might be eligible for one or more of the reliefs detailed at sections 2 to 4 but unable to benefit from them because it cannot give the utility a supplier certificate.

In the following paragraphs the terms landlord and tenant should be regarded as applying equally to parties with similar supply arrangements unless otherwise specified.

6.9.2 Circumstances in which a landlord may submit a supplier certificate on their tenant’s or tenants’ behalf

Taxable commodities used in transport

A third party receiving the supply direct from the utility may give the utility a Climate Change Levy supplier certificate (PP11) on behalf of a consumer who intends to use the taxable commodities for transport purposes. This is because the legislation governing that exemption refers to the use of the taxable commodity for a purpose rather than by a person.

CHP

Where a CHP is operated by a third party on behalf of a principal and the third party purchases the input fuel, they may give the supplier a certificate declaring entitlement to CCL relief. This is because the legislation governing the exemption for input fuels used in a CHP refers to a supply to a person who intends to cause the commodity to be used in a fully exempt or partly exempt CHP.

From 1 April 2013, the CPS rates of CCL apply to taxable commodities (other than electricity) that are used in a generating station with a generating capacity that exceeds 2MWs. The operator of the CHP station is the person responsible for accounting for the CPS rates of CCL to HMRC.

The liability of supplies used in electricity generation is explained in more detail in Excise Notice CCL1/6: a guide to the carbon price floor.

Persons entering CCAs

Where there is a single agreement covering an entire site (for example, the site and facility boundaries coincide) a landlord can give their energy supplier a Climate Change Levy supplier certificate (PP11) on behalf of the tenants as well as themselves where:

(a) all occupants of the site or facility are entitled to pay the reduced rate of CCL and have no entitlement to any other reliefs
(b) the landlord is entitled to receive the CCL exemptions for supplies for non-fuel use or for use in metal recycling processes in addition to the reduced rate, but the tenants are only eligible for the reduced rate

Since the landlord’s Climate Change Levy supplier certificate (PP11) will cover both their own and their tenants’ energy consumption, they will be held responsible for any underpaid tax should the certificate prove to be incorrect.

Similar arrangements will apply where there are 2 or more operators on a site and energy is supplied to one of the operators who in turn supplies to the others.

Where there are separate facilities on different parts of a site, and the facilities have separate agreements, the landlord can give the supplier a Climate Change Levy supplier certificate (PP11) on behalf of the tenants as well as themselves, provided both the landlord’s and tenants’ premises are facilities covered by agreements and one of the criteria at (a) or (b) is met.

Supplies for use in mineralogical or metallurgical processes

The landlord may give a Climate Change Levy supplier certificate (PP11) on behalf of tenants who are entitled to receive the exemptions for supplies for non-fuel use or for use in mineralogical or metallurgical processes.

6.9.3 Other possible solutions where tenants receive supplies through a landlord and not direct from a utility

The following are examples only. Businesses in a landlord and tenant relationship or with similar arrangements must determine which of these solutions, if any, are suitable for them.

(a) The tenant could obtain a dedicated supply direct from a utility. Although this will not always be physically possible it is the ideal solution as the final consumer will themselves be able to give the supplier a Climate Change Levy supplier certificate (PP11) and obtain relief for their own use.

(b) A landlord may apply to us for ‘directed utility’ status. If we accept an application and direct that a landlord is to be treated as a utility for CCL purposes, supplies to them from a licensed utility will be outside the scope of CCL. As a directed utility the landlord will have to fulfil certain obligations including registering with us, accounting for CCL when taxable commodities are sold on, and obtaining Climate Change Levy supplier certificates (PP11) from customers to evidence their relief entitlement.

Where taxable commodities are used by the directed utility themselves, this will be a self-supply on which they will need to account for CCL. If the directed utility is entitled to claim relief on such self-supplies, they will in effect need to claim relief from themselves, and should follow the Climate Change Levy: relief supporting analysis (PP10) and Climate Change Levy supplier certificate (PP11) process (read paragraphs 6.1 and paragraph 6.2).

6.9.4 When HMRC will make a direction

We will only make directions in 2 situations:

• where CCL is not being charged on supplies although it should be
• where a non-utility supplier has customers that would be entitled to reliefs, that can only be made available by a utility

In the second situation, we will only make a direction on the request of the person who wishes to be treated as a utility.

We will only direct that someone be treated as a utility for CCL purposes where:

• they are supplying gas or electricity to customers and making the direction allows those customers to obtain CCL relief, which they could not otherwise obtain
• there are genuine commercial or practical reasons why customers cannot purchase their gas or electricity direct from a licensed supplier

6.10 Change of supplier

Where you decide to change supplier, any Climate Change Levy supplier certificate (PP11) delivered to the earlier supplier ceases to have effect. You must provide the new supplier with a certificate in order to obtain any CCL relief due.

Should your supplier change other than at your request, providing your Climate Change Levy supplier certificate (PP11) has been transferred to your new supplier, continuity of that certificate is retained.

6.11 Wholesale suppliers of LPG and solid fuels getting Climate Change Levy supplier certificates (PP11) from their customers

We have agreed with the trade bodies representing LPG and solid fuel wholesale suppliers that the taxable commodities supplied to their customers for onward re-sale can be certified in a less formal way. If you’re in that situation you should contact us for further guidance on what information needs to be sent to HMRC.

6.12 Other situations

The principles set out in section 6 cover the most common situations and especially those where a business’s energy consumption does not change significantly from year to year.

General guidance cannot cover every situation. If any other situation arises that is not covered in section 6 you should contact us and we will work with you to resolve it.

7. Supporting analysis of relief for Climate Change Levy (PP10)

Use form PP10 Climate Change Levy: relief supporting analysis.

8. Claim relief against the main rates of Climate Change Levy (PP11)

Use form PP11 Climate Change Levy supplier certificate (PP11).

9. Examples of production use qualifying for exemption

9.1 Uses covered by the exemptions set out in paragraphs 3.4 to 3.6

All taxable commodities used on production premises are exempt from the main rates of CCL unless they’re clearly not necessary for, or directly related to, the production process.

Taxable commodities used by producers at remote sites may also be exempt if there is a strong link with the production process.

Examples of exempt and non-exempt uses are given in sub-paragraphs 9.1.1, 9.1.2 and 9.1.3. If the quantities supplied do not exceed the de minimis thresholds set out at paragraph 2.5, there is no liability to the main rates of CCL.

9.1.1 Production sites — exempt uses

Production site	Production site
Canteen	Switch rooms
Car park lighting	Pumps
General office lighting and heating	Control room
Toilets	Generation start up
Stores (including record archives)	Cranes or lifting equipment
Weighbridge	Workshop
Conveyor belts	Tunnel lighting
Crushers	Production area lighting
Extraction equipment	Compressors
Environmental protection equipment	Perimeter lighting
Reception heating and lighting	Alarm systems
Staff rest room	Shower rooms
Medical centre	Laundry rooms
Fire station	Laboratories

9.1.2 Production sites — non-exempt uses

Production sites:

• HQ administration facilities
• call centres
• visitor centres

9.1.3 Sites remote from production

Exempt uses	Non-exempt uses
Production, transport of oil and gas, to the point of the primary or pipeline distribution terminal (primary distribution terminals are those receiving supplies direct from a refinery)	Road tanker delivery
Production, transport and bottling of LPG production, transport of AVTUR to the point of loading into an aircraft	Wholesale or retail
Procurement of production equipment by producer	Commercial, contractual
Production technical support provided by the producer	Legal
Emergency response units (for example, for oil platforms provided by the producer)	Tax
Oil field operations support, logistics by the producer	IT equipment, support

10. Uses of taxable commodities that are to be taken as not being used for fuel purposes

The following processes using taxable commodities are exempt from the main rates of CCL.

10.1 Wholly non-fuel uses

Electricity in electrolysis for the production of:

• flourine
• chloroalkali (chlorine, caustic soda and caustic potash)
• hydrogen peroxide, persulphates, chlorates and peroxyorganic acids by electro-oxidation
• basic materials directly from an ore or other compound (electrowinning)
• advanced chemicals from other more basic chemicals

Electricity in the following types of electrolysis:

• electro-organic synthesis of fine organics and intermediates such as adiponitrile
• to purify materials (as distinct from electrowinning)
• involving sodium chlorate, potassium permanganate, potassium dichromate, manganese dioxide, cuprous oxide, sorbitol, fatty alcohols

Electricity in battery formation.

Natural gas:

• as feedstock to produce hydrogen and for hydrogenation reactions
• in the production of hydrogen and carbon monoxide for the reduction and subsequent purification of nickel
• as a feedstock in producing acetic acid and acetic anhydride by a partial oxidation process
• to provide carbon in producing carbon-carbon composites
• in manufacturing sodium cyanide
• and propane in steam reformers to produce a mixture of hydrogen and carbon monoxide in the production of:
  • fertilisers
  • OXO (oxonation) chemicals — detergent and plasticiser alcohols
  • phosgene
  • ammonia
  • higher alcohols, synthetic fuels, plastics precursors
  • methanol methyl tertiary butyl ether, formaldehyde, formic acid, acetic acid, methyl amines, single cell proteins

Methane as a feedstock in producing higher paraffins and their derivatives.

Liquefied petroleum gas as:

• a propellant in aerosols
• feedstock in the cracking process to produce lower olefins

Lower olefins as feedstock for conversion by chemical processes.

Propylene as feedstock in the manufacture of propan-2-ol (iso-propyl alcohol), polypropylene and cumene.

Petroleum coke in the manufacture of carbon and graphite electrodes.

Coke:

• as a resistor in electro-thermal furnaces
• in the manufacture of titanium dioxide by the chloride process

10.2 Mixed uses

These mixed uses are the only ones that involve relevant commodities being used partly as fuel and partly not, but which are specified as being uses that are not to be taken as being uses of those commodities as fuel.

1. Coke as a source of carbon dioxide in the ammonia soda process for producing soda ash

2. Coal, coke and anthracite used for its structural properties as a bedding agent in the extraction of gas from waste material

3. Natural gas as a reductant in emission control systems, for example, in the reduction of oxides of nitrogen

4. Natural gas in the manufacture of methocrylate monomers and polymers including that natural gas used for emission control which is an integral and essential part of the manufacturing process

5. Natural gas as feedstock in the production of carbon black

6. Liquid propane in the production of ethylene where heat is provided either by combustion of the waste products or from another source

7. Commodities in the reduction of chlorine

A number of mixed use exemptions from CCL were discontinued from 1 April 2014, since they’re metallurgical processes and will qualify for the new metallurgical exemption (read paragraph 3.14) from that date. A list of the discontinued mixed uses is provided in Annex A.

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Annex A — guidance on the exemptions for use in mineralogical and metallurgical processes

1. Introduction

This annex sets out the scope of the exemptions referred to in paragraph 3.14.

Processes that qualify for the mineralogical exemption are set out in section 2 of this annex.

Processes that qualify for the metallurgical exemption are set out in section 3 of this annex.

Section 4 of this annex provides an indicative list of energy uses accepted as falling within the scope of the exemptions where incurred in the course of a qualifying process.

Where energy costs incurred at a site relate to both exempt and non-exempt processes, the energy usage must be apportioned on a fair and reasonable basis.

Details of how to claim the exemptions are set out in section 6.

2. Mineralogical processes

2.1 Manufacture of flat glass

This includes the manufacture of flat glass, including wired, coloured or tinted flat glass.

2.2 Shaping and processing of flat glass

This includes the manufacture of:

• toughened or laminated flat glass
• coated glass
• glass mirrors
• multiple-walled insulating units of glass

2.3 Manufacture of hollow glass

This includes the manufacture of:

• bottles and other containers of glass or crystal
• drinking glasses and other domestic glass or crystal articles

This excludes the:

• reprocessing of post — consumer glass
• bottling of liquids
• retail sale of glassware

2.4 Manufacture of glass fibres

This includes the manufacture of glass fibres, including glass wool and non-woven products thereof.

This excludes the manufacture of:

• woven fabrics of glass yarn
• fibre optic cable for data transmission or live transmission of images

2.5 Manufacture and processing of other glass, including technical glassware

This includes the manufacture of:

• laboratory, hygienic or pharmaceutical glassware
• clock or watch glasses, optical glass and optical elements not optically worked
• glassware used in imitation jewellery
• glass insulators and glass insulating fittings
• glass envelopes for lamps
• glass figurines
• glass paving blocks
• glass in rods or tubes
• ballotini and glass beads
• other blown, drawn or moulded glass products

This excludes the manufacture of optical elements optically worked.

2.6 Manufacture of refractory products

This includes the manufacture of:

• refractory mortars, concretes, and so on
• refractory ceramic goods:
  • heat-insulating ceramic goods of siliceous fossil meals
  • refractory bricks, blocks and tiles, and so on
  • retorts, crucibles, muffles, nozzles, tubes, pipes, and so on
• refractory articles containing magnesite, dolomite or chromite

This excludes the mining of refractory clays.

2.7 Manufacture of ceramic tiles and flags

This includes the manufacture of non-refractory ceramic:

• hearth or wall tiles, mosaic cubes, and so on
• flags and paving

This excludes the manufacture of artificial stone (for example, cultured marble).

2.8 Manufacture of bricks, tiles and construction products, in baked clay

This includes the manufacture of:

• structural non-refractory clay building materials
• ceramic bricks, roofing tiles, chimney pots, pipes, conduits, and so on
• flooring blocks in baked clay

This excludes the mining of clay and shale.

2.9 Manufacture of ceramic household and ornamental articles

This includes the manufacture of:

• ceramic tableware and other domestic or toilet articles
• statuettes and other ornamental ceramic articles

This excludes the retail sale of ceramic household and ornamental articles at the place of production.

2.10 Manufacture of ceramic sanitary fixtures

This includes the manufacture of:

• ceramic sanitary fixtures, for example, sinks, baths, bidets, water closet pans, and so on
• other ceramic fixtures

2.11 Manufacture of ceramic insulators and insulating fittings

This includes the manufacture of electrical insulators and insulating fittings of ceramics.

2.12 Manufacture of other technical ceramic products

This includes the manufacture of:

• ceramic and ferrite magnets
• ceramic laboratory, chemical and industrial products

This excludes the manufacture of artificial stone (for example, cultured marble).

2.13 Manufacture of other ceramic products

This includes the manufacture of:

• ceramic pots, jars and similar articles of a kind used for conveyance or packing of goods
• prepared bodies for use in ceramic manufacture
• calcined minerals for use in ceramic manufacture
• ceramic products not elsewhere classified

2.14 Manufacture of cement

This includes the:

• manufacture of clinkers and hydraulic cements, including Portland, aluminous cement, slag cement and superphosphate cements
• grinding and preparation of raw meal kiln feed for cement clinker

This excludes the:

• quarrying, crushing and breaking of limestone
• manufacture of cements used in dentistry

2.15 Manufacture of lime and plaster

This includes the manufacture of:

• quicklime, slaked lime and hydraulic lime
• precipitated calcium carbonate
• plasters of calcined gypsum or calcined sulphate
• calcined dolomite

This excludes the:

• quarrying and crushing of limestone, chalk or dolomite up until the point at which the feedstone is prepared for direct kiln input
• mining of:
  • gypsum and anhydrite
  • chalk and uncalcined dolomite

2.16 Manufacture of concrete products for construction purposes

This includes the manufacture of:

• precast concrete, cement or artificial stone articles for use in construction in tiles, flagstones, bricks, blocks, boards, sheets, panels, pipes, posts, and so on
• prefabricated structural components for building or civil engineering of cement, concrete or artificial stone

2.17 Manufacture of plaster products for construction purposes

This includes the manufacture of plaster articles for use in construction for boards, sheets, panels, and so on.

2.18 Manufacture of ready-mixed concrete

This includes the manufacture of ready-mix and dry-mix concrete, mortar and screeds.

2.19 Manufacture of mortars

This includes the manufacture of powdered mortars.

2.20 Manufacture of fibre cement

This includes the manufacture of:

• building materials of vegetable substances (wood wool, straw, reeds, rushes) agglomerated with cement, plaster or other mineral binder
• articles of asbestos-cement or cellulose fibre-cement or the like — corrugated sheets, other sheets, panels, tiles, tubes, pipes, reservoirs, troughs, basins, sinks, jars, furniture, window frames, and so on

2.21 Manufacture of other articles of concrete, plaster and cement

This includes the manufacture of other articles of concrete, plaster, cement or artificial stone statuary, furniture, bas-and-haut-reliefs, vases, flowerpots, and so on.

2.22 Cutting, shaping and finishing of stone

This includes the:

• cutting, shaping and finishing of stone for use in construction, in cemeteries, on roads, as roofing, and so on
• manufacture of stone furniture

This excludes quarrying or mining operations, for example, production of rough cut stone, production of millstones, abrasive stones and similar products.

2.23 Production of abrasive products

This includes the manufacture of millstones, sharpening or polishing stones and natural or artificial abrasive products on a support, including abrasive products on a soft base (for example, sandpaper).

2.24 Manufacture of other non-metallic mineral products

This includes the manufacture of:

• friction material and unmounted articles thereof with a base of mineral substances or of cellulose
• mineral insulating materials — slag wool, rock wool and similar mineral wools; exfoliated vermiculite, expanded clays and similar heat-insulating, sound-insulating or sound-absorbing materials
• articles of diverse mineral substances — worked mica and articles of mica, of peat, of graphite (other than electrical articles), and so on
• articles of asphalt or similar material, eg asphalt-based adhesives, coal tar pitch etc
• roadstone coating (asphalt)
• carbon and graphite fibre and products including electrodes
• artificial corundum

3. Metallurgical processes

3.1 Manufacture of basic iron and steel and of ferro-alloys

This includes the:

• production of iron ore sinter
• preheating and melting of scrap iron or steel
• operation of blast furnaces, steel converters, rolling and finishing mills
• production of pig iron and spiegeleisen in pigs, blocks or other primary forms of production of ferro-alloys
• production of ferrous products by direct reduction of iron and other spongy ferrous products
• production of iron of exceptional purity by electrolysis or other chemical processes
• remelting of scrap ingots of iron or steel
• production of granular iron and iron powder
• production of steel in ingots or other primary forms production of semi-finished products of steel manufacture of hot-rolled and cold-rolled flat-rolled products of steel
• manufacture of hot-rolled bars and rods of steel manufacture of hot-rolled open sections of steel
• manufacture of sheet piling of steel and welded open sections of steel
• manufacture of railway track materials (unassembled rails) of steel

This excludes the:

• mining, benefication and agglomeration of iron ores
• breaking up of end of life goods

3.2 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel

This includes the manufacture of:

• seamless tubes and pipes of circular or non-circular cross section and of blanks of circular cross section, for further processing, by hot rolling, hot extrusion or by other hot processes of an intermediate product which can be a bar or a billet obtained by hot rolling or continuous casting
• precision and non-precision seamless tubes and pipes from hot rolled or hot extruded blanks by further processing, by cold-drawing or cold-rolling of tubes and pipes of circular cross section and by cold drawing only for tubes and pipes of non-circular cross section and hollow profiles
• welded tubes and pipes of an external diameter exceeding 406.4mm, cold formed from hot rolled flat products and longitudinally or spirally welded
• welded tubes and pipes of an external diameter of 406.4mm or less of circular cross section by continuous cold or hot forming of hot or cold rolled flat products and longitudinally or spirally welded and of non-circular cross section by hot or cold forming into shape from hot or cold rolled strip longitudinally welded
• welded precision tubes and pipes of an external diameter of 406.4mm or less by hot or cold forming of hot or cold rolled strip and longitudinally welded delivered as welded or further processed, by cold drawing or cold rolling or cold formed into shape for tube and pipe of non-circular cross section
• flat flanges and flanges with forged collars by processing of hot rolled flat products of steel
• butt-welding fittings, such as elbows and reductions, by forging of hot rolled seamless tubes of steel
• threaded and other tube or pipe fittings of steel

3.3 Manufacture of other products of first processing of steel

This includes the manufacture of:

• steel bars and solid sections of steel by cold drawing, grinding or turning
• coated or uncoated flat rolled steel products in coils or in straight lengths of a width less than 600 mm by cold re-rolling of hot-rolled flat products or of steel rod
• open sections by progressive cold forming on a roll mill or folding on a press of flatrolled products of steel
• cold-formed or cold-folded, ribbed sheets and sandwich panels
• drawn steel wire, by cold drawing of steel wire rod

This excludes the manufacture of derived wire products.

3.4 Precious metals production

This includes the production:

• and refining of unwrought or wrought precious metals: gold, silver, platinum, and so on, from ore, scrap, residues and concentrates
• of:
  • precious metal alloys
  • precious metal semi-products
  • silver rolled onto base metals
  • gold rolled onto base metals or silver
  • platinum and platinum group metals rolled onto gold, silver or base metals

This also includes the manufacture of:

• wire of these metals by drawing
• precious metal foil laminates

This excludes the:

• mining of precious metals
• breaking up of end of life goods
• manufacture of precious metal jewellery

3.5 Aluminium production

This includes the:

• production of aluminium from alumina
• production of aluminium from electrolytic refining of aluminium waste and scrap
• production of aluminium alloys
• semi-manufacturing of aluminium
• manufacture of wire of these metals by drawing
• production of aluminium oxide (alumina)
• production of aluminium wrapping foil
• manufacture of aluminium foil laminates made from aluminium foil as primary component

This excludes the breaking up of end of life goods.

3.6 Lead, zinc, tin and copper production

This includes the:

• production of lead, zinc, tin and copper from ores
• production of lead, zinc and tin from electrolytic refining of lead, zinc, tin and copper waste and scrap
• production of lead, zinc, tin and copper alloys
• semi-manufacturing of lead, zinc, tin and copper
• manufacture of wire of these metals by drawing
• production of tin foil
• manufacture of copper fuse wire or strip

This excludes the:

• mining and preparation of ores of lead, zinc, tin and copper
• breaking up of end of life goods

3.7 Other non-ferrous metal production

This includes the:

• production of chrome, manganese, nickel, and so on, from ores or oxides
• production of chrome, manganese, nickel, and so on, from electrolytic and aluminothermic refining of chrome, manganese, nickel, and so on, waste and scrap
• production of alloys of chrome, manganese, nickel, and so on
• semi-manufacturing of chrome, manganese, nickel, and so on
• production of mattes of nickel
• manufacture of wire of these metals by drawing
• production of metallised carbon products

This excludes the:

• mining and preparation of ores of chrome, manganese, nickel, and so on
• breaking up of end of life goods

3.8 Casting of iron and steel

This includes the:

• casting of semi-finished iron and steel products
• casting of grey iron castings
• casting of spheroidal graphite iron castings
• casting of malleable cast-iron products
• manufacture of seamless tubes and pipes of steel by centrifugal casting
• manufacture of tubes, pipes and hollow profiles and of tube or pipe fittings of cast-iron or cast-steel

This excludes the fabrication of finished goods, including any post-production assembly or machining processes.

3.9 Casting of light metals

This includes the casting of:

• semi-finished products of aluminium, magnesium, titanium, zinc, and so on
• light metal castings

This excludes the fabrication of finished goods, including any post-production assembly or machining processes.

3.10 Casting of other non-ferrous metals

This includes the:

• casting of heavy metal castings
• casting of precious metal castings
• die-casting of non-ferrous metal castings

This excludes the fabrication of finished goods, including any post-production assembly or machining processes.

3.11 Forging, pressing, stamping and roll-forming of metal

This includes the forging, pressing, stamping and roll-forming of metal.

This excludes the fabrication of finished goods, including any post-production assembly or machining processes.

3.12 Powder metallurgy

This includes the production of metal powders and the production of metal objects directly from metal powders by heat treatment (sintering) or under pressure.

3.13 Treatment and coating of metals

This includes the:

• hot dipping (galvanising), electroplating and anodising of metals
• heat treatment of metals
• deburring, sandblasting, tumbling and cleaning of metals, when conducted in relation to a metallurgical process

This excludes:

• colouring, engraving of metals
• non-metallic coating of metals — plasticising, enamelling, lacquering, and so on
• hardening, buffing of metals
• activities of farriers
• printing onto metals
• metal coating of plastics
• ‘while-you-wait’ engraving services
• boring, turning, milling, eroding, planing, lapping, broaching, levelling, sawing, grinding, sharpening, polishing, welding, splicing, and so on, of metalwork pieces
• cutting of and writing on metals by means of laser beams

4. Qualifying energy uses

4.1 Handling

This includes the:

• receipt, quality control and storage of raw materials and other inputs
• handling of intermediary products
• packaging, warehousing and dispatch of finished products
• on site conveyance of delivered materials, intermediary products and finished products

4.2 Factory services

This includes:

• laboratory services
• quality control at all stages of manufacture
• control rooms
• engineering services
• heating and cooling systems
• compression systems
• air and water distribution systems
• waste treatment and abatement

4.3 On site facilities

This includes:

• administration
• staff facilities
• medical rooms
• security
• staff training
• design and development
• heating
• inside and outside lighting

5. Discontinued mixed use exemptions

The mixed use exemptions set out were discontinued from 1 April 2014 since they’re metallurgical processes and will therefore qualify for the new metallurgical exemption from that date.

On the Climate Change Levy: relief supporting analysis (PP10) form, the use of taxable commodities associated with these processes should be included in the mineralogical and metallurgical processes box rather than in the mixed uses box:

• coal, coke and natural gas as chemical reductants for ironmaking, for example, in blast furnaces
• coal, coke and natural gas as chemical reductants in the blast furnace production of zinc and other non-ferrous metals
• coal and coke in the recarburising of iron and steel
• coke breeze in a sinter plant to assist in the agglomeration of iron ore and its subsequent chemical reduction in blast furnaces
• coke injected into electric arc furnaces to control the chemistry of the steel and the steelmaking slag
• coke charged to electric arc furnaces to control the oxygen activity of the steel melt
• coke as a carburiser in iron casting
• anthracite as a reductant in the smelting of precious metals
• gas for vacuum reduction in metal powder production and to maintain carbon content in metal during the sintering process
• gas to maintain or increase the carbon content of metals during heat treatment
• natural gas as feedstock in a gas generator supplying a reducing atmosphere for the treatment or annealing of metal products
• commodities in reduction furnaces for the production of lead
• commodities to form reducing atmospheres, for example, in the refining and manipulation of molten copper to control oxygen levels
• commodities in ASARCO (American Smelting and Refining Company) shaft furnaces, the deoxidisation of copper swarf and the annealing of copper and copper alloys to provide a reducing atmosphere

Annex B — how to complete the table section of the PP10 form

These examples use only the reduced rates that apply up to and including 31 March 2019.

Example 1

A business has a total gas supply to a site of 100,000 units (row a in table).

The business is entitled to claim for 10,000 units under the Community Heating Scheme (row b).

The business is also claiming for 75,250 units under the reduced rate relief (row j).

The total claimable reduced rate relief is 65% of 75,250. Row k of the table will automatically calculate this as 48,912.5 units.

The total quantity of relief claimable is therefore:

10,000 (row b) + 48,912.5 (row k) = 58,912.5 units (row l – automatically calculated)

The total percentage of supplier eligible for relief is:

58,912.5 (row l) ÷ 100,000 (row a) × 100 = 58.91% (the form will automatically calculate this percentage (rounded off to 2 decimal points) and provide it on the print preview when completed) = 59% (the form will also automatically calculate this percentage (rounded off to a whole figure) and provide it on the print preview when completed).

This example is shown in the following table.

Taxable commodities on which relief is claimed

Taxable commodities

Enter the total quantity of the commodity supplied to the site and the quantities used for the relieved or exempt purposes.

Commodity	Letter	Quantity
Total quantity of commodity supplied to the site	a	100,000
Community heating scheme	b	10,000
Transport	c	—
Commodity producer	d	—
Not used for fuel (and mixed use)	e	—
Export or onward	f	—
Electricity producers for generating stations with a capacity greater than 2MWs	g	—
Supply for CHP Remember to give your CHPQA Scheme reference number below this table	h	—
Mineralogical and, or metallurgial processes	i	—
Reduced rate Remember to give your CCA unique facility number below this table	j	75,250
Total claimable for reduced rate	k	48,912.5
Total quantity of the relief claimable	l	58,912.5

Example 2

A business has a total electricity supply to a site of 120,985,053 units (row a in table).

The business is entitled to claim for 42,574,666 units under the mineralogical and, or metallurgical processes exemption (row i).

The business is also claiming for 64,410,387 units under the reduced rate relief (row j).

The total claimable reduced rate relief is 90% of 64,410,387 units.

Row k of the table will automatically calculate this as 57,969,348.3 units.

The total quantity of relief claimable is therefore:

42,574,666 (row i) + 57,969,348.3 (row k) = 100,544,014.3 units (row l – automatically calculated)

The total percentage of supplier eligible for relief is:

100,544,014.3 (row l) ÷ 120,985,053 (row a) × 100 = 83.1% (the form will automatically calculate this percentage (rounded off to 2 decimal points) and provide it on the print preview when completed) = 83% (the form will also automatically calculate this percentage (rounded off to a whole figure) and provide it on the print preview when completed).

Example 3

A business has a total gas supply to a site of 98,893,126 units (row a in table).

The business is entitled to claim for 47,530 units (QFI) under a supply intended to be used to generate outputs from a CHP (row h).

The business is also claiming for 93,835,966 units under the reduced rate relief (row j).

The total claimable reduced rate relief is 65% of 93,835,966 units. Row k of the table will automatically calculate this as 60,993,377.9 units.

The total quantity of relief claimable is therefore:

47,530 (row h) + 60,993,377.9 (row k) = 61,040,907.9 units (row l – automatically calculated)

The total percentage of supplier eligible for relief is:

61,040,907.9 (row l) ÷ 98,893,126 (row a) × 100 = 61.72% (the form will automatically calculate this percentage (rounded off to 2 decimal points) and provide it on the print preview when completed) = 62% (the form will also automatically calculate this percentage (rounded off to a whole figure) and provide it on the print preview when completed).

Example 4

A business has a total gas supply to a site of 160,530,000 units (row a in table).

The business is entitled to claim for 160,530,000 units under the electricity producers relief (row g) — they have a generating capacity above 2MWs, making direct supplies or self-supplies or indirect supplies of electricity through a utility.

The total percentage of supplier eligible for relief is:

160,530,000 (row l – automatically calculated ÷ 160,530,000 (row a) × 100 = 100% (the form will automatically calculate this percentage (rounded off to 2 decimal points) and provide it on the print preview when completed) = 100% (the form will also automatically calculate this percentage (rounded off to a whole figure) and provide it on the print preview when completed).