National statistics

Environmental Taxes Bulletin commentary (June 2023)

Updated 29 September 2023

1. Headlines

Total provisional Climate Change Levy (CCL) and Carbon Price Floor (CPF) receipts for the last complete financial year 2022 to 2023 were £2,093 million, which is £163 million (8%) higher than the previous financial year.

Total provisional Landfill Tax (LFT) receipts for the last complete financial year 2022 to 2023 were £626 million, which is £41 million (6%) lower than the previous financial year.

Total provisional Aggregates Levy (AGL) receipts for the last complete financial year 2022 to 2023 were £378 million, which is £32 million (8%) lower than the previous financial year.

2. About this release

This bulletin was created in June 2021 and will be updated annually every June. The content was previously published in three separate bulletins and was created following a consultation on the reduction and consolidation of HMRC statistics publications.

HMRC welcomes user engagement to improve the departments National and Official Statistics. You can contact statistics producers on GOV.UK or the team responsible for this bulletin directly at revenuemonitoring@hmrc.gov.uk.

This publication provides statistics for:

• CCL and CPF
• LFT
• AGL

The latest release has been updated with provisional receipts data up to May 2023 and provisional declarations data to April 2023.

Difficulties faced by taxpayers submitting returns during the coronavirus pandemic also means these statistics should be treated with additional caution in the financial year ending in 2021.

The ‘Environmental Taxes Bulletin’ is Crown Copyright. The information contained can be used as long as the source is made clear by the user.

3. Historical trends in environmental tax receipts over the past 10 years

Figure 1: Total environmental tax receipts for the previous 10 financial years, in £ million

Receipts for financial year ending 2023 are provisional.

Figure 1 demonstrates the following trends:

• CPF was introduced on the 1 April 2013, which added a new rate for fossil fuels used to generate electricity; consequently, there was a substantial increase in CCL and CPF receipts from the financial year ending in 2013; since the financial year ending in 2015, CCL and CPF have been the largest environmental tax

• LFT receipts have shown a decreasing trend from financial year ending 2014 until financial year ending 2022, whereby receipts increased compared to the previous year. In the financial year ending 2023 however, receipts decreased again when compared to the previous year. During this entire period, the standard rate of LFT charged has increased substantially yet receipts continue to decline.

• AGL receipts have been the smallest of the three environmental taxes over the past 10 financial years; receipts have broadly shown a gradual increase over this 10 year period, but decreased slightly in financial year ending 2023 compared to the previous year

Table 1: Financial year environmental tax receipts for the previous 10 complete financial years, £ million

Financial Year	CCL and CPF	LFT	AGL
2013 to 2014	1,068	1,189	285
2014 to 2015	1,491	1,144	342
2015 to 2016	1,763	919	356
2016 to 2017	1,864	874	374
2017 to 2018	1,861	757	376
2018 to 2019	1,922	683	367
2019 to 2020	2,004	641	397
2020 to 2021	1,778	566	359
2021 to 2022	1,930	667	410
2022 to 2023	2,093	626	378

4. Climate Change Levy and Carbon Price Floor receipts and declarations

CCL is chargeable on the industrial and commercial supply of taxable commodities for lighting, heating and power by consumers in the following sectors:

• industry
• commerce
• agriculture
• public administration
• other services

CCL does not apply to taxable commodities used by domestic consumers or charities for non-business use.

CCL is charged on taxable supplies. Taxable supplies are certain supplies of the following taxable commodities:

• electricity
• natural gas as supplied by a gas utility
• petroleum and hydrocarbon gas in a liquid state
• coal and lignite
• coke and semi coke of coal or lignite
• petroleum coke

CPF is a tax on fossil fuels used in the generation of electricity. It was achieved through changes to the existing CCL regime for gas, solid fuels and liquefied petroleum gas (LPG) used for electricity generation. These changes included the introduction of new carbon price support (CPS) rates of CCL.

This publication provides Official Statistics for CCL and CPF receipts and declarations by fuel type:

• electricity
• gas
• solid and other fuels, including liquefied petroleum gas (LPG)

It is not possible to provide accurate separate receipts statistics for CCL and CPF because taxpayers pay receipts for both as one payment. An estimate of separate receipts statistics for CCL and CPF is provided using taxpayer returns data and should be treated with caution.

CCL and CPF taxpayers mainly follow quarterly accounting periods. Tax returns are due by the end of the month following the accounting period. Payment of tax is also generally due to HMRC by the same time, but taxpayers who pay by direct debit are given a 7 day extension.

These accounting periods and payment patterns cause a 1 to 2 month lag between accounting periods ending and receipts being received by HMRC.

Figure 2: Total CCL and CPF receipts by financial year, in £ million

Receipts for financial year ending 2023 are provisional.

Figure 2 demonstrates the following trends for total CCL and CPF receipts:

• CCL and CPF receipts have fallen in financial year ending 2021, potentially due to impacts from the government’s response to the Coronavirus (COVID-19) pandemic, as national lockdown policies most likely reduced the demand for energy amongst commodities covered by CCL and CPF. For the financial year ending 2023 however, CCL and CPF receipts have returned to above the pre-pandemic baseline of the financial year ending 2020

• For the financial year ending 2023 CCL and CPF receipts have reached their highest level at £2,092 million, with the previous peak being in financial year ending 2020 at £2,004 million

Figure 3: Total CCL and CPF declarations split by electricity, gas, and solid and other fuels by financial year

Declaration figures for financial year ending 2023 are provisional.

Figure 3 demonstrates the following trends for total CCL and CPF declarations:

• CCL and CPF declarations increased substantially between financial years ending 2013 and 2017, mainly driven by increasing gas declarations between these years; since financial year ending 2017, CCL and CPF declarations have remained quite stable

• electricity declarations have generally increased since financial year ending 2015, with the highest level being in financial year ending 2020

• gas receipts increased substantially each year from years ending 2013 to 2017; thereafter receipts have generally stabilised

• declarations for solid and other fuels have followed a consistent downward trend since financial year ending 2014, likely reflecting declining quantities of coal used for electricity production in the UK. In years ending 2021 to 2023 however, there has been a small rise in the use of solid and other fuels

5. Landfill Tax receipts and declarations

LFT is a tax paid by landfill operators on the disposal of material at a landfill site. The tax is passed onto businesses and local authorities through the gate fee for disposing of waste at a landfill.

The tax aims to provide incentive for the diversion of waste from landfill to other less harmful methods of waste management such as recycling and incineration.

The tax is charged by weight. There are two rates; standard rate and lower rate.

• lower rate applies to non-hazardous and less polluting materials

• standard rate applies to all other taxable materials including all disposals at an unauthorised site

With effect from 1 April 2023, the following rates apply:

• lower rate: £3.25 per tonne
• standard rate: £102.10 per tonne

Exemptions exist for dredging, mining and quarrying waste, pet cemeteries, filling of quarries and waste from visiting forces.

Figure 4: Total LFT receipts by financial year

Receipts for financial year ending 2023 are provisional.

Figure 4 demonstrates the following trends to LFT receipts:

• LFT receipts have fallen substantially in the last 10 financial years, in financial year ending 2014 they stood at £1,189 million, by the most recent financial year ending 2023, they had fallen to £626 million; the financial year ending 2021 was impacted by the Coronavirus (COVID-19) pandemic; after a rise in receipts the following year, receipts for financial year ending 2023 are continuing the downward trend

• LFT rates have increased year on year over the past 10 years; standard rate charged has increased from £72.00 per tonne in April 2013 to £102.10 per tonne in April 2023, while LFT receipts have fallen during this period

• a ‘shortfall’ in LFT receipts should not necessarily be considered as a concern because the tax aims to provide incentive for the diversion of waste from landfill to other less harmful methods of waste management such as recycling and incineration, this turn away from standard rated waste can be seen below in the declarations data

Figure 5: Total LFT tonnage declared split by taxable tonnage, taxable tonnage of which relieved and exempt tonnage by financial year

Tonnage figures for financial year ending 2023 are provisional.

Figure 5 demonstrates the following trends for LFT tonnage:

• total tonnage has shown a downwards trend over the last 10 years, the financial year ending 2021 was impacted by the Coronavirus (COVID-19) pandemic; after a rise in receipts the following year, receipts for financial year ending 2023 are again continuing the downward trend

• receipts for standard rate tonnage have shown a downwards trend over the last 10 years with an increase in financial year ending 2022, following a year that was impacted by COVID, but with the financial year ending 2023 decreasing from the previous year

• standard rate tonnage as a proportion of total tonnage has fallen from 48% in financial year ending 2014 to 29% in financial year ending 2023.

• lower rate tonnage has broadly shown a downwards trend over the last 10 years with the lowest level over this period in financial year ending 2023

• lower rate tonnage as a proportion of total tonnage increased from 31% in financial year ending 2019 to 43% in financial year ending 2021 (with some fluctuation over this period), with this proportion then falling to 37% in financial year ending 2023

• exempt tonnage does not display any clear trends over this period with levels in financial year ending 2023 being broadly similar to those in financial year ending 2014, with some fluctuation over this period. Exempt tonnage as a proportion of total tonnage however, has shown an upward trend over this period; rising from 21% in financial year ending 2014 to 34% in financial year ending 2023

• LFT tonnage declared for financial year ending 2023 is 22,354 thousand tonnes which is 421 thousand tonnes (2%) lower than the previous financial year

6. Aggregates Levy receipts and declarations

This publication provides Official Statistics on AGL receipts and declarations.

AGL covers digging, dredging or importing aggregate commercially in the UK.

The current rate is £2 per tonne (increasing to £2.03 per tonne from 1 April 2024)

Traders become liable for the levy when an aggregate is:

• used for construction purposes
• mixed with anything other than water (excluding special circumstances)
• removed from:
  • its originating site
  • a connected site which is registered under the same name as the originating site
  • a site where it had been intended to apply an exempt process to it, but this process was not applied

Total AGL tonnage declared is calculated by summing taxable and exempt tonnage declared (relieved tonnage is excluded from the calculation in order to avoid double counting as it’s contained within taxable tonnage). As taxable tonnage forms the majority of the total tonnage declared, the pattern of total tonnage is dominated by patterns in taxable tonnage.

Figure 6: Total AGL receipts by financial year

Receipts for financial year ending 2023 are provisional.

Figure 6 demonstrates the following trends for AGL receipts:

• AGL receipts have broadly shown an increasing trend over the last 10 financial years, with some fluctuation, from £285 million in the financial year ending in 2014 to £378 million (provisional) in the financial year ending 2023, with some fluctuation over this period

• financial year ending 2021 would have been impacted by the Coronavirus (COVID-19) pandemic

• The Aggregates levy rate has remained constant over this period at £2 per tonne

Figure 7: Total AGL tonnage declared split by taxable tonnage, taxable tonnage of which relieved and exempt tonnage by financial year

Tonnage declarations for financial year ending 2023 are provisional.

Figure 7 demonstrates the following trends for AGL tonnage declarations:

• total AGL tonnage demonstrates an upward trend from 206 million tonnes in financial year ending 2014 to 251 million tonnes in financial year ending 2020; total AGL tonnage has reduced since with provisional tonnage for financial year ending 2023 being at 231 million tonnes

• the proportion of taxable tonnage to total tonnage has generally been stable over this period, fluctuating between 92% and 93% from financial year ending 2015 to financial year ending 2022. In the financial year ending 2023 however, this proportion decreased to 89%; indicating a shift from taxable tonnage to exempt tonnage

• Total AGL tonnage declared for the financial year ending 2023 is 230,603 thousand tonnes, which is 13,991 thousand tonnes (6%) lower than the previous financial year