Environmental taxes, reliefs and schemes for businesses
2. Climate Change Levy
Climate Change Levy (CCL) is paid at either the:
- main rates
- carbon price support (CPS) rates
You pay CCL at the main rate on:
- solid fuels - like coal, lignite, coke and petroleum coke
The CCL main rates are listed on your business’s energy bill.
There’s more detailed information on Climate Change Levy rates and allowances.
Who it applies to
You pay the main rates of CCL if your business is in one of the following sectors:
- public services
You don’t pay the main rate of CCL on certain supplies, eg if you’re a:
- business that uses small amounts of energy
- domestic energy user
- charity engaged in non-commercial activities
Fuels that are exempt
Electricity, gas and solid fuel are normally exempt from the main rates of CCL if any of the following apply:
- they won’t be used in the UK
- they’re supplied to or from certain combined heat and power (CHP) schemes registered under the CHP quality assurance (CHPQA) programme
- the electricity was generated from renewable sources before 1 August 2015
- they’re used to produce electricity in a generating station which has a capacity of 2MW or greater
- they won’t be used as fuel
- they’re used in certain forms of transport
There are other exemptions and reliefs.
Pay a reduced rate
You can get a reduction on the main rates of CCL if you’re an energy intensive business and have entered into a climate change agreement (CCA) with the Environment Agency.
Energy intensive businesses can get a 90% reduction for electricity and a 65% reduction for gas, liquefied petroleum gas (LPG), coal and other solid fuel.
Check if your business is eligible. Your industry trade association can also give advice.
Carbon price support rates
The CPS rates of CCL encourage industry to use low carbon technology for producing electricity.
You pay CPS rates for:
- coal and other solid fossil fuels
Who pays CPS rates
The CPS rates of CCL are paid by owners of electricity generating stations and operators of combined heat and power (CHP) stations.
Certain suppliers don’t have to pay CPS rates. These include small generators, stand-by generators and generating stations in Northern Ireland.