The Climate Change Levy (CCL) is a government levy imposed on the energy used by businesses. The purpose of the levy is to encourage businesses to optimise their energy efficiency and in turn reduce their overall greenhouse emissions. CCL is only applicable to the commodity component of commercial energy bills.
CCL applies to customers whose daily consumption exceeds 33kWh of electricity or 145kWh of gas.
Eligible energy-intensive businesses can receive relief on their CCL by entering into a Climate Change Agreement (CCA) with the Environmental Agency. A CCA is a voluntary agreement which sets pre-determined energy efficiency targets to reduce energy use and C02 emissions. All businesses who hold a CCA will have their CCL reduced by a set amount published on the 1st of April each year. Non-commercial charities are exceptions to this rule as well as some manufacturers each of which may be eligible for 100% relief on the Tax.
From April 2019 CCL will increase to compensate for the abolishment of the CRC Energy Efficiency Scheme. Historically the rates have increased in line with RPI however as a result of the CRC absorption there will be an increase of 45% on electricity and 67% on gas.
CCL and CCA compliant reduced rates have been published until 2020 by Gov.uk.
| CCL Rates | Apr-17 | Apr-18 | Apr-19 | Apr-20 |
|---|---|---|---|---|
| Electricity | 0.568 p/KWh | 0.583 p/KWh | 0.847 p/KWh | 0.811 p/KWh |
| Natural gas | 0.198 p/KWh | 0.203 p/KWh | 0.339 p/KWh | 0.406 p/KWh |
| CCA Percentage discount | Apr-17 | Apr-18 | Apr-19 | Apr-20 |
|---|---|---|---|---|
| Electricity | 90% | 90% | 90% | 93% |
| Natural gas | 65% | 65% | 65% | 78% |
Businesses who do not participate in the CRC Energy Efficiency Scheme will feel the full effect of the tax increase from April 2019. Gas reliant customers will face the uplift again in April 2020 with a further 20% increase. We believe it is important to understand how the CCL tax increases will impact your energy costs. Contact our solutions team to find out how you will be affected.
Further information on CCL and CCA eligibility can be found below;
If you have any questions or comments on CCL or CCA’s please contact Toby from our solutions team at t.costanzo@brookgreensupply.com
