The Climate Change Levy Explained

There are two rates for the Climate Change Levy: the main rate and the Carbon Price Support rate.

Main rate

Any business that works in the commercial, industrial, agricultural, and public service sectors will be charged at the main rate for business gas, electricity, and solid fuel and these will be listed on your energy bills.

The table below illustrates the main Climate Change Levy rates:

Carbon Price Support rate

If your business operates combined heat and power stations, then you will need to pay the Carbon Price Support rate, which is designed to reduce carbon emissions produced by businesses. Your business will become liable for the Carbon Price Support rate when gas passes through the meter at the generating station and LPG, coal or other solid fossil fuels are delivered through the entrance gate to the generating station.

The table below illustrates these rates:

Businesses that generate their own energy, such as through solar panels, are unlikely to pay the levy since they will be classed as a small generator.

Business energy suppliers oversee adding the Climate Change Levy to your commodities. On your energy bill, the levy charge will feature as a separate line. Once the business energy suppliers have collected the money from their customers, the suppliers will pay it to HM Revenue and Customs.

All businesses must register for the Climate Change Levy unless they are exempt. If you do not register or you the levy, then you will be charged a penalty of £250 each time.

So, who is exempt from Climate Change Levy? If you meet the following requirements, then your business may be exempt from the levy charge:

• You are a charity involved with non-commercial activities
• Your company uses only a small amount of energy, generally around less than 145kWh of gas and 33kWh of electricity a day.
• You are a domestic energy user, such as homes, caravans, self-catering accommodation, and schools.

Do you want to pay less for your Climate Change Levy charges? The most effective way to start saving on your main rate is by signing the Climate Change Agreement (CCA).

With a CCA, you’ll get a discount of up to 90% on your CCL rates on electricity and a 65% discount on all other fuels. However, you must make improvements to your business to reduce your average energy consumption.

When you sign the CCA, you agree to measure and report on your business energy use and carbon emissions against specific targets over a certain period. After this period has passed and your business has achieved those targets, you will receive the discount.

Want to find out whether your business is eligible for a CCA? .

If you think your organisation has paid too much on your CCL, it’s possible to reclaim it as a tax credit.

Struggling to find ways of making your business more energy efficient? We’ve listed our three small changes your business can make to reduce energy consumption and, in the process, its carbon footprint.

1. Adjust the thermostat

Changing the temperature of the office can be a difficult decision. Someone will always be too warm or too cold. However, reducing the temperature by one degree can make a huge difference to your energy bills. 20 degrees is best for offices and around 16 degrees is best for warehouses.

Work with your employees too. Move those who run warm to desks nearer the windows and doors and for those who are cold, maybe introduce office blankets or hot water bottles.

2. Switch energy providers

Everyone knows that you can lower your energy bills by switching to a different provider, however did you know that you can become more energy efficient by switching to green providers?

By switching to renewable energy, you can add green credentials to your company and increase your corporate social responsibility. Plus, you’ll be helping the environment and encouraging the development of greener sources of energy.

3. Switch off standby

We’re all guilty of leaving appliances on stand-by, whether that’s at work or at home. But by switching off computers, monitors, and kitchen appliances, you can make a significant saving on your energy bills.

The Climate Change Levy was designed to encourage businesses, like yours, to reduce their carbon emissions and become more energy efficient. Want to learn more about how you can make your business more energy efficient? Explore our Business Energy Efficiency Guide .

If you need more help with reducing your energy wastage and saving money, then why not get in touch? Our friendly experts will help you find the best deals on your business energy and offer tips on how to reduce your carbon footprint.