Environmental taxes, reliefs and schemes for businesses

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Climate Change Levy

Climate Change Levy (CCL) is paid at either the:

  • main rates
  • carbon price support (CPS) rates

Main rates

You pay CCL at the main rate on:

  • electricity
  • gas
  • 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:

  • industrial
  • commercial
  • agricultural
  • public services

You do not pay the main rate of CCL on certain supplies, for example 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 will not 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 - there’s more guidance on what schemes need to do to qualify
  • 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 will not 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 with the Environment Agency.

Energy intensive businesses can get the following reductions:

Energy intensive businesses can get a:

  • 92% reduction for electricity
  • 86% reduction for gas
  • 77% reduction for liquefied petroleum gas (LPG)
  • 86% reduction for coal and other solid fossil fuels

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:

  • gas
  • LPG
  • 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 do not have to pay CPS rates. These include small generators, stand-by generators and generating stations in Northern Ireland.

View a printable version of the whole guide

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