CCA Climate Change Levy Discount Calculator
Businesses in energy-intensive sectors that hold a Climate Change Agreement with the Environment Agency receive significant discounts on Climate Change Levy rates. CCAs require commitment to energy efficiency targets.
Frequently Asked Questions
What is a Climate Change Agreement (CCA)?
A Climate Change Agreement is a voluntary agreement between an energy-intensive industry sector and the Environment Agency. In exchange for meeting energy efficiency or carbon reduction targets, businesses receive a significant discount on Climate Change Levy rates.
What discount does a CCA provide?
For 2025/26, CCAs provide: 92% discount on electricity CCL; 89% discount on gas (natural gas) CCL; 89% discount on LPG CCL. Businesses pay only 8% of the full electricity rate and 11% of the full gas rate.
What sectors can enter Climate Change Agreements?
Over 50 sectors have CCA umbrella agreements, including: ceramics, chemicals, metals, food and drink, glass, paper, textiles, rubber, and many others. Businesses must join through their sector association's umbrella agreement.
How are CCA targets assessed?
CCA targets are assessed in 2-year cycles. Businesses must report energy use and demonstrate meeting agreed energy intensity or absolute energy/carbon targets. Failing targets results in losing the CCL discount for the next cycle.
What is Climate Change Levy?
CCL is a tax on energy used by businesses and the public sector. It applies to electricity, gas, LPG, and coal. Domestic consumers, charities in non-business use, and energy used for certain transport are exempt. CCL was introduced in 2001.
Are there any full CCL exemptions?
Yes. Electricity from qualifying renewable sources (with Levy Exemption Certificates — now discontinued for most), electricity used to produce electricity, energy used in certain agricultural/horticultural production, and combined heat and power (CHP) stations meeting efficiency criteria may qualify for reduced or nil CCL.
Does CCL apply to domestic energy?
No. CCL applies to business energy use only. Domestic consumers do not pay CCL. This distinguishes UK business energy bills from domestic bills — business bills explicitly show the CCL line item.
What is the difference between CCA and UK ETS?
CCA gives CCL discounts in exchange for meeting efficiency targets. UK ETS requires surrendering carbon allowances for emissions. Businesses can participate in both — CCA reduces CCL cost, UK ETS manages carbon emissions. Some sectors are in both schemes.
How does CCA interact with Energy Saving Opportunity Scheme (ESOS)?
ESOS (large business energy audits every 4 years) is separate from CCA. CCA-participating businesses may use their CCA monitoring to partially satisfy ESOS requirements, reducing administrative burden.
What happens if a CCA business fails its targets?
If a business fails its CCA targets for a 2-year period, it loses the CCL discount for the next 2-year cycle. It must pay full CCL rates. It can re-enter the CCA in a subsequent cycle if it demonstrates compliance.
Can I apply for a CCA as an individual business?
Businesses must join a CCA through their sector's umbrella agreement, managed by the sector trade association. Direct applications to individual businesses are not available. Contact your relevant trade association to explore joining.
Is CCL deductible for Corporation Tax?
Yes. CCL is a business expense and is fully deductible against Corporation Tax profits. The net economic cost of CCL is therefore reduced by the CT rate (19–25%). CCA savings reduce the gross CCL cost before the CT deduction.