What are the CCL rates for electricity in 2025/26?

The CCL rate for electricity in 2025/26 is £0.00775 per kilowatt hour (kWh). This applies to electricity supplied to non-domestic premises. Businesses in a Climate Change Agreement (CCA) receive a 92% discount, paying only 8% of the main rate.

What are the CCL rates for natural gas in 2025/26?

The CCL rate for natural gas in 2025/26 is £0.00672 per kWh. This applies to gas supplied to non-domestic premises. Businesses in a Climate Change Agreement receive an 89% discount, paying only 11% of the main rate.

What are the CCL rates for LPG and solid fuels in 2025/26?

CCL rates for 2025/26: LPG (liquefied petroleum gas) £0.02175 per kg; coal and other solid fuels £0.03174 per kg. These rates apply to non-domestic use. Domestic (household) supplies are exempt from CCL regardless of volume.

Who pays the Climate Change Levy?

CCL is paid by non-domestic energy users — businesses, public sector organisations, charities (in some cases), and other non-household consumers. CCL is charged by the energy supplier, who collects it and pays it to HMRC. Domestic households are completely exempt from CCL.

How much can businesses save with a Climate Change Agreement?

The CCL discount for CCA participants is substantial. A business consuming 500,000 kWh of electricity annually saves approximately £3,565 in CCL per year (92% of the full £3,875 CCL liability). For high-energy industries, the saving can run into tens of thousands of pounds per year.

Which industries can enter a Climate Change Agreement?

Climate Change Agreements are available to energy-intensive sectors including: aluminium, cement, ceramics, chemicals, food and drink, foundries, glass, paper, steel, textiles, and others. Eligibility is determined by the sector's energy intensity. Check with the relevant sector body or the Environment Agency.

What energy sources are exempt from CCL?

CCL exemptions include: energy from renewable sources (electricity generated by renewables and backed by a Renewable Energy Guarantee of Origin certificate); energy used for combined heat and power (CHP) schemes meeting qualifying criteria; domestic supplies; and energy used in certain transport and international shipping sectors.

How is CCL shown on an energy bill?

CCL appears as a separate line item on business energy invoices, usually labelled 'Climate Change Levy' or 'CCL'. It is calculated by multiplying your consumption by the applicable CCL rate per unit. VAT is charged on top of the total including CCL at 20% (or 5% for some energy supplies).

Does CCL apply to electricity from renewable sources?

Electricity generated from qualifying renewable sources is exempt from CCL if it is backed by a Levy Exemption Certificate (LEC) or Renewable Energy Guarantee of Origin (REGO) certificate. Businesses buying 100% renewable-backed tariffs may claim CCL exemption on that electricity.

How does the CCA electricity discount of 92% work?

If you are in a Climate Change Agreement, you pay only 8% of the full CCL electricity rate. For 2025/26, the full rate is £0.00775/kWh. With the 92% CCA discount, you pay 8% × £0.00775 = £0.00062 per kWh. This reduces CCL from £7,750 to £620 per million kWh — a saving of £7,130 per million kWh.

Can a sole trader claim CCA CCL relief?

CCA schemes are typically sector-level agreements for qualifying energy-intensive industries. A sole trader operating in a qualifying sector may participate via their trade association's umbrella agreement. Sole traders in non-eligible sectors cannot access CCA discounts.

What is the CCL rate per tonne of CO2 equivalent?

CCL rates are set per unit of fuel (kWh or kg), not directly per tonne of CO2e. However, the rates broadly track the carbon content of each fuel. Gas emits approximately 0.184 kg CO2e per kWh; coal emits approximately 0.341 kg CO2e per kWh, reflecting why coal CCL rates are higher per kg.

How do I claim a CCL exemption for renewable energy?

To claim CCL exemption for renewable electricity, you must hold valid Levy Exemption Certificates (LECs) or REGO certificates matching the electricity consumed. Provide these to your energy supplier, who will then apply the CCL exemption on your invoices.

What is the CCL for a small office using 50,000 kWh of electricity per year?

At the 2025/26 rate of £0.00775/kWh: CCL = 50,000 × £0.00775 = £387.50 per year. This is the CCL portion before VAT. With a CCA 92% discount, the CCL would be 50,000 × £0.00775 × 0.08 = £31 per year.

How has the CCL rate changed over time?

CCL rates have generally increased with inflation since introduction in 2001. Historically, gas CCL rates were higher than electricity rates, but the government equalised electricity and gas rates in 2019 (electricity CCL increased significantly as gas was effectively reduced in relative terms). Rates are reviewed at each Budget.

What is the CCL rate for coal in 2025/26?

The CCL rate for coal and other solid fuels in 2025/26 is £0.03174 per kg. This is the highest CCL rate per unit weight, reflecting coal's high carbon intensity. Businesses burning coal for process heat or power generation pay CCL at this rate on each kilogram consumed.

Are schools and hospitals exempt from CCL?

Schools and hospitals are non-domestic premises and are generally subject to CCL. However, charities may qualify for CCL relief if at least 60% of their energy is used for non-business purposes. Schools and NHS hospitals in England typically pay CCL on their energy bills unless they hold specific exemptions.

How do I calculate monthly CCL from annual figures?

Divide your annual CCL by 12 to estimate your average monthly CCL. However, energy consumption often varies seasonally — higher gas consumption in winter, for example. The calculator above shows both annual and monthly CCL totals.

What is the CCL on LPG for a business using 500 kg per year?

At the 2025/26 LPG rate of £0.02175/kg: CCL = 500 × £0.02175 = £10.88 per year. LPG is typically used as a heating fuel where mains gas is unavailable. CCL applies to LPG used in non-domestic premises at this rate.

Can I reclaim CCL paid in error?

If your energy supplier incorrectly charged CCL when you are exempt (e.g., you hold valid exemption certificates), you can request a credit note from your supplier. Suppliers can reclaim overpaid CCL from HMRC, passing the credit back to you. Keep all exemption certificates current to avoid over-charging.

Does CCL apply to energy used in manufacturing?

Yes. Energy used in manufacturing processes is subject to CCL unless an exemption applies (such as CCA participation, renewable source qualification, or specific sector exemptions). CCL was specifically designed to encourage energy efficiency in industry and manufacturing.

What is the CCL saving for a CCA business using 1 million kWh of gas annually?

Full gas CCL at £0.00672/kWh on 1,000,000 kWh = £6,720. With 89% CCA discount, you pay 11% = £739. Annual saving = £5,981. For large gas users, CCA participation can deliver substantial cost reductions that often justify the administrative effort of maintaining the agreement.

CCL functions as a carbon tax on business energy use, but it is not strictly a pure carbon tax. It applies per unit of energy (kWh or kg) rather than per tonne of CO2 emitted. The rates broadly reflect carbon content, but exemptions (especially for renewables) demonstrate its environmental intent.

What documentation do I need to claim CCL relief?

To claim CCL relief or exemption, you need: a valid CCA unit agreement (for CCA discount), REGO certificates (for renewable electricity exemption), or declaration form PP11 (for combined heat and power schemes). Submit these to your energy supplier before the billing period to avoid paying CCL upfront and claiming back later.

How does CCL interact with the UK Emissions Trading Scheme?

CCL and the UK ETS are separate policies. The UK ETS covers CO2 from combustion at large industrial and power generation sites. CCL applies to energy supplied to all non-domestic premises. Facilities covered by UK ETS may still pay CCL on energy they consume (separate from their ETS obligations for emissions from combustion).

What is the total CCL for a medium-sized factory using electricity and gas?

Example: a factory using 800,000 kWh electricity and 1,200,000 kWh gas annually without CCA. Electricity CCL = 800,000 × £0.00775 = £6,200. Gas CCL = 1,200,000 × £0.00672 = £8,064. Total annual CCL = £14,264. With CCA: electricity CCL = £496, gas CCL = £887 — total £1,383 (saving £12,881/year).

What is the CCL on electricity for a retail shop using 30,000 kWh per year?

At the 2025/26 rate of £0.00775/kWh: CCL = 30,000 × £0.00775 = £232.50 per year. Monthly CCL = £19.38. Retail shops typically do not qualify for CCA relief, as the scheme is focused on energy-intensive manufacturing sectors.

Does CCL apply to energy used in transportation?

CCL does not apply to road fuel (covered by Fuel Duty) or aviation fuel. It applies to energy (electricity, gas, coal, LPG) used in stationary premises and industrial processes. Electric vehicle charging at business premises is subject to CCL on the electricity consumed.

Are there CCL exemptions for combined heat and power (CHP)?

Yes. Electricity and heat generated by qualifying Combined Heat and Power (CHP) schemes is exempt from CCL. To qualify, the CHP must meet efficiency standards set by HMRC and hold Good Quality CHP (GQCHP) certification. Apply using form PP11 or PP10 as appropriate.

What is the CCL for a pub using 60,000 kWh electricity and 80,000 kWh gas?

Electricity CCL: 60,000 × £0.00775 = £465. Gas CCL: 80,000 × £0.00672 = £537.60. Total annual CCL: £1,002.60. Monthly CCL: £83.55. Hospitality businesses (pubs, restaurants, hotels) typically cannot access CCA relief as they are not classified as energy-intensive manufacturing sectors.

How are CCL rates set?

CCL rates are set by HM Treasury and announced at the UK Budget each year. They are typically increased with inflation and reviewed periodically to maintain the policy's environmental incentive. The rates are published in HMRC's CCL technical guidance and apply from 1 April each tax year.

Can charitable organisations claim CCL relief?

Charities may claim relief from CCL on energy used for non-business (charitable) activities if at least 60% of consumption at a supply point is for non-business use. They must complete a self-declaration form (PP11) and provide it to their energy supplier.

What is the impact of CCL on UK energy competitiveness?

CCL adds to business energy costs, increasing the cost of operating energy-intensive industries in the UK versus international competitors. The CCA scheme partially mitigates this for qualifying sectors. The government regularly reviews CCL policy to balance environmental objectives against industrial competitiveness.

What is the total cost of CCL on UK businesses each year?

HMRC collects approximately £2 billion in CCL revenue annually from UK businesses. This represents a significant component of business energy costs, particularly for manufacturers, data centres, and commercial landlords with large property portfolios.

Does CCL apply to heat from a district heating scheme?

Heat supplied via a district heating network to non-domestic premises may be subject to CCL depending on the fuel source and scheme design. Heat generated from qualifying CHP or renewable sources may be exempt. Check with the heat network operator about CCL applicability.

What is the CCL on 100 tonnes of coal used industrially?

At the 2025/26 rate of £0.03174/kg: 100 tonnes = 100,000 kg. CCL = 100,000 × £0.03174 = £3,174. For industrial processes still using solid fuels, CCL represents a meaningful addition to fuel costs and adds further incentive to switch to lower-carbon alternatives.

How does CCL affect data centre costs?

Data centres are major electricity consumers and pay full CCL on their electricity unless they use renewable energy backed by REGOs or qualify for other exemptions. A large data centre consuming 50 million kWh annually would pay approximately £387,500 in CCL — a significant operating cost incentivising renewable energy procurement.

What is the interaction between CCL and the Carbon Price Support?

The Carbon Price Support (CPS) is a top-up to the UK ETS carbon price paid by electricity generators. It affects the wholesale cost of electricity. CCL is a separate levy on energy end-users. Both policies add to the cost of carbon-intensive energy but operate at different points in the energy supply chain.

What happens if my energy supplier incorrectly adds CCL to a domestic supply?

Domestic supplies are entirely exempt from CCL. If your supplier incorrectly charges CCL on a domestic meter, raise a formal complaint with the supplier. They must issue a credit. If unresolved, contact the Energy Ombudsman. Keep your meter register (domestic or non-domestic) classification documentation.

Does CCL apply to onsite renewable generation consumed on the premises?

Electricity generated by an onsite renewable installation (such as solar panels) and consumed directly by the business is exempt from CCL. CCL applies to metered supplies from the grid. Onsite generation consumed directly bypasses the supply chain entirely and is not subject to CCL.

How is CCL different from the Renewable Obligation?

The Renewable Obligation (RO) was a support scheme for renewable electricity generation paid for through supplier levies, increasing electricity bills. CCL is a tax on energy consumption. Both affected business energy costs but through different mechanisms. The RO has been replaced by Contracts for Difference (CfD) for new renewable projects.

Can a landlord or property owner claim back CCL paid by tenants?

CCL is charged on the energy consumer. If a landlord pays energy bills and recharges tenants, the CCL element should be transparently passed through. If the supply is to a commercial tenant's own meter, the tenant pays CCL directly via their energy supplier. The key is who is the registered customer for the energy supply.

What is the CCL for a hotel using 200,000 kWh electricity and 300,000 kWh gas?

Electricity CCL: 200,000 × £0.00775 = £1,550. Gas CCL: 300,000 × £0.00672 = £2,016. Total annual CCL: £3,566. Monthly CCL: £297. Hotels cannot access CCA relief but can reduce CCL by purchasing renewable-backed electricity tariffs (REGOs).

What future changes are planned for CCL?

CCL rates are reviewed at each Budget. The government has committed to maintaining CCL as part of its energy and environmental tax framework. Future changes may include rate adjustments, expansion of exemptions for low-carbon technologies, or reform of the CCA discount structure. Monitor Budget announcements for updates.

Climate Change Levy Calculator 2025/26

CCL Calculator — 2025/26 Rates

Annual electricity consumption (kWh)

Annual natural gas consumption (kWh)

Annual LPG consumption (kg)

Annual coal / solid fuels consumption (kg)

In a Climate Change Agreement (CCA)? — 92% electricity discount, 89% gas discount

Domestic premises? (if yes: fully exempt from CCL)

2025/26 CCL Main Rates

Fuel type	Main rate	CCA reduced rate	Unit
Electricity	£0.00775	£0.00062 (8% of main)	per kWh
Natural gas	£0.00672	£0.00074 (11% of main)	per kWh
LPG	£0.02175	—	per kg
Coal / solid fuels	£0.03174	—	per kg

What Is the Climate Change Levy?

The Climate Change Levy (CCL) is a UK government environmental tax on energy supplied to non-domestic (business and public sector) users. It was introduced in April 2001 to encourage businesses to improve energy efficiency and reduce carbon emissions. CCL applies to electricity, natural gas, LPG, and solid fuels such as coal used in non-domestic premises.

CCL does not apply to domestic households. It is charged by energy suppliers directly on business energy bills and shown as a separate line item. Businesses pay CCL in addition to their unit energy cost. Your energy supplier remits CCL to HMRC quarterly.

Domestic premises are fully exempt from CCL. Businesses in an approved Climate Change Agreement receive 92% off electricity CCL and 89% off gas CCL. Renewable electricity backed by REGO certificates is also exempt from CCL.

Climate Change Agreements (CCA)

A Climate Change Agreement is a voluntary deal between an energy-intensive business sector and the Environment Agency. Participating businesses agree to meet energy efficiency improvement targets in exchange for large CCL discounts. The CCA discount is 92% on electricity and 89% on natural gas.

CCA participation is available to qualifying energy-intensive manufacturing sectors: steel, chemicals, cement, ceramics, glass, food and drink, paper, textiles, and others. If you are in a qualifying sector, contact your trade association about joining the relevant CCA umbrella scheme.

Renewable Energy and CCL Exemption

Electricity generated from qualifying renewable sources and backed by a Renewable Energy Guarantee of Origin (REGO) certificate is exempt from CCL. Businesses can purchase 100% renewable electricity tariffs from suppliers who hold REGO certificates, effectively eliminating CCL on their electricity. This is a key financial motivation for green energy procurement beyond its environmental benefit.

Frequently Asked Questions

The Climate Change Levy (CCL) is a UK environmental tax charged on non-domestic (business and public sector) energy use. It applies to electricity, natural gas, LPG, and solid fuels such as coal. It was introduced in April 2001 to incentivise businesses to reduce energy consumption and carbon emissions.

The CCL rate for electricity in 2025/26 is £0.00775 per kWh. Businesses in a Climate Change Agreement (CCA) receive a 92% discount, paying only 8% of the main rate — effectively £0.00062 per kWh.

The CCL rate for natural gas in 2025/26 is £0.00672 per kWh. Businesses in a Climate Change Agreement receive an 89% discount, paying only 11% of the main rate — approximately £0.00074 per kWh.

Yes. Energy supplied to domestic premises (homes) is completely exempt from CCL regardless of the amount consumed. CCL applies only to energy consumed in business, industrial, commercial, and public sector premises.

A Climate Change Agreement is a voluntary agreement between an energy-intensive business sector and the Environment Agency. Under a CCA, businesses commit to improving energy efficiency targets. In return, they receive significant discounts on CCL — 92% off electricity CCL and 89% off gas CCL.

Electricity generated from qualifying renewable sources is exempt from CCL if it is backed by a Renewable Energy Guarantee of Origin (REGO) certificate. Businesses buying 100% renewable-backed tariffs may claim CCL exemption on that electricity.

Yes. Your energy supplier adds CCL to your business energy bill and shows it as a separate line item. If you are CCA-exempt or meet another exemption condition, you must provide a valid CCL exemption certificate to your supplier for them to remove or reduce the CCL charge.

Yes. CCL paid as part of business energy costs is a deductible expense against business profits for corporation tax or income tax purposes. The CCL forms part of the energy cost and reduces taxable profit in the normal way.

Yes. VAT is charged on the full energy bill including the CCL component. Business energy is usually charged at the standard 20% VAT rate, though some supplies qualify for the reduced 5% rate. The CCL is part of the taxable supply for VAT purposes.

CCL exemptions include: energy from renewable sources backed by REGO certificates; energy used for qualifying combined heat and power (CHP) schemes; domestic supplies; and energy used in certain transport and international shipping sectors.

Key strategies: join a Climate Change Agreement if in an eligible energy-intensive sector (92% electricity and 89% gas discount); switch to renewable electricity contracts backed by REGOs (exempt from CCL); invest in onsite solar generation; improve energy efficiency to reduce consumption overall.

Energy-intensive sectors most affected include: manufacturing (steel, chemicals, cement, ceramics, glass), data centres, commercial real estate, retail, hospitality, and food processing. These sectors also benefit most from Climate Change Agreement discounts.