CCL - Climate Change Levy, CEB Consultants explanation of the governments energy tax

Climate Change Levy (CCL)

The Climate Change Levy is a UK government tax applied to business energy use. It’s designed to encourage businesses to become more energy efficient and reduce carbon emissions.

Who pays the CCL?

Most businesses, charities, and public sector organisations pay CCL on their gas and electricity bills - unless they qualify for exemptions (see below). It does not apply to domestic or very small business energy users.

How is the CCL charged?

CCL is added to your energy bill as a separate line item, charged per kilowatt-hour (kWh) of gas or electricity used. The rate is set by HMRC and reviewed annually.

As of April 2025 (example rates):

  • Electricity: 0.775p per kWh

  • Gas: 0.672p per kWh

Can my business be exempt or pay less?

Yes, you may qualify for a reduced CCL rate (up to 90% off) if:

  • You’re in an energy-intensive industry and have a Climate Change Agreement (CCA) with the Environment Agency

  • You use energy entirely for residential or charitable non-business purposes

  • You generate a portion of your energy from renewable sources (with a valid exemption certificate)

Why is this important for businesses?

Understanding CCL helps businesses:

  • Spot opportunities to reduce energy taxes through efficiency or agreements

  • Accurately compare quotes when switching suppliers

  • Avoid overpaying by ensuring the correct exemptions are applied