Understanding business electricity rate system isn’t that easy. There are several things included. For instance, a business bill will have a Climate Change Leve. So, do you know the purpose of Climate Change Leve? How can it help you save energy?  How does it work? What’s the importance of this levy? This Climate Change Levy Explained guide is all you need to know regarding this program.

What’s CCL?

The CCL refers to an additional tax charged on energy bills. It’s designed to encourage companies to reduce their greenhouse gas emissions. Any business that utilizes gas and electricity must pay the Climate Change Levy.

How Much?

The CCL is imposed whenever an energy provider supplies your company with electricity, coal, gas, or LPG. It’s commonly charged per Kilowatt of energy supplied on gas, as well as, electricity bills. Business energy providers often collect the CCL levy from their clients and pay the government.

What’s CCL Exemption?

If your company pays the reduced VAT rate, then you could be exempted from paying the Climate Change Levy. To qualify for the CCL levy, your business must be a non-profitable organization, use less than thirty-three Kilowatts of electricity per day, and be located where most of the gas and energy is utilized for domestic purposes.

How To Get CCL Exemption

As a small start-up business, you can apply to pay the Climate Change Levy at a reduced rate. Plus, you can request your energy supplier to completely remove the CCL tax from your energy bills. But before doing that, you’ll first need to apply for a reduction in your VAT rate.

How Can You Get Lower CCL Rates?

If you hold a climate change agreement, you might receive a ninety percent reduction on your CCL rates. Ideally, climate change agreements are signed between large industries and the Environmental Agency. Once you enter into this agreement, you’ll be required to reduce your energy use, as well as, carbon dioxide emissions.

Energy Efficiency

The CCL tax is uniquely designed to encourage business owners to reduce their energy consumption by making them pay for every unit of gas or electricity consumed. Companies that implement energy-efficient practices can significantly reduce their climate change levy fees. With the help of an energy audit, you can easily reduce your company’s energy consumption.

How Is CCL Calculated?

Business energy providers often charge their customers CCL. You will find the CCL charge in your water bill. After collecting the CCL charge, the money will be sent to the Revenue and Customs office. Your monthly involvement will clearly show the CCL charge.

To qualify for this item, you must register first. Not registering for this levy and evading to pay it will attract a £250 penalty for the two offenses. This means that you will end up paying £500. That’s why you should never ignore the CCL item when paying your utility bills.

CCL Rates

Consult with your energy supplier to get the latest rates when it comes to Climate Change Levy Based Rates. You can call their customer care desk or write them an email for more information. Be sure to disclose all information regarding your plan, location, and tariff.

Paying Lower CCL Rates

If your company is energy-intensive, it qualifies for the CCL levy. However, you must collaborate with an Environment Agency. Here, you are required to strike an agreement known as Climate Change Agreement (Abbreviated as CCA) with that agency. A climate change agreement is designed to bring down carbon emissions to the environment. Also, one of the main roles of a CCA is to bring down the energy usage within an organization.

Engage in tradeoffs. Here, you should demonstrate that you are enacting energy efficiency solutions in your business. You must also show that you are determined to bring down the amount of energy used in your organization.

It’s also important to note that CCA requires all business owners to report energy use as well as carbon emissions over 4 2-year terms. If you miss the targets, you should demonstrate what hindered you from achieving the benchmarks.

If your business agrees to be bound by CCA, it will get a 90 percent reduction when it comes to the CCL rate on its utility bills. Additionally, it will receive a 65 percent reduction when paying bills for all fuels. If your business meets the targets laid out, you will continue receiving the CCL discount.

CCL Exemptions

There are exemptions when it comes to CCL discounts. However, there are explicit requirements you must meet first. Here are some of the requirements you must fulfill to be exempted from paying the CCL.


Businesses that don’t consume a sizable amount of energy can qualify for this exemption. Here, you must demonstrate that your business uses at most 145kWh of gas in a day. To demonstrate this, you need your utility bill.

Domestic User

You must also show and prove that you are using energy for domestic purposes. For instance, if you are running a school, caravan, or an in-house catering joint, you are a domestic energy user. Also, those using energy at home are considered to be domestic users.


If you are operating a charitable organization that engages in noncommercial-related activities, you qualify for the exemption. Again, you must have the right paperwork to prove the activities your organization is engaged in.


Those who don’t get the exemption can get reduced rates. However, you will be required to roll out practical energy efficiency solutions in your business. Singing for CCA is one of the surest ways of qualifying for reduced rates.

Claiming Back CCL

Mistakes are common. They can happen. For instance, you can overpay for CCL. In this case, consider claiming your tax credit. All you need to visit the government website and follow the procedure. Fill out the forms and make your submission.

The Bottom-Line

As an energy manager, it’s important to familiarize yourself with Climate Change Levy. With Climate Change Levy, you can save a substantial amount of energy. The above are key things you should know regarding Climate Change Levy. 

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