Climate Change Levy (CCL) micro-guide

What is its purpose?

The CCL is essentially a carbon tax for all non-domestic energy users.  The CCL is a charge added to each kWh of energy you use and is intended to incentivise all non-domestic energy users to improve energy efficiencies and reduce carbon emissions.

Does it affect me?

Yes, unless you are a domestic energy user or classed as a domestic user by being:

  • A business that uses small amounts of energy such as a piped gas supply of not more than 4397kWh per month (e.g. cicra £220)

    or

  • An electricity supply not exceeding 1000kWh per month (e.g. circa £120)

Are there any other exemptions? Yes, electricity generated, forms of renewable energy such as solar and wind power and good quality CHP plants.

What do you need to do to comply?

Nothing, your supplier will add the CCL to your bill and pay directly to HM Revenue and Customs.

What are the consequences for not complying?

You can’t not comply as your energy supplier ensures you are compliant.

The lower your bills, the less you pay.

What can you do to minimise the impact?

The lower your bills, the less you pay so looking at how you can reduce energy consumption, through an energy survey or an audit would be a good place to start. The source of your energy is also key here so look at the make-up of your energy sources and see if you can source more energy from some of the exempt sources like renewables.  

Your other option is to enter into a Climate Change Agreement (CCA) where you will reduce the cost of your CCL by 90% on electricity and 65% on other fuels.

ISO50001 would be the best route if your business is serious about energy management it’ll ensure you’re compliant, ensure you are looking at energy consumption from a perspective of continuous improvement to reduce your energy usage and costs; and even mean you are compliant with some pieces of legislation.

How can EEF help?

For help and guidance on carbon and energy legislation, call 0808 168 5874.

 See the rest of our microguides and other advice on carbon and energy compliance issues.

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