Climate Change Levy (CCL) is the government tax charged on the units of energy and acts as an environmental tax on energy delivered to non-domestic users. It’s designed to encourage businesses to be more energy efficient, helping to reduce their overall greenhouse gas emissions.
What is changing?
Following the government’s decision to terminate the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) on March 31st 2019, the CCL would become the UK’s only carbon tax on energy bills. As such, the CCL rates will be uplifted from April 2019 to cover the cost of the outgoing CRC’s scheme.
What rates will be paid?
|Taxable commodity||Rate from 1 April 2016||Rate from 1 April 2017||Rate from 1 April 2018||Rate from 1 April 2019|
|Electricity (£ per kilowatt hour (KWh))||0.00559||0.00568 ↑2%||0.00583 ↑3%||0.00847 ↑45%|
|Natural gas (£ per KWh)||0.00195||0.00198 ↑2%||0.00203 ↑3%||0.00339 ↑67%|
Who will be affected?
Any customers who are currently charged CCL will continue to be unless there are changes in circumstances which would make them eligible for exemption.
The CCL applies to businesses in the industrial, public services, commercial and agricultural sectors, and is charged on ‘taxable commodities’ for heating, lighting and power purposes.
Businesses exempt from paying main CCL rates include charities engaged in non-commercial activities, nursing homes and businesses that consume energy below the de minimis limit (1,000 kWh per month).
For CCA customers, this change brings some good news. The entitled discount will be increased from 90% to 93%. Some suppliers have advised that new CCA forms will need to be completed for the new discount to be applied.
How can I reduce my CCL costs?
Because the CCL is billed against your consumption, the only way to reduce the cost would be to reduce your consumption. If your monthly consumption is low enough, there would be no CCL charges at all for that period (see below):
|Less than 33 kWh per day||Less than 5 therms or 145 kWh per day|
|Less than 1,000 kWh per month||Less than 150 therms or 4,397 kWh per month|
How Pulse can help:
Because the CCL is directly linked to how much energy you use, maintaining minimal consumption levels where possible means a lower CCL charge. This will become even more important as of April 2019 when the CCL rates are increased substantially as a means of replacing costs related to CRC.
For more information on the Climate Change Levy (CCL), including how to find it on your itemised business energy bill, please contact Pulse Business Energy.