Climate Change Levy (CCL) UK 2026: Rates, Exemptions & CCA Discounts

If you have ever scanned a business energy bill and seen “CCL” charged separately, you have met the Climate Change Levy. Introduced in 2001 and rebased multiple times since, the CCL is the UK’s carbon tax on business energy. This guide explains what the 2026 rates are, who pays, who gets exemptions, and how to claim the energy-intensive discount via a Climate Change Agreement.

What is the Climate Change Levy?

The CCL is a tax on the use of energy in industry, commerce, agriculture and the public sector. It is collected by your energy supplier as a separate line on your bill and remitted to HMRC. Domestic energy and charity non-business use are exempt.

Climate Change Levy rates 2026

The 2026 main CCL rates are:

• Electricity: 0.775p per kWh.
• Gas: 0.775p per kWh.
• LPG: 2.175p per kg.
• Solid fuels (coal, coke): 6.064p per kg.

The 2024-25 government policy of equalising electricity and gas CCL rates was completed; both now sit at 0.775p/kWh in 2026.

Who pays the Climate Change Levy?

You pay CCL if your business is in:

• Industry, commerce or agriculture.
• The public sector (central or local government).
• Service businesses (offices, shops, restaurants, gyms, hotels).

You are exempt from CCL if:

• You are a charity engaged in non-commercial activity.
• The supply is for domestic use (mixed-use sites pro-rate the exemption).
• Your supply is below the de minimis threshold (33 kWh/day electricity, 145 kWh/day gas) — you also qualify for 5% VAT.
• The energy is used for transport (with separate fuel duty rules) or feedstock (chemical processes).

Climate Change Agreements (CCAs) — the 92% discount

Energy-intensive sectors (steel, cement, glass, chemicals, paper, food processing, data centres, ceramics and 50+ others) can sign a Climate Change Agreement with the Environment Agency. In return for committing to specific energy efficiency or carbon intensity targets, they receive:

• 92% reduction in CCL on electricity.
• 89% reduction in CCL on gas.

CCA discounts apply to qualifying processes only, not to the whole site. Office and welfare consumption pays full CCL.

How to claim CCL exemption or discount

For full exemption (e.g. de minimis or charity), submit a VAT/CCL declaration form to your supplier. For CCA discount, you need:

1. Membership of an Environment Agency-approved CCA scheme via your sector trade association.
2. A signed CCA setting out your efficiency target.
3. A PP10/PP11 form submitted to your energy supplier authorising the reduced CCL rate.

Backdating CCL exemption is possible — HMRC allows up to 4 years of CCL refunds if you can demonstrate the exemption applied throughout.

CCL on your bill — what to check

Quarterly checks on your CCL line:

• CCL is charged on the same kWh as your unit rate — check the kWh figure matches.
• CCL is charged before VAT — VAT is then applied to the gross including CCL.
• If you have a CCA discount, check the reduced rate is applied to the qualifying portion only.
• If you switched supplier mid-period, ensure CCL is not double-counted.

Frequently Asked Questions

Comparing energy and unsure how CCL affects your quotes? Get a free 60-second quote — CCL is itemised in our quotes so you see the full all-in cost, not just the unit rate.