Climate Change Levy
Template:Short description Template:Use British English Template:Use dmy dates
The Climate Change Levy (CCL) is a tax on energy delivered to non-domestic users in the United Kingdom.
Scope and purpose
Introduced on 1 April 2001 under the Finance Act 2000, it was forecast to cut annual emissions by 2.5 million tonnes by 2010, and forms part of the UK's Climate Change Programme.Template:Citation needed The levy applies to most energy users, with the notable exceptions of those in the domestic and transport sectors.Template:Citation needed Electricity from nuclear is taxed even though it causes no direct carbon emissions.Template:Citation needed Originally electricity generated from new renewables and approved cogeneration schemes was not taxed, but the July 2015 Budget removed this exemption from 1 August 2015, raising £450m/year.<ref>Template:Cite web</ref>
Rates
From when it was introduced, the levy was frozen at 0.43p/kWh on electricity, 0.15p/kWh on coal and 0.15p/kWh on gas.Template:Citation needed
A reduction of up to 90% from the levy may be gained by energy-intensive users provided they sign a Climate Change Agreement.<ref>Template:Cite web</ref>
Revenue from the levy was offset by a 0.3% employers' rate reduction in National Insurance. However, the Finance Act 2002 subsequently increased that rate by 1%, reversing the reduction. The revenue used to fund a number of energy efficiency initiatives such as The Carbon Trust. However, revenue recycling was removed at the Spending Review 2010, with the revenue going to the Exchequer. <ref>Template:Cite web</ref>
In the 2006 budget it was announced that the levy would in future rise annually in line with inflation, starting from 1 April 2007.<ref>Template:Cite web</ref> In the 2018 Budget, it was announced that the rates of the Climate Change Levy would be adjusted until 2022 so that the gas rate reaches 60% of the electricity rate in 2021 to 2022. <ref>Template:Cite web</ref>
Rates have changed as tabulated below.
| Fuel type | Rate |
|---|---|
| Electricity | 0.541 p/kWh |
| Gas | 0.188 p/kWh |
| LPG | 1.21 p/kg |
| Any other "taxable commodity" | 1.429 p/kg |
| Fuel type | Rate |
|---|---|
| Electricity | 0.847 p/kWh |
| Gas | 0.339 p/kWh |
| LPG | 2.175 p/kg |
| Any other "taxable commodity" | 2.653 p/kg |
| Fuel type | Rate |
|---|---|
| Electricity | 0.811 p/kWh |
| Gas | 0.406 p/kWh |
| LPG | 2.175 p/kg |
| Any other "taxable commodity" | 3.174 p/kg |
See also
- Climate change in the United Kingdom
- Environmental tax
- Energy policy of the United Kingdom
- Energy in the United Kingdom
- Renewables Obligation (United Kingdom)