Climate Change Levy (CCL) Rates Are Increasing from April 2024
From the 1st of April 2024, there will be changes to the Climate Change Levy (CCL) impacting the main and discount rates for gas and solid fuels.
From the 1st of April 2024, there will be changes to the Climate Change Levy (CCL) impacting the main and discount rates for gas and solid fuels.
What is the Climate Change Levy?
The Climate Change Levy is an environmental tax placed on businesses to encourage the reduction of greenhouse gas emissions and improve energy efficiency.
The tax is added to the gas and electricity bills of businesses operating in the industrial, commercial and agricultural sectors as well as public services, and is paid monthly to their energy provider.
There are two types of rates present in the Climate Change Levy: main and Carbon Price Support.
Main rate – all businesses within the sectors mentioned above will be charged the CCL at the main rate, and the amount will depend on their energy usage.
Carbon Price Support rate – you pay this if you own electricity generating stations or if you’re an operator of combined heat and power stations.
What’s changing in April 2024?
From next month, there will be changes impacting the main and discount rates. This excludes the Carbon Price Support rate, with the charge remaining fixed until 2025.
Main rate changes
As seen from the table below, the government will increase the gas and solid fuel rates in April 2024, with the gas rate now matching the frozen electricity rate.
| Taxable commodity | Rate from 1 April 2022 | Rate from 1 April 2023 | Rate from 1 April 2024 |
| Electricity | £0.00775 per kWh | £0.00775 per kWh | £0.00775 per kWh |
| Natural gas | £0.00568 per kWh | £0.00672 per kWh | £0.00775 per kWh |
| LPG | £0.02175 per kilogram (kg) | £0.02175 per kg | £0.02175 per kg |
| Any other taxable commodity (solid fuels) | £0.04449 per kg | £0.05258 per kg | £0.06064 per kg |
Your energy provider will calculate this environmental tax and automatically include it in your energy bill. The charge will be listed as a separate item and once collected, your supplier will pass it onto HMRC.
Discount rate changes
Administered by the Environment Agency, the Climate Change Agreements (CCAs) are voluntary deals made by industry sector associations to reduce energy consumption and emissions in return for CCL discounts. In pursuit of net-zero by 2050, the CCA has been extended until March 2027.
Holders of CCAs get the following discounts on the Climate Change Levy. The increase in discount rate for gas and solid fuel mirrors the increase in tax within the main rate.
| Taxable commodity | Rate from 1 April 2022 | Rate from 1 April 2023 | Rate from 1 April 2024 |
| Electricity | 92% | 92% | 92% |
| Gas | 86% | 88% | 89% |
| LPG | 77% | 77% | 77% |
| Any other taxable commodity | 86% | 88% | 89% |
Pay a reduced rate on the CCL
If you are not a CCA holder, there are other means of reducing levy costs.
The CCL was created to improve a company’s sustainability efforts when it comes to energy consumption. Therefore, one of the best ways to gain a levy reduction is by decreasing energy usage through efficiency measures. This could include lowering lighting consumption through LEDs or implementing heating reduction initiatives like installing double glazing or draught excluders.
However, before focusing on energy efficiency, we recommend carrying out a site audit to identify any areas of overconsumption and tackle these accordingly.
As the UK’s leading energy and sustainability advisor, we have supported over 3,500 organisations to date with their energy efficiency and carbon reduction requirements.
If you would like our expert support navigating the Climate Change Levy or the Climate Change Agreements, please contact us on 01772 689 250 or email [email protected].
