What did the Spring Statement say about the Climate Change Levy? 

On Wednesday 26 March, Chancellor Rachel Reeves delivered her 2025 Spring Statement to the House of Commons.

The main energy announcement of the day was the government committing to removing Climate Change Levy (CCL) costs from electricity used in electrolysis to produce hydrogen and a wider review of the Levy itself.   

What is the Climate Change Levy (CCL)?

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. 

Organisations can claim a CCL discount by successfully applying to the Climate Change Agreement (CCA) scheme. A new CCA scheme is set to open for applications on 1 May 2025. 

What did the Spring Statement say?

The government has committed to removing CCL costs from electricity used in electrolysis to produce hydrogen.  

As a result, a new consultation seeks views to determine the best legislative route to remove these CCL costs. Contributions are accepted as part of this consultation until 7 May 2025. 

Wider CCL review

Recognising the energy landscape has changed significantly since CCL was first introduced, the government also announced a wider review of CCL. 

To inform the scope and direction of this review – which is to take place in the longer term – the above consultation also seeks views on other areas where CCL may need to be reviewed.