If you’ve ever looked at an energy bill and wondered what Climate Change Levy (CCL) is, you’re not alone. It’s one of the most common charges customers ask us about. Here’s what it is, how much it costs, and whether your organisation might be exempt.

What is the Climate Change Levy?

The Climate Change Levy is a UK government tax applied to the energy used by businesses and organisations.

It exists to help the UK:

• Reduce carbon emissions
• Improve energy efficiency
• Support long‑term climate goals

CCL appears as a separate line on your electricity and gas bills.

What does CCL cost?

HMRC sets the rates, which change most years in April.

From 1 April 2026, both electricity and natural gas will be charged at:
0.801p per kWh

This reflects the completed equalisation of gas and electricity rates and the 2026 uprating.

CCL rates

What this means in real terms

For an organisation using:

• 50,000 kWh electricity
• 100,000 kWh gas

From April 2026:

• Electricity CCL → £400.50 per year
• Gas CCL → £801.00 per year

How has CCL changed over time?

CCL has been around since 2001, but the rules have changed significantly over the years.

2001–2010

• Lower CCL rates
• Renewable electricity could avoid CCL via Levy Exemption Certificates (LECs)

2011–2014

• Gradual increases
• Stronger focus on taxing energy consumption

2015: A key turning point

LECs abolished

• Renewable electricity stopped being exempt
• All electricity and gas for business use became chargeable

2016–present

• Electricity and gas CCL gradually equalised
• April 2026 increases follow RPI uprating

Who is exempt from CCL?

Fully exempt

• Domestic/residential properties
• Charities where the energy is used solely for non‑business charitable purposes

Reduced rates (not exempt)

• Energy‑intensive industries with a Climate Change Agreement (CCA)

5% VAT means no CCL

If you are charged 5% VAT on your energy bill, you will not be billed CCL.

This is because HMRC rules state:

“Where VAT is charged at the reduced rate, the supply is automatically excluded from CCL.”

You may receive 5% VAT if:

• You’re a charity or non‑profit with qualifying non‑business activity
• You provide residential accommodation (e.g. care homes)
• You meet the low‑usage thresholds for electricity or gas
• (These may be applied automatically.)

Key things to remember

• CCL applies to electricity and gas for non‑domestic use
• From April 2026, the rate for both is 0.801p/kWh
• Green tariffs don’t remove CCL

If you’re charged 5% VAT, you won’t be charged CCL

How Utility Aid can help

We check CCL exemptions as part of our invoice validation service, making sure charities aren’t paying charges they shouldn’t be. If you’d like us to review your energy bills, get in touch.