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Climate Change Levy

In April 2001, UK businesses were given a major incentive to cut energy usage when the government introduced the Climate Change Levy (CCL).

What is the Climate Change Levy?

It is a levy on the energy used by businesses and is charged on every unit (kWh) of energy consumed.

Why was the levy introduced?

As part of the Kyoto Protocol, governments around the world have agreed targets for reducing greenhouse gas emissions. The UK Government has set itself a challenging target to reduce emissions in this country by 20 per cent by 2010. Businesses have a major part to play in helping to achieve this target and the Climate Change Levy has been introduced to encourage them to reduce energy consumption.

CCL Rates Rise

Since April 2007 Climate Change Levy (CCL) is index linked with RPI (Retail Price Index) and therefore, has increased again in line with inflation with effect 1st April 2009. From 1st April 2009, all taxable fossil fuel commodities will incur a Levy for every kilo-watt-hour (kWh) of applicable energy delivered to site. The Government has pushed the environment up their list of priorities since 2006, devoting a significant proportion of the Budget speeches to ways of reducing carbon emissions and announcing a raft of new measures aimed to ease the UK\'s transition to a low-carbon economy. Key initiatives inevitably focused on the energy sector and consumption as well as production. The Government are standing firm on the Climate Change Levy (CCL), which they believe is playing an important role in reducing emissions of CO2. The levy will rise in line with inflation in 2007, Brown said, \"Having kept the Climate Change Levy at its original level for its first five years, it is my intention that from 2007 we index the Climate Change Levy in line with inflation\".

The Levy is only applied to those fuels that are generated or produced from fossil fuel sources, whilst exemption from the Levy exists where the fuel is procured from Renewable sources (i.e. wind generated electricity).

The New Rates for 2009/10 will be:

• Electricity - 0.470p/kWh
• Gas - 0.164p/kWh
• LPG - 1.050p/kg
• Solid Fuels - 1.281p/kg

Do you need to anything?

No. If we check your invoices, we have updated the Contract Rates in our systems, so that we can check and verify the Supplier Invoices.

How can you reduce the impact of the levy?

Businesses can more than offset the extra cost of the levy by implementing energy efficiency strategies to reduce energy usage. This is an excellent way for your business to cut its costs and help the environment at the same time.