Life after the Climate Change Levy increase

aslphalt road leading to wind turbines

Life after the Climate Change Levy increase

In April the Climate Change Levy (CCL) rate increased, so we thought that we should tell you a little bit more about what that means and what you can do to offset the costs.

… For a start, make sure to keep a closer eye on your bills within the coming months!

And talking of bills, if you need any assistance in budgeting or managing your money – remember ESS can help.

What is the CCL?

The scheme is a environmental tax which aims to help the UK to meet its legally binding commitments. It was introduced to businesses in April 2001, and since then, has gradually inched up by 3% per year.

Charging companies on their ‘taxable commodities’, including heating, lighting and power purposes, can motivate companies to cut down on their energy usage. The tax increase should tempt companies to opt for low CO2 sources, such as wind, solar or geothermal energy.

Since the government terminated the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), the CCL is now the UK’s only carbon tax on energy bills. The UK government introduced a number of environmental taxes and relief schemes encouraging businesses to operate in a more environmentally-friendly manner.

So, now, more than ever, businesses need a trusted energy partner, and to be armed with the knowledge of what’s to come, since it should be expected that bills could creep up by at least 67%.

What does it mean for your business?

The scheme applies to businesses within the industrial, public service, commercial and agricultural sectors. However, your company may be exempt from the levy if any of the following are true for you:

  • For electricity, this means using an average of less than 33 kWh per day (1,000 kWh per month)
  • For gas, this means using an average of less than 145 kWh per day (4,397 kWh per month)
  • It is a charitable business engaged in non-commercial activities
  • Your business generates electricity from a renewable source and uses it exclusively on-site
  • The business invests in Combined Heat and Power (CHP)
  • Your business is very small: businesses that meet the minimal use requirements and are charged the reduced rate of VAT (5%) don’t pay the CCL.

How much the CCL could cost your business, per kilowatt hour on natural gas and electricity

Time periodNatural gasElectricity
1 April 2016 to 31 March 20170.195p/kWh0.559p/kWh
1st April 2017 to 31st March 20180.198p/kWh0.568p/kWh
1st April 2018 to 31st March 20190.203p/kWh0.583p/kWh
1st April 2019 to 31st March 20200.339p/kWh0.847p/kWh


Evidently, the CCL needs to go ahead in order to incentivise businesses to reduce their consumption. Stringent behaviour helps to minimise energy consumption and the negative impact regarding energy usage. To go the extra mile, these price increases can be softened by our sustainability services, such as, carbon reporting, auditing, and sustainability plans & strategies.

Read our article on SME’s and their carbon footprint, in order to understand how little changes can make a big difference.

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