The Climate Change Levy (CCL) is an environmental tax on energy used by businesses and other non-domestic users in the UK. Customers do not pay it to HMRC directly: business energy suppliers add it to their bills and account for it.
Who pays
CCL applies to businesses in the industrial, commercial, agricultural and public services sectors. According to GOV.UK, the main rates do not apply to energy supplied to domestic consumers, to charities for non-business use, or to businesses that use only small amounts of energy. Household energy bills therefore do not include CCL.
Businesses in energy-intensive sectors that sign a climate change agreement (CCA) and meet its targets pay a much lower rate. A separate element, the Carbon Price Support rate, is paid by power stations and combined heat and power plants on the fossil fuels they burn.
Rates
Main rates set by GOV.UK:
| Commodity | From 1 April 2026 | From 1 April 2027 |
|---|---|---|
| Electricity | 0.801p per kWh | 0.827p per kWh |
| Gas | 0.801p per kWh | 0.827p per kWh |
| Liquefied petroleum gas (LPG) | 2.175p per kg | 2.175p per kg |
| Other taxable commodities, such as coal | 6.264p per kg | 6.468p per kg |
Under a CCA, the discount is 92% for electricity and 89% for gas.
Is CCL charged on the standing charge?
GOV.UK sets the electricity and gas rates per kilowatt-hour supplied, so the levy is worked out on the units of energy a business uses. The official rates guidance does not set any CCL amount on the daily standing charge. If a bill appears to apply CCL in a different way, the supplier should be able to show how it has been calculated.
At 0.801p per kWh, a business using 100,000 kWh of electricity a year would pay £801 in CCL before any CCA discount.
Read more: Standing charge.