Climate change levy exemption

two people in an office discussing the climate change levy

Climate Change Levy (CCL) is a government imposed tax that was created to encourage businesses to reduce their gas emissions and make greater efficiencies in their use of energy. But Climate Change Levy isn’t charged on all gas and electricity supplies, so your business or charity could save money if you’re exempt.

Some supplies are either excluded or exempt from the levy, this could be you if:

  • Your gas and electricity supplies are charged at 5% VAT 
  • Your supplies are used in some forms of transport 
  • Your supplies are used to produce other forms of energy (for example, electricity) 
  • You supply to good quality Combined Heat and Power (CHP) schemes  
  • Your supplies are not used as fuel 
  • You’re a larger organisation that is part of a Climate Change Agreement through a trade body

How to apply for CCL exemption

If you’re entitled to one of these exemptions from CCL, you’ll need to complete a PP10 and a PP11 form. You can download these forms from the HMRC website

More information for businesses about the Climate Change Levy

CCL is chargeable only on units/kWh used and not on any other component of the bill such as fixed daily charges. 

CCL unit rate
Taxable commodity  Rate from 01 April 2019
Electricity (£ per KWh)  0.00847
Natural Gas (£ per KWh) 0.00339

Until 1 August 2015, energy generated from qualifying and certified renewable sources, such as solar and wind power, was exempt from CCL. The government has withdrawn this exemption. We now have to charge CCL on renewable energy generated on or after 1 August 2015. 

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