Brighter business / What’s the Climate Change Levy (CCL) doing on your business energy bill?

What’s the Climate Change Levy (CCL) doing on your business energy bill?

16th September 2020

The fight against the climate crisis is being tackled in more ways than one. And if you’ve not looked at an energy bill breakdown closely (it’s okay, you’re not alone) you’d be forgiven for not noticing the Climate Change Levy (CCL).

If you didn’t know, the Climate Change Levy is a scheme that’s been long in place to incentivise businesses to join on the journey to a lower carbon future for the UK. Read on to find out how.

Isn’t my energy bill just the energy I use?

No – in fact, anywhere between 40-70% of your energy bill is made up of non-energy costs. A good deal of what businesses pay for their energy is going towards things like the upkeep of our power grid infrastructure and other non-energy costs.

What’s the Climate Change Levy?

The Climate Change Levy, often shortened to CCL, is an environmental tax charged on the amount of electricity and energy businesses use.

It may feel like the climate crisis has only been a hot topic in recent years, but the CCL was brought into effect almost two decades ago, in 2001.

The tax is designed to incentivise lower energy consumption – one of the main cornerstones for minimising our energy usage and cutting carbon emissions.

Who pays CCL?

All business energy users pay this tax, apart from a few exceptions:

There are also some exemptions for power that won’t be used in the UK, and certain forms of transport – you can check all this on the government web page here.

How is CCL calculated?

Suppliers are responsible for charging the cost of CCL to their customers, which is why you’ll see it on your business bill. However, the rates are set by the government.

CLL rates are calculated per kilowatt hour of usage, and included as a line item on your energy bill.

As the CCL is a tax, this cost doesn’t go to your supplier – your supplier transfers it directly to HM Revenue & Customers.

How can I save money while helping the environment?

There’s a very simple but proactive solution: use less energy.

Using less energy will not only lower your bills because you’re paying for less electricity or gas, but it will simultaneously lower how much CCL you pay.

In fact, businesses that are especially energy-intensive – such as supermarkets or factories – can formalise their commitment to consuming less with a Climate Change Agreement. This is a voluntary initiative where businesses commit to reducing energy use and carbon dioxide emissions in exchange for a discount on their CCL tax. Click here to find out more.

Whichever camp your business sits in, the less we’re all consuming – energy or otherwise - the smaller our combined carbon footprint becomes. And every small difference leaves our planet in better shape.

Is there a simple plan to reduce energy consumption?

We’re glad you read this far – because you don’t need to feel like you’re tackling business sustainability efforts alone. We’ve created a free guide that shows businesses how they can reenergise their agenda – looking after the planet while taking advantage of cost-saving measures.

Click below to download now.

Create sustainability success - download your how-to guide now

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