Understanding how the CCL works will help you determine the next steps for your organisation

The Climate Change Levy is there to encourage businesses to be smarter and more sustainable about their energy use, but what exactly does it involve? We’ve put together this handy guide to tell you all you need to know.

What is the CCL?

The Climate Change Levy is an environmental tax on your business gas and electricity usage. The purpose of the CCL is to encourage organisations across all industries to be more environmentally friendly when it comes to their energy, using less energy more efficiently in an effort to combat the growing impact of the climate crisis.

As such, the CCL is charged on taxable commodities for heating, lighting and power purposes. These include natural gas, petroleum, coal and electricity, but it is not charged on road fuel and other oils, as these are already subject to excise duty.

CCL rates are usually revised at the start of each new financial year. At the start of April 2021, the electricity rate was dropped to 0.775p per kWh, while the gas rate rose to 0.465p per kWh, because electricity it regarded as a greener source of energy as it can be generated by renewable means like wind, wave and solar.

Is your business affected?

There are two rates for the CCL, and these are the main rate and the Carbon Price Support rate. Different businesses will be impacted by different rates depending on their specialist industry, and the way they generate their power.

If you work in the commercial, industrial, agricultural or public services sectors, the Climate Change Levy will be charged at the main rate on gas, electricity and solid fuel, including coal.

Meanwhile, if you own generating stations or operate combined heat and power stations, the Carbon Price Support rate will apply.

Are there any exemptions from the CCL?

Each business must register for the CCL so that the charge can be calculated by your business energy supplier and added to your bill. If you do not pay the CCL, or don’t register, you will face a penalty fine of £250 for each failed payment.

However, not all businesses are required to pay the CCL. If you are a charitable organisation engaged in non-commercial activities, you could be exempt from the tax altogether. You may also be able to pay a reduced rate even if you are not exempt, by signing a Climate Change Agreement, or CCA.

How can you make your business more energy efficient?

Even small changes can make a big difference when it comes to sustainability, and there are several ways you can make your business more energy efficient. Using light sensors can reduce energy wastage by around 30%, simply by making sure lights are only on when someone is occupying a space. Similarly, LED lighting uses 75% less electricity than equivalent incandescent lighting, and produces very little carbon dioxide.

You can also switch off devices and office equipment when it’s not in use, and activate sleep mode so things power down of their own accord. Even something as simple as turning down the thermostat can make a big difference in the long run.

Consultiv Utilities can help you make the most of your energy

Prioritising sustainability with your business energy may feel like a big task, but Consultiv Utilities are on hand to ensure that your organisation takes the necessary steps.

We can help you make sense of your energy contracts, and find a competitive deal for your needs. We can also help you meet any and all sustainability goals held within your organisation in order to promote a greener future for your organisation.  

Thanks to our years of expertise, we are confident that we can cut your business energy costs. We will work with you every step of the way to ensure that your utilities are both manageable and transparent.

Are you ready to improve your energy outlook? Get in touch with the team at Consultiv Utilities today.