The Climate Change Levy (CCL) is the government’s environmental tax on commercial energy consumption, charged in pence per kWh by the energy supplier.

CCL is designed to encourage businesses to be more energy efficient and will become the UK’s only carbon tax on energy bills when the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) terminates on 31st March 2019. CCL rates will be uplifted from April 2019 to cover the cost of the outgoing CRC’s scheme.

Steve Boulter, Purchase Direct’s Utilities Procurement Manager, commented: “Although CCL is rising by about 45%, the overall impact to the majority of our customers’ total energy cost is likely to be around 1.5-2%.”

Main rates

Taxable commodity Rate from 1 April 2017 Rate from 1 April 2018 Rate from 1 April 2019 Rate from 1 April 2020
Electricity (£ per kilowatt hour (KWh)) 0.00568 0.00583 0.00847 0.00811
Gas (£ per KWh) 0.00198 0.00203 0.00339 0.00406

Will all businesses have to pay CCL?

Any customers who are currently charged CCL will continue to be unless there are changes in circumstances, which would make them eligible for exemption.

CCL applies to businesses in the industrial, public services, commercial and agricultural sectors, and is charged on ‘taxable commodities’ for heating, lighting and power purposes.

Businesses exempt from paying main CCL rates include charities engaged in non-commercial activities, nursing homes and businesses that consume energy below the de minimis limit (1,000 kWh per month).

How can Purchase Direct help?

CCL is billed against energy consumption; therefore the only way to mitigate these increases would be to reduce consumption. Purchase Direct support a multitude of businesses through the ongoing delivery of our Energy Management Programme, often achieving savings of over 20%.

If you are a Purchase Direct member and would like to know more, please contact your Account Manager. Alternatively, if you are not a member but would be interested in discussing this further, please email with your contact details for one of our energy advisers to call you.