CCL Rates 2026/27 - Climate Change Levy Charges

The Climate Change Levy Rates (CCL) is a tax on energy delivered to non-domestic users in the United Kingdom. Its aim is to provide an incentive to increase energy efficiency and to reduce carbon emissions, however there have been ongoing calls to replace it with a proper carbon tax. Introduced on April 1st, 2001 under the Finance Act 2000 it was forecast to cut annual emissions by 2.5 million tonnes by 2010, and forms part of the UK’s Climate Change Programme.

The Climate Change Levy Rates applies to most energy users, with the notable exceptions of those in the domestic and transport sectors. Electricity generated from new renewables and approved co-generation schemes is not taxed although electricity from nuclear energy is taxed even though it causes no direct carbon emissions.

CCL Main Rates

Period	Electricity (£/kWh)	Gas (£/kWh)	LPG (£/kg)	Other Solid Fuels (£/kg)
Apr 2022 – Mar 2023	£0.00775	£0.00406	£0.02175	£0.02653
Apr 2023 – Mar 2024	£0.00775	£0.00672	£0.02175	£0.05258
Apr 2024 – Mar 2026	£0.00775	£0.00775	£0.02175	£0.06064
Apr 2026 – Mar 2027 (current)	£0.00801	£0.00801	£0.02175	£0.06264
Apr 2027 onwards	£0.00827	£0.00827	£0.02175	£0.06468

Source: HMRC Climate Change Levy rates. Updated May 2026.

CCL Reduced Rates (CCA Holders) from 1 April 2026

Commodity	% of Main Rate	Effective Rate (Apr 2026)
Electricity	8%	£0.000641/kWh
Natural gas	11%	£0.000881/kWh
LPG	23%	£0.005003/kg
Other solid fuels	11%	£0.006890/kg

Reduced rates apply to businesses with a valid Climate Change Agreement. Source: HMRC CCL rates from 1 April 2026.

HM Revenue and Customs is responsible for publishing the active CCL rates and planned amendments to the rates. A general guide to Climate Change Levy is available at www.gov.uk/guidance/climate-change-levy-rates. The CCL is added to energy bills before VAT and, although there is no legal requirement to itemise it, it often appears as a separate item on bills. Because the levy sits inside the bill total, it is itself subject to VAT on business electricity and gas, charged at the standard 20% rate — though many businesses qualify for a reduced 5% rate.

Depending upon eligibility the MinMet exclusion provides a discounts for CCL charges, and potentially full CCL depending upon processes and methods.

A business can make the most of recent legislative changes by gaining fiscal relief from the CCL, allow our experts to assess your companies viability for a Mineralogical and Metallurgical exclusion and potentially save thousands of pounds.

We will manage the application process while you sit back and receive the benefits.

Customers are required to submit a new PP10 form to HMRC which will apply for relief on their invoices. To ensure that suppliers can reflect the CCL relief on subsequent bills, customers must also complete a PP11 form and submit it to their supplier.

From 1 April 2026 the main CCL rate for both electricity and gas rose from £0.00775 to £0.00801 per kWh, an increase of 3.35%. A further rise to £0.00827 per kWh is already legislated for 1 April 2027.

Two points are commonly misreported. Electricity and gas have been charged at the same main rate since April 2024, not since 2026: gas caught up that year with a 15.33% jump from £0.00672, while electricity was unchanged. And LPG has not moved at all, staying frozen at £0.02175 per kg. Only the kWh-based fuels and other solid fuels are rising.

What the Increase Costs

Annual electricity use	CCL 2025/26	CCL 2026/27	Increase	CCL 2027/28
250,000 kWh	£1,937.50	£2,002.50	£65.00	£2,067.50
1,000,000 kWh	£7,750.00	£8,010.00	£260.00	£8,270.00
10,000,000 kWh	£77,500.00	£80,100.00	£2,600.00	£82,700.00
50,000,000 kWh	£387,500.00	£400,500.00	£13,000.00	£413,500.00

Gas is charged at the same rate, so a site using both fuels should apply the figures to each meter separately.

If You Hold a Climate Change Agreement

CCA holders pay a reduced rate: for electricity that is 8% of the main rate, or £0.000641 per kWh from 1 April 2026. The increase still applies, just on a smaller base. Full reduced rates are in the CCA table above.

Suppliers are not legally required to itemise the Climate Change Levy, and practice varies. Some show a single CCL line with the rate and the kWh it was applied to. Others fold it into a combined government levies or non-commodity line alongside network and policy costs. A few show nothing at all and build it into the unit rate.

Wherever it appears, three things are always true. CCL is charged on the units you actually consumed, not on your standing charge. It is applied before VAT, so VAT is calculated on a total that already includes the levy. And it is your supplier, not HMRC, who collects it from you.

What to Check on the CCL Line

• The rate used. For supplies on or after 1 April 2026 it should be £0.00801 per kWh for both electricity and gas. Anything materially different needs an explanation.
• Bills that straddle 1 April. A period running across the rate change should show the old rate up to 31 March and the new rate from 1 April, either as two lines or as an apportionment. A single blended rate across the whole period is worth querying.
• Your CCA relief. If you hold a Climate Change Agreement and the levy is still being charged at the full main rate, the PP11 certificate has probably not reached the supplier. This is one of the more common billing errors we see.
• De minimis supplies. Very low-usage sites fall below the de minimis threshold, which carries the reduced rate of VAT and no CCL at all. A small site being charged CCL is worth checking.
• Estimated reads. CCL follows consumption, so an over-estimated read overcharges the levy as well as the commodity. It corrects itself when the account is reconciled, but only if someone reconciles it.

Carbon Price Support is technically a rate of Climate Change Levy, which is why the two get confused, but it works in the opposite direction. CPS is charged to electricity generators, not to the businesses that buy the electricity.

Introduced on 1 April 2013 as the tax mechanism behind the UK carbon price floor, CPS applies to the gas, LPG and solid fossil fuels burned to generate electricity at stations above 2MW. The rate began at £4.94 per tonne of carbon dioxide and stands at £18 per tonne for 2026/27.

You will never see a CPS line on a business energy bill. It reaches you indirectly, priced into the wholesale cost of electricity, because generators recover it through the price at which they sell power. The practical consequence is simple: a carbon tax showing on your invoice is CCL, and while nobody can reduce your CPS exposure for you, your CCL exposure is something you can act on.

Climate Change Levy: Key Dates

Date	What happened
1 April 2001	CCL introduced under the Finance Act 2000, as part of the UK Climate Change Programme.
1 April 2013	Carbon Price Support rates introduced as the tax mechanism behind the carbon price floor, starting at £4.94 per tonne of CO2.
1 April 2024	Gas rises 15.33% to £0.00775 per kWh and reaches parity with electricity, which is unchanged.
1 April 2026	Main rate rises 3.35% to £0.00801 per kWh for both electricity and gas. LPG stays frozen at £0.02175 per kg.
1 April 2027	Main rate rises to £0.00827 per kWh. Already legislated.

What is the Climate Change Levy?

The Climate Change Levy is a UK tax on the energy that businesses and public sector bodies use. It covers electricity, gas, LPG and other solid fuels supplied to non-domestic users, and the idea is to push organisations towards using less and lowering their carbon emissions. Domestic energy and most transport fuel fall outside it.

Who pays the Climate Change Levy?

Most businesses, public sector organisations and other non-domestic energy users pay it. Your supplier adds the levy to your bill and passes it on to HMRC, so you never deal with HMRC directly. Households are not charged, and charities carrying out non-commercial work are usually exempt.

How much is the Climate Change Levy in 2026?

From 1 April 2026 the main rate is 0.801p per kWh on both electricity and gas. LPG is charged at 2.175p per kg and other solid fuels at 6.264p per kg. The rates normally rise each April, so check the table above against the dates shown on your bill.

How is the Climate Change Levy calculated?

It is worked out on the energy you actually use. The supplier multiplies your metered consumption by the rate for each fuel, then adds the total to your bill before VAT. When a billing period runs across the 1 April change, both the old and new rates are applied to the relevant days.

What does CCL mean on my electricity bill?

CCL is the line for the Climate Change Levy. Suppliers are not legally required to itemise it, but many show it as a separate charge next to your unit rates and standing charge. It is applied before VAT is added.

Who is exempt from the Climate Change Levy?

Domestic users and charities engaged in non-commercial activities are exempt, along with very small users who fall under the de minimis threshold. Energy used in certain mineralogical and metallurgical processes can also be excluded, and businesses holding a Climate Change Agreement pay a reduced rate rather than the full one.

How do I claim Climate Change Levy relief?

If you hold a Climate Change Agreement you qualify for the reduced rate. You send a PP11 supplier certificate to your energy supplier so the discount shows on your bills, and a PP10 to HMRC. We can check whether your sites and processes qualify and handle the paperwork for you.

When was the Climate Change Levy introduced?

It came into effect on 1 April 2001 under the Finance Act 2000, as part of the wider UK Climate Change Programme.

Further Reading: What Is the Climate Change Levy Exemption and Does Your Business Qualify?
Non-Commodity Costs Explained: The Hidden Two Thirds of Your Energy Bill
Climate Change Agreements: How to Cut Your CCL Bill by Up To 92%
VAT Scrapped on Electricity Bills from 1 October: What It Means for Business
VAT on Business Energy: When You Pay 5% Instead of 20%