Green Gas Levy Explained: The GGL Charge on Business Gas Bills

What the levy funds, why it sits on your gas bill, and how to manage its impact on your business.

Most businesses know their electricity bill is stuffed with levies. Far fewer realise their gas bill carries one too. The Green Gas Levy is small today, but it is growing, and it is the charge on your gas supply that helps fund Britain’s shift to greener gas.

What the Green Gas Levy Is

The Green Gas Levy (GGL) is a government charge that funds the Green Gas Support Scheme, the programme designed to increase the amount of biomethane injected into the national gas grid. Biomethane is produced by anaerobic digestion, breaking down farm waste, food waste and other organic material to make a gas that is chemically almost identical to natural gas, but far lower in carbon. Every unit of biomethane that goes into the grid displaces a unit of fossil gas, which is why the government wants more of it.

The levy has applied since November 2021 and sits alongside the other environmental and social levies you already pay on electricity, such as the Renewables Obligation and the Feed-in Tariff charge. The difference is that the GGL falls on gas rather than power, which is why it tends to get overlooked: businesses spend a lot of time scrutinising the non-commodity costs on their electricity bills and far less on the equivalent charges buried in their gas rates.

Why It Is on Your Bill

Like most green levies, the Green Gas Levy is not charged directly by the government. It is collected from licensed gas suppliers, who then recover it from their customers through the rates they quote. For most businesses it is bundled into the standing charge or the unit rate rather than shown as a separate line, so unless you ask for a full cost breakdown you may never see it named explicitly.

That bundling is exactly why it pays to understand your non-commodity costs in detail. The GGL is only one of a long list of third-party charges that together make up the majority of a typical business energy bill. Our guide to non-commodity costs sets out how the pieces fit together, and if you want to see where the GGL sits on your own invoice, our walkthrough on how to read your business energy bill shows you where to look.

How It Is Charged

The Green Gas Levy is applied as a fixed daily charge per gas meter, rather than as a rate on every kWh you burn. That structure matters: because it is a per-meter charge, it lands more heavily, in percentage terms, on sites with low gas consumption than on large industrial users, in the same way a fixed standing charge does. A multi-site business with many small gas meters can therefore pay the levy many times over.

The rate is set annually by the Department for Energy Security and Net Zero and administered by Ofgem, which publishes the current figures and collects the money from suppliers. Because it is reset each year, it is worth checking the latest rate rather than assuming last year’s number still applies. You can find the current levy rate and the scheme rules on Ofgem’s Green Gas Levy pages.

Where It Is Heading

The direction of travel is upward. The Green Gas Support Scheme runs for several years and the levy is calibrated to raise the money the scheme needs, so as more biomethane plants connect and draw support, the levy that funds them tends to grow. It remains small relative to the network and capacity charges on your bill, but it is part of a wider pattern: the cost of decarbonising Britain’s energy system is increasingly recovered through levies and network charges rather than through the wholesale price of the fuel itself.

That is the same logic driving the sharp rises in electricity network charges, and it means the “non-commodity” portion of both your gas and power bills will keep growing as a share of the total. Businesses that understand this now will budget more accurately and avoid nasty surprises at renewal.

What You Can Do About It

You cannot opt out of the Green Gas Levy, but you can manage its impact. Start by knowing your exposure: ask your supplier or broker for a full breakdown of the non-commodity charges on your gas contract so the levy is a quantified figure rather than an estimate hidden in your rate. If you run multiple sites, review whether any low-use gas meters can be consolidated or removed, since the per-meter structure means every redundant meter carries its own share of fixed charges.

Beyond the levy itself, the bigger prize on gas is buying well. A well-structured contract and the right procurement strategy can more than offset small movements in levies of this kind. Our guide to business gas deals covers how to secure a competitive rate, and for larger or multi-site users a flexible approach through energy procurement lets you manage non-commodity volatility rather than being locked into a single all-in price.

What This Means for Your Business

The Green Gas Levy is a small but growing charge that reflects a much bigger shift: the cost of greening the gas grid is landing on business bills, and it is doing so through a fixed per-meter charge that hits smaller and multi-site users hardest. It will not be the line that makes or breaks your budget, but understanding it, and the wider stack of non-commodity charges it belongs to, is part of taking real control of your energy costs.

If you are not sure how much of your gas bill is levies and network charges, or how much it is set to rise, our team can break it out and model the impact for you. Get in touch to speak to one of our energy consultants today.