Climate Change Levy rates 2001 to 2027

The short answer

The Climate Change Levy (CCL) main rate is 0.801p per kWh for business electricity and gas from 1 April 2026, rising to 0.827p per kWh from 1 April 2027, as confirmed by HMRC. LPG stays at 2.175p per kg. When CCL started on 1 April 2001, the rates were 0.43p per kWh for electricity and 0.15p per kWh for gas.

Key facts

What the Climate Change Levy is

The Climate Change Levy is a tax on energy supplied to businesses and the public sector in the UK. It was introduced on 1 April 2001 to encourage energy efficiency. Your supplier charges it on your bill, usually as a separate line, and pays it to HMRC.

CCL is charged on four groups of "taxable commodities":

• Electricity, per kWh
• Gas supplied by a gas utility, per kWh
• Liquefied petroleum gas (LPG), per kg
• Any other taxable commodity, per kg. HMRC lists coal, lignite, coke, semi-coke and petroleum coke.

Rates are set at the Budget and usually change on 1 April. HMRC publishes the current and next year's main rates on its CCL rates page. For older rates, HMRC's Environmental Taxes Bulletin carries a historical table from 2001.

VAT is charged on top of CCL. Supplies to households are not subject to CCL, and there are exemptions and reliefs for some business uses, covered below.

Year-by-year main rates, 2001 to 2027

Main rates apply from 1 April at the start of each financial year. Rates are shown in pence; HMRC publishes them in pounds (for example, 0.801p is £0.00801).

Northern Ireland gas was charged at different rates until 1 November 2013 (zero until April 2011, then a lower rate). Since 1 November 2013 it has been charged at the same rate as the rest of the UK.

How the rates have changed

For its first six years, CCL did not change. From 2007 rates rose most years, broadly in line with inflation. Over that period gas was taxed at about a third of the electricity rate per kWh.

The large increase on 1 April 2019 marked a change in policy. Electricity rose from 0.583p to 0.847p per kWh and gas from 0.203p to 0.339p. The government then cut the electricity rate in April 2020 and April 2021 and raised the gas rate every year until April 2024, so the two met at 0.775p per kWh in 2024 to 2025. This removed the lower tax on gas compared with electricity.

LPG has been frozen at 2.175p per kg since April 2019. The 2026 policy paper confirmed it "will continue to be frozen", and the April 2027 rate is unchanged.

Since parity, electricity and gas have moved together. HMRC's April 2026 policy paper said the rates rise in line with RPI so that CCL "keeps pace with inflation". Between 2001 and 2027 the electricity rate has risen from 0.43p to 0.827p per kWh (up 92%), and the gas rate from 0.15p to 0.827p (up 451%).

Reduced rates for Climate Change Agreement holders

Businesses in eligible energy intensive sectors can join a Climate Change Agreement (CCA). In return for meeting energy efficiency or emissions targets, they pay a reduced rate of CCL on the energy used in the facilities covered by the agreement.

HMRC now expresses the reduced rate as a percentage discount on the main rate. For 2026 to 2027 and 2027 to 2028 (pence figures are our calculations from HMRC's main rates and discounts, rounded):

HMRC's historical table of reduced rates (as a percentage of the main rate) begins in 2005:

The current CCA scheme's first target period started on 1 January 2026 for existing sectors, with targets to the end of 2030 and reduced rates available until March 2033 for participants that meet their obligations.

Exemptions, exclusions and de minimis

Some supplies are outside CCL altogether. HMRC's guidance lists:

• Domestic use, including residences, care homes for the elderly and disabled, hospices, children's homes, school and university residential accommodation, self-catering holiday accommodation and some others.
• Charities' non-business use. Business activities such as selling donated goods remain liable. The charity gives its supplier a VAT certificate to claim relief.
• Mixed-use premises. If domestic or charitable non-business use is at least 60% of total use, the whole supply is excluded. Below 60%, CCL applies to the non-qualifying part.
• Certain transport uses, such as electricity for electrified train lines.
• Supplies to electricity producers and producers of other taxable commodities, with specific rules for CHP, small and stand-by generating stations.
• Non-fuel use and metallurgical and mineralogical processes.
• Exports (supplies not used in the UK).

De minimis. Small supplies are treated as domestic use and are not charged CCL:

• Electricity: under 1,000 kWh a month
• Piped gas: under 4,397 kWh a month
• Coal or coke: one tonne or less of domestic-grade fuel
• LPG: cylinders under 50 kg each, or bulk tanks under 2 tonnes

For multi-site businesses

CCL is charged per meter and per supply, so errors repeat across an estate. Points to check:

• Every meter carries the right CCL status. A care home, residential block or charity site in a mixed portfolio may qualify for full or partial exclusion, and a missing certificate means CCL is charged.
• Small meters near the de minimis line. A meter using under 1,000 kWh a month of electricity or under 4,397 kWh a month of gas is treated as domestic use. Check how your supplier applies this to small sites such as kiosks or plant rooms.
• CCA coverage. The reduced rate applies only to the facilities covered by the agreement. Check that each covered meter shows the reduced rate and that uncovered sites are not assumed to be covered.
• Rate changes on 1 April. Bills spanning 1 April should apply the old rate before that date and the new rate after.
• Budgeting. For 2027 to 2028, use 0.827p/kWh for electricity and gas.

Worked example: CCL for a manufacturer in 2027 to 2028

Site: a manufacturing site using 3,000,000 kWh of electricity and 5,000,000 kWh of gas a year. No exemptions apply.

Without a Climate Change Agreement (2027 to 2028 rates):

• Electricity: 3,000,000 kWh × £0.00827 = £24,810
• Gas: 5,000,000 kWh × £0.00827 = £41,350
• Total CCL: £66,160 a year (before VAT)

Compared with 2026 to 2027:

• Electricity: 3,000,000 × £0.00801 = £24,030
• Gas: 5,000,000 × £0.00801 = £40,050
• Total: £64,080, so the April 2027 change adds £2,080 a year

With a Climate Change Agreement covering the whole site (2027 to 2028):

• Electricity: £24,810 × 8% = £1,984.80
• Gas: £41,350 × 11% = £4,548.50
• Total CCL: £6,533.30 a year

The difference between the full rate and the CCA rate is £59,626.70 a year. Joining a CCA depends on sector eligibility and meeting the agreement's targets.

How Business Savings Guru helps

Business Savings Guru is an independent business energy broker for SMEs and larger businesses, with particular expertise in multi-site and more complex procurement, and water and waste alongside. When we review your bills, we check that each meter is charged CCL at the correct rate for the billing period, that CCA reduced rates appear on the meters they should, and that sites with domestic or charitable use have the right certificates in place with the supplier. Where we find an error, we raise it with the supplier. Our commission is clearly disclosed on the energy contract you sign, so you know how BSG is remunerated before you commit.

Frequently asked questions

What is the Climate Change Levy rate for 2026 to 2027? 0.801p per kWh for business electricity and gas, 2.175p per kg for LPG and 6.264p per kg for other taxable commodities, from 1 April 2026.

What is the CCL rate from April 2027? HMRC has confirmed 0.827p per kWh for electricity and gas, 6.468p per kg for other taxable commodities, and 2.175p per kg for LPG (unchanged).

What was the CCL rate in 2019? From 1 April 2019 to 31 March 2020: 0.847p per kWh for electricity, 0.339p per kWh for gas, 2.175p per kg for LPG and 2.653p per kg for other taxable commodities.

Is VAT charged on the Climate Change Levy? Yes. VAT is charged on the total bill, including CCL.

Who does not pay CCL? Domestic users, charities for non-business use, supplies under the de minimis limits and some specific uses such as certain transport and electricity generation. Climate Change Agreement holders pay a reduced rate rather than no CCL.

Why did the gas rate rise so much faster than electricity? From 2019 the government raised the gas rate every year and cut the electricity rate in 2020 and 2021, until both reached 0.775p per kWh in April 2024. The aim was to remove the lower tax on gas.

Sources

All checked 28 October 2026.

• HMRC, Climate Change Levy rates (last updated 27 November 2025): https://www.gov.uk/guidance/climate-change-levy-rates
• HMRC, Environmental Taxes Bulletin: historical rates (updated 31 March 2026): https://www.gov.uk/government/statistics/environmental-taxes-bulletin/environmental-taxes-bulletin-historical-rates
• HMRC, Climate Change Levy: changes to rates from 1 April 2026 (30 October 2024): https://www.gov.uk/government/publications/climate-change-levy-rates-from-1-april-2026/climate-change-levy-changes-to-rates-from-1-april-2026
• HMRC, Exemptions from Climate Change Levy (last updated 4 August 2022): https://www.gov.uk/guidance/exemptions-from-climate-change-levy
• HMRC, Excise Notice CCL1/3: reliefs and special treatments for taxable commodities (updated 24 March 2026): https://www.gov.uk/government/publications/excise-notice-ccl13-climate-change-levy-reliefs-and-special-treatments-for-taxable-commodities
• GOV.UK (DESNZ), Climate Change Agreements: consultation on a new scheme and government response: https://www.gov.uk/government/consultations/climate-change-agreements-consultation-on-a-new-scheme