Climate Change Levy rates 2026/27: calculator, exemptions and CCA discounts

The main Climate Change Levy rate for both business electricity and natural gas is 0.801p per kWh from 1 April 2026 to 31 March 2027.

That means a business using 100,000kWh of taxable electricity pays £801 in CCL before VAT. The same taxable quantity of natural gas also produces an £801 levy charge.

The 2026/27 main rates are:

• Electricity: 0.801p/kWh
• Natural gas: 0.801p/kWh
• Liquefied petroleum gas: 2.175p/kg
• Other taxable commodities, including relevant solid fuels: 6.264p/kg

Eligible facilities covered by a Climate Change Agreement do not pay the full rates. The CCA discounts are 92% for electricity, 89% for gas, 77% for LPG and 89% for other taxable commodities. A discount is not the same as a full exemption: the business still pays the remaining percentage of the main rate on qualifying supplies.

Some supplies are excluded or exempt altogether. These include qualifying small-quantity supplies, genuine domestic or non-business charity use and certain specified processes. Relief normally depends on the use of the energy, the facility and the correct certification—not simply on the customer’s business type or the description of its tariff.

This guide gives the current rates, an interactive calculator, worked examples, the de minimis thresholds, CCA rules and the paperwork needed to correct a bill.

Rates and HMRC guidance last reviewed: 7 August 2026. This article provides general information, not tax or legal advice for a particular facility.

Climate Change Levy rates at a glance

Question	2026/27 answer
Electricity main rate	£0.00801/kWh, equal to 0.801p/kWh or £8.01/MWh
Natural gas main rate	£0.00801/kWh, equal to 0.801p/kWh or £8.01/MWh
LPG main rate	£0.02175/kg, equal to 2.175p/kg
Other taxable commodity main rate	£0.06264/kg, equal to 6.264p/kg
CCA electricity discount	92%; the facility pays 8% of the main rate
CCA gas discount	89%; the facility pays 11% of the main rate
CCA LPG discount	77%; the facility pays 23% of the main rate
CCA other taxable commodity discount	89%; the facility pays 11% of the main rate
Small-quantity electricity threshold	No more than 1,000kWh per month at the premises, subject to HMRC’s supply rules
Small-quantity piped-gas threshold	No more than 4,397kWh per month at the premises, subject to HMRC’s supply rules
Is CCL charged on standing charges?	No. The main levy is calculated from taxable energy quantities, not standing-charge days
Is VAT calculated on CCL?	Yes. CCL is included in the value of the supply for VAT where appropriate
Is a green tariff automatically CCL-exempt?	No. Buying renewable-labelled electricity from a utility does not normally remove CCL
Who applies CCL to the bill?	The energy supplier normally charges it and accounts for it to HMRC

HMRC publishes the definitive figures in its Climate Change Levy rates table. The dated rates table should be used where an undated or general summary elsewhere gives an older CCA percentage.

What is the Climate Change Levy?

The Climate Change Levy, usually abbreviated to CCL, is a tax on specified energy commodities supplied to businesses and public-sector organisations.

The main rates commonly affect:

• Commercial and industrial businesses
• Farms and agricultural operations
• Shops, offices and hospitality premises
• Schools, colleges and universities
• Hospitals and other public services
• Charities when energy is used for business activities

For ordinary metered electricity and gas supplies, the supplier normally multiplies the taxable consumption by the rate that applies when the supply is treated as taking place. The levy may appear as a separate invoice line or be incorporated into a quoted rate, depending on the contract and billing presentation.

CCL is not:

• The wholesale energy price
• A network charge
• A supplier margin
• VAT
• A carbon-offset purchase
• The UK Emissions Trading Scheme
• Carbon Price Support for electricity generators

It is a separate tax. Reducing a tariff’s unit rate does not change the statutory CCL rate, although reducing consumption will normally reduce the number of taxable units.

Read our business energy bill guide for a field-by-field explanation of consumption, standing charges, network costs, VAT and metering items.

Main CCL rates for 2026/27

The rates below apply to supplies treated as taking place from 1 April 2026 to 31 March 2027.

Taxable commodity	Statutory main rate	Easier bill-checking format	Cost for a useful quantity
Electricity	£0.00801/kWh	0.801p/kWh	£8.01 per MWh
Natural gas	£0.00801/kWh	0.801p/kWh	£8.01 per MWh
LPG	£0.02175/kg	2.175p/kg	£21.75 per 1,000kg
Any other taxable commodity	£0.06264/kg	6.264p/kg	£62.64 per 1,000kg

“Any other taxable commodity” covers relevant solid fuels within the CCL rules, rather than every material a business might burn. Examples can include coal, lignite, coke and petroleum coke. Oil products subject to the separate hydrocarbon oil duty regime should not simply be placed in this category.

The rate is applied to the taxable quantity. It is not charged as a percentage of the energy price, so a fall in wholesale electricity or gas prices does not automatically reduce the levy per kWh.

Electricity rate

The electricity rate is:

Taxable electricity in kWh × £0.00801

For every:

• 1,000kWh, the main-rate CCL is £8.01
• 10,000kWh, it is £80.10
• 100,000kWh, it is £801
• 1,000,000kWh, it is £8,010

Natural-gas rate

The natural-gas rate is also:

Taxable gas in kWh × £0.00801

Gas invoices may show meter volume in cubic metres as well as billed energy in kWh. CCL is calculated on the billed kWh quantity, not directly on the meter-volume figure.

LPG rate

The LPG rate is:

Taxable LPG in kg × £0.02175

Do not multiply tonnes by the kilogram rate without first converting tonnes to kilograms. One metric tonne is 1,000kg.

Other taxable commodities

The rate for another taxable commodity is:

Taxable quantity in kg × £0.06264

Check the commodity, weight, intended use and any available relief before accepting the charge. A tonne-based delivery document must be converted to kilograms for this calculation.

How the 2026/27 rates changed

Electricity, gas and other taxable-commodity rates rose on 1 April 2026. The LPG rate remained frozen.

Commodity	2025/26 main rate	2026/27 main rate	Change
Electricity	£0.00775/kWh	£0.00801/kWh	About 3.4% higher
Natural gas	£0.00775/kWh	£0.00801/kWh	About 3.4% higher
LPG	£0.02175/kg	£0.02175/kg	No change
Other taxable commodity	£0.06064/kg	£0.06264/kg	About 3.3% higher

HMRC’s policy paper says electricity, gas and solid-fuel rates were increased in line with the Retail Price Index, while LPG remained frozen. The change applies to supplies treated as taking place on or after 1 April 2026. See the official 2026 rate-change policy paper.

Rates already announced for 2027/28

HMRC has also published the main rates from 1 April 2027:

Commodity	Main rate from 1 April 2027
Electricity	£0.00827/kWh
Natural gas	£0.00827/kWh
LPG	£0.02175/kg
Other taxable commodity	£0.06468/kg

These later rates should not be used to check a 2026/27 supply. A bill crossing 1 April may contain two calculation periods and two rates.

How to calculate Climate Change Levy

For electricity or gas at the main rate:

CCL = taxable kWh × £0.00801

For a commodity measured by weight:

CCL = taxable kilograms × the relevant £/kg rate

The important word is taxable. Begin with the billed quantity, then identify any portion that is:

• Automatically excluded under the small-quantity rules
• For qualifying domestic or non-business charity use
• Fully exempt because of its specified use
• Covered by a valid CCA and therefore charged at the reduced rate
• Taxable at the main rate

Do not deduct the CCA discount percentage from the quantity. Apply the remaining percentage to the main rate, or use the effective reduced rate shown later in this guide.

Worked example: small office

A business uses 20,000kWh of electricity and 50,000kWh of gas during 2026/27. Neither supply qualifies for relief.

Commodity	Calculation	CCL
Electricity	20,000 × £0.00801	£160.20
Gas	50,000 × £0.00801	£400.50
Total		£560.70

This figure is before VAT and excludes the tariff unit charges, standing charges and other invoice items.

Worked example: monthly factory bill

A factory’s invoice includes:

• 30,000kWh of taxable electricity
• 80,000kWh of taxable gas

Because both commodities have the same 2026/27 main rate:

(30,000 + 80,000) × £0.00801 = £881.10

The business should nevertheless keep the two fuels separate in its records. Their relief treatment may differ, and future rates do not have to remain identical.

Climate Change Levy calculator for 2026/27

Enter the quantity supplied, the proportion that is fully CCL-free and the share of the remaining taxable quantity covered by a valid CCA. The calculator applies the correct rate separately to each commodity.

2026/27 CCL calculator

Use kWh for electricity and gas, and kilograms for LPG and other taxable commodities. Enter percentages from 0 to 100.

Commodity	Quantity	Fully excluded or exempt	CCA share of remaining quantity
Electricity Main rate: 0.801p/kWh	Electricity quantity in kWh	Electricity excluded or exempt percentage	Electricity CCA percentage of remaining quantity
Natural gas Main rate: 0.801p/kWh	Natural gas quantity in kWh	Natural gas excluded or exempt percentage	Natural gas CCA percentage of remaining quantity
LPG Main rate: 2.175p/kg	LPG quantity in kilograms	LPG excluded or exempt percentage	LPG CCA percentage of remaining quantity
Other taxable commodity Main rate: 6.264p/kg	Other taxable commodity quantity in kilograms	Other commodity excluded or exempt percentage	Other commodity CCA percentage of remaining quantity

Reset calculator

Estimated 2026/27 CCL£0.00

Main-rate comparison on non-exempt use£0.00

CCA saving against that main-rate comparison£0.00

Estimate only. “Fully excluded or exempt” means a proportion on which no main-rate CCL is due under a valid rule. The CCA field applies only to the remaining quantity and requires a certified facility and correct supplier paperwork. VAT is not included.

The calculator is suitable for budgeting and checking arithmetic. It cannot decide whether a process is legally exempt or whether a facility is validly certified under a CCA. Where different parts of the same account have different legal treatments, the underlying allocation should be supported by meters or a fair and reasonable calculation.

How CCL appears on a business energy bill

CCL is commonly shown near the bottom of the charges section, after the energy and standing-charge calculations but before VAT.

An electricity invoice may show:

Invoice item	Example
Taxable consumption	12,500kWh
CCL rate	0.801p/kWh
CCL charge	£100.13

The exact multiplication is:

12,500 × £0.00801 = £100.125

The invoice rounds the charge to the nearest penny. Small one-penny differences can arise if a supplier rounds individual periods or meter registers before adding them together.

CCL is not charged on standing-charge days

The main levy rate is expressed per kWh or kilogram. Therefore, it is not calculated by multiplying the number of billing days by a daily CCL rate.

The standing charge itself can still be subject to VAT, but that does not turn it into CCL-taxable consumption. Keep these two issues separate when checking an invoice.

CCL may be included in a quoted unit rate

Some business quotations state that CCL is excluded and will be added at the statutory rate. Others may present an all-inclusive figure.

Before comparing quotations, ask whether the stated pence-per-kWh figure includes:

• CCL
• VAT
• Network and policy charges
• Metering charges
• Supplier margin
• Any CCA reduction assumed by the supplier

An apparently cheaper tariff can merely be a quotation presented before tax.

CCL on a bill crossing 1 April 2026

A bill covering dates before and after 1 April should allocate the taxable supply between the two rate periods.

For electricity and gas:

• The 2025/26 main rate was £0.00775/kWh.
• The 2026/27 main rate is £0.00801/kWh.

The supplier may use actual readings, validated interval data or an appropriate apportionment where a read is not available on 1 April. Check that the units have not all been placed in the later period without a defensible basis.

Is VAT charged on Climate Change Levy?

Yes. HMRC says the value of the energy supply for VAT purposes includes CCL where appropriate.

For a standard-rated business supply, the simplified order is:

1. Calculate energy and other taxable invoice charges.
2. Add the CCL due.
3. Apply VAT to the resulting VAT-taxable value.

If an invoice contains £1,000 of energy charges and £80.10 of CCL, with no other items:

Item	Calculation	Amount
Energy		£1,000.00
CCL	10,000kWh × £0.00801	£80.10
VAT at 20%	£1,080.10 × 20%	£216.02
Total		£1,296.12

Every £100 of CCL adds £20 of VAT to a standard-rated invoice. A VAT-registered business may be able to recover the VAT as input tax under the normal rules, but it cannot reclaim CCL through its VAT return merely because it is VAT-registered.

Qualifying domestic, charity and small-quantity supplies normally receive reduced-rate VAT treatment and are also excluded from main-rate CCL. The legal tests and certificates still need to be applied correctly. Read our full guide to VAT on business energy and HMRC’s Fuel and power VAT Notice 701/19.

Who pays and who accounts for CCL?

The energy user normally bears the levy as part of its bill. The utility or other liable supplier charges the correct amount and accounts for it to HMRC.

This division matters during a dispute:

• The customer is responsible for giving accurate relief certificates and reviewing its entitlement.
• The supplier is responsible for applying a correctly completed certificate to the right account and charging the correct levy.
• HMRC determines the tax rules and deals with some claims for overpaid levy.
• The Environment Agency administers the CCA scheme across the UK and certifies qualifying facilities.

A broker, consultant or third-party intermediary may help, but it is normally not the licensed energy supplier and cannot by itself change the tax treatment of the supply.

Small-quantity CCL exemption rules

Small quantities of fuel and power may automatically be treated as domestic supplies even when supplied to a business. These are commonly called the de minimis limits.

Commodity or supply	HMRC de minimis limit
Piped gas	Supplied by the same supplier at a rate of not more than 4,397kWh per month to one customer at one premises
Metered electricity	Not exceeding 1,000kWh per month at the premises, including other electricity supplied there to the same person by the same supplier
Unmetered electricity	Not exceeding 1,000kWh per month, including other unmetered electricity from the same supplier
Coal or coke	Not more than one tonne held out for sale as domestic-grade fuel
LPG in cylinders	Any number of cylinders where each is less than 50kg net weight under the CCL rule
Bulk LPG	Premises where the tank’s safe holding capacity is not more than two tonnes

Within these limits, HMRC’s CCL notice says the customer does not need to certify the supply as domestic, although the supplier must keep evidence supporting the treatment.

Electricity threshold example

A small office receives 900kWh of electricity per month from the same supplier at one premises. If the supply meets HMRC’s de minimis conditions, it may automatically be treated as domestic for CCL purposes even though the account is commercial.

At the 2026/27 main rate, avoiding CCL on 900kWh saves:

900 × £0.00801 = £7.21 per month before VAT

If use rises to 1,250kWh per month, the customer should not simply treat the first 1,000kWh as a tax-free allowance. The rule concerns whether the supply is within the de minimis limit; it is not a personal allowance applied to the first block of every larger bill.

Gas threshold example

A small unit receives piped gas at 4,000kWh per month. Subject to the detailed supply conditions, it is within the 4,397kWh monthly limit.

At 4,500kWh per month it is outside that numerical limit. Again, the first 4,397kWh is not automatically a free band with levy only on the excess.

Why annualising the limits can mislead

The electricity figure is sometimes described as 12,000kWh a year and the gas figure as 52,764kWh a year. Those numbers are twelve times the monthly thresholds, but HMRC defines the tests by the rate of supply at the premises.

A business should not assume that an annual total below the multiplied figure proves eligibility regardless of billing periods, changes in supplier or the pattern of consumption. Ask the supplier to apply HMRC’s rules to the actual supply.

A small business is not automatically exempt

Company size, turnover and employee count do not create a general CCL exemption. A microbusiness can use enough energy to pay CCL, while a larger organisation may have an individual low-use supply within the de minimis limits.

The CCL test is based primarily on the commodity, quantity, use and applicable relief—not on whether the customer is described as an SME.

The current thresholds and detailed definitions appear in HMRC’s Excise Notice CCL1/3.

Domestic-use exclusion

Energy genuinely supplied for domestic use is excluded from the main rates of CCL. This can be relevant to commercial organisations that operate or supply residential accommodation.

HMRC’s examples of domestic use include:

• Houses, flats and other dwellings
• Children’s homes
• Homes for elderly or disabled people
• Hospices
• Armed-forces residential accommodation
• Student or pupil residential accommodation
• Self-catering holiday accommodation
• Monasteries, nunneries and similar religious communities
• Community heating schemes

The exclusion follows use rather than the name on the utility account. A company or landlord can therefore receive energy that ultimately has qualifying domestic use.

However, the following are not automatically treated as domestic accommodation:

• Hotels and inns
• Hospitals
• Prisons and similar institutions

Those premises may still have another basis for relief or fall within the de minimis limits, but their function alone does not create the domestic exclusion.

Landlords and onward supplies

Where a landlord receives a utility supply and passes energy to tenants, the presence of an intermediary does not necessarily destroy domestic or charity relief. The landlord must be able to substantiate the final qualifying use and provide the appropriate certificate to the utility.

For a mixed commercial and residential building, use sub-metering where possible. A floor-area estimate may fail to represent energy-intensive commercial kitchens, electric heating, communal areas or different occupation hours.

Charity non-business-use exclusion

A charity can receive CCL-free energy for its non-business activities. Charitable status alone is not enough.

HMRC gives examples of activities that may be business activities, including:

• Selling donated goods
• Hiring out a charity-run building
• Providing membership benefits through a club or association

An activity can be a business activity even where charges merely recover costs and no profit is intended.

Where a charity uses the same account for business and non-business activities, it may need to apportion consumption. It should give the supplier a VAT qualifying-use certificate showing the percentage and keep the supporting calculation.

Schools, colleges and universities are not automatically CCL-exempt. Their treatment depends, among other things, on whether the relevant energy is used by a charity for non-business activities or qualifies under another rule.

Mixed domestic, charity and business use

HMRC applies a 60% rule where a supply is partly for domestic or non-business charity use and partly for another purpose.

Qualifying-use proportion	CCL treatment
At least 60%	The whole supply can be treated as qualifying and is not subject to main-rate CCL
Less than 60%	CCL applies to the non-qualifying portion; the qualifying portion remains excluded

Worked mixed-use example below 60%

A building uses 100,000kWh of electricity. A properly supported analysis shows:

• 45% domestic qualifying use
• 55% commercial use

Because qualifying use is below 60%, CCL applies to 55,000kWh:

55,000 × £0.00801 = £440.55

The qualifying 45,000kWh is excluded.

Worked mixed-use example at 60%

If the supported qualifying-use proportion is 60%, the whole supply can be treated as qualifying under this rule. The resulting main-rate CCL is nil.

This creates a significant boundary. Do not round an unsupported 59.6% estimate to 60% merely to obtain full relief. The certificate must state an exact percentage, and the customer should retain the underlying evidence.

Which supplies can be fully exempt from CCL?

CCL exemptions are specific. They do not create a general discretion for a supplier to waive the levy.

Depending on the detailed conditions and certification, examples include taxable commodities:

• Not intended for burning or consumption in the UK
• Used in certain forms of passenger or freight transport
• Used to produce another taxable commodity or another energy product subject to duty
• Supplied as input fuel to qualifying electricity generation, although Carbon Price Support can apply instead
• Supplied to certain qualifying combined heat and power schemes
• Used for a listed non-fuel purpose
• Used in qualifying mineralogical processes
• Used in qualifying metallurgical processes
• Supplied in certain self or direct renewable-electricity arrangements
• Supplied as LPG or solid fuel solely for resale into non-taxable use

The complete conditions are technical. A business should match its activity to the relevant paragraph of CCL1/3 and complete the correct forms before changing the calculation.

Non-fuel use

Some commodities are used as raw material or feedstock rather than for their heat or power. HMRC lists specified non-fuel uses, including certain chemical and electrochemical processes.

The fact that energy is important to manufacturing does not make it a non-fuel use. Electricity powering an ordinary motor, oven, compressor or lighting system remains energy used as fuel unless another specific relief applies.

From 12 March 2026, HMRC’s updated notice includes specified electricity used in electrolysis to produce hydrogen. The boundary still matters: subsequent compression or other operations do not automatically inherit the electrolysis treatment.

Mineralogical and metallurgical processes

Qualifying mineralogical and metallurgical uses can receive full exemption from the main rates. HMRC’s annex lists the covered processes and accepted associated energy uses.

Examples within the detailed categories include specified glass, ceramic, cement, lime, metal-production and metal-processing activities. A broad description such as “engineering” or “manufacturing” is insufficient. The actual process, facility boundary and energy allocation must qualify.

Where one account supplies both exempt and non-exempt processes, usage must be apportioned on a fair and reasonable basis. Sub-metering is usually stronger evidence than a fixed percentage carried forward without review.

Transport uses

Specified transport uses can qualify, including electricity used to propel trains and certain energy used in qualifying passenger or marine-freight transport. Restrictions apply, including to transport connected with attractions and entertainment.

Ordinary company cars, delivery vans and most road-fleet charging should not be assumed to qualify merely because the energy propels a vehicle.

Electricity generation and CHP

Input fuels for qualifying electricity generation can be exempt from the main rates, but Carbon Price Support may be due. CHP treatment depends on matters including CHPQA certification and Qualifying Power Output.

These rules are intended for generators and CHP operators, not an ordinary business buying grid electricity. Do not apply the CCA calculator to Carbon Price Support liabilities; it is a separate calculation with different units and rules.

Does renewable electricity avoid CCL?

Not usually when it is bought from an energy utility.

A business tariff described as renewable, green, matched with Renewable Energy Guarantees of Origin or backed by power-purchase arrangements can still carry main-rate CCL. Environmental sourcing and CCL liability are separate questions.

The historic exemption for utility-supplied renewable-source electricity was effectively closed to newly generated electricity after 1 August 2015. HMRC’s current notice retains only narrow historic and self/direct-supply provisions.

On-site solar

Electricity generated and consumed behind the meter is not an imported utility supply on which the electricity supplier adds main-rate CCL. Consequently, reducing imported taxable kWh through on-site generation can reduce CCL as well as the energy unit charge.

For example, if a business self-consumes 100,000kWh of solar electricity that would otherwise have been a taxable grid import, the avoided 2026/27 main-rate levy is:

100,000 × £0.00801 = £801 before VAT

The installation, ownership, licensing and supply route can affect tax treatment, especially where a third-party generator sells electricity to the occupier. Read our guide to business solar panels and obtain specialist advice for private-wire or multi-party structures.

Green gas and renewable claims

Buying a tariff carrying renewable-gas certificates or carbon offsets does not by itself change the statutory treatment of the metered gas supply. The commodity and applicable CCL rule still need to be considered.

Our green business energy guide explains the difference between contractual renewable claims, certificates and physical supply.

Climate Change Agreement discounts for 2026/27

A Climate Change Agreement is a voluntary agreement for an eligible energy-intensive industrial facility. In return for meeting energy-efficiency or carbon-saving targets, a certified facility can receive reduced CCL rates.

The discount percentages and effective rates from 1 April 2026 are:

Commodity	CCA discount	Percentage still paid	Effective reduced rate	Saving against main rate
Electricity	92%	8%	£0.0006408/kWh, or 0.06408p/kWh	£0.0073692/kWh
Natural gas	89%	11%	£0.0008811/kWh, or 0.08811p/kWh	£0.0071289/kWh
LPG	77%	23%	£0.0050025/kg, or 0.50025p/kg	£0.0167475/kg
Other taxable commodity	89%	11%	£0.0068904/kg, or 0.68904p/kg	£0.0557496/kg

Suppliers may display statutory rates rounded to a stated number of decimal places. The effective figures above are the exact main rate multiplied by the percentage payable. Check the final invoice multiplication and rounding method.

Why electricity and gas CCA rates are different

Electricity and gas have the same main rate in 2026/27, but their CCA discounts differ:

• Electricity receives a 92% discount, leaving 8% payable.
• Gas receives an 89% discount, leaving 11% payable.

Therefore, the effective gas CCA rate is higher than the effective electricity CCA rate even though both main rates are 0.801p/kWh.

Use the dated HMRC rates table

Some general government summaries still display older 86% figures for gas and solid fuels. HMRC’s dedicated, dated rates table gives the current 2026/27 discount as 89% for both gas and other taxable commodities.

For bill checking, use the current HMRC CCL rates page and retain a copy or screenshot showing the period reviewed.

Worked CCA calculations

Example 1: one million kWh of electricity

A certified facility uses 1,000,000kWh of electricity, all of which is eligible for the CCA rate.

Treatment	Calculation	CCL
Main rate	1,000,000 × £0.00801	£8,010.00
CCA rate	1,000,000 × £0.0006408	£640.80
CCA saving		£7,369.20

If VAT is charged at 20%, the lower levy also reduces the invoice’s VAT by £1,473.84. A business that recovers all input VAT should distinguish that cash-flow difference from the underlying £7,369.20 levy saving.

Example 2: two million kWh of natural gas

A certified facility uses 2,000,000kWh of qualifying gas.

Treatment	Calculation	CCL
Main rate	2,000,000 × £0.00801	£16,020.00
CCA rate	2,000,000 × £0.0008811	£1,762.20
CCA saving		£14,257.80

The gas charge is 11% of the main-rate levy, not 8%.

Example 3: electricity and gas together

A facility has:

• 600,000kWh of CCA-qualifying electricity
• 1,200,000kWh of CCA-qualifying gas

Commodity	Main-rate CCL	CCA-rate CCL	Saving
Electricity	£4,806.00	£384.48	£4,421.52
Gas	£9,612.00	£1,057.32	£8,554.68
Total	£14,418.00	£1,441.80	£12,976.20

This example shows why a combined calculation should preserve the separate fuel discounts.

Example 4: exempt, CCA and main-rate use on one gas account

A site receives 2,000,000kWh of gas. A supported allocation shows:

• 25% is fully exempt
• Of the remaining quantity, 60% relates to a CCA-certified facility
• The balance is taxable at the main rate

The quantities are:

Treatment	Quantity
Fully exempt	500,000kWh
Remaining after exemption	1,500,000kWh
CCA share of remaining use	900,000kWh
Main-rate share	600,000kWh

The levy is:

(900,000 × £0.0008811) + (600,000 × £0.00801) = £5,598.99

Charging the main rate on all non-exempt use would produce £12,015. The valid CCA allocation therefore saves £6,416.01.

This is the same calculation structure used by the embedded calculator.

Who can enter a Climate Change Agreement?

A CCA is aimed at an eligible facility carrying out an eligible energy-intensive process. High energy use alone does not establish eligibility.

Government’s April 2026 contact list says 54 business sectors participate. They include a range of manufacturing, processing and intensive agricultural activities, each represented through a sector association.

Eligibility depends on matters including:

• The actual process carried out
• Whether it falls within an eligible-facility definition and umbrella agreement
• The identity of the facility operator
• The physical boundary of the facility
• The allocation of eligible and non-eligible energy
• Continuing compliance with the scheme rules

A warehouse, office or retail business cannot enter merely because its electricity bill is large. Conversely, an eligible process can form only part of a wider site, requiring careful boundary and metering work.

The first practical step is to check the current CCA sector contact list and speak to the relevant sector association.

The CCA 70% rule

Under the 2026 statutory guidance, an installation or site is taken to be an eligible facility only if at least 70% of the reckonable energy supplied to the facility is intended for the qualifying installation, installations or parts of installations.

Important points include:

• Eligibility must be maintained, not only demonstrated on the application date.
• Operators confirm annually that the facility continues to meet the rule.
• Permanent sub-metering can be required where the eligible process uses less than 70% of site energy and the operator defines a narrower facility.
• Additional activities within the facility boundary must be treated under the detailed 70:30 methodology.
• UK ETS energy is included when assessing the 70% rule but excluded from CCA targets; it must still be reported.

This is a facility-boundary rule, not permission to claim a 70% discount on every site. The actual PP10 and PP11 relief calculation must reflect the energy treatment for the relevant supply.

Read the Environment Agency’s current CCA statutory guidance for 2026.

CCA timetable for the 2026–2030 scheme

The new scheme began on 1 January 2026 and contains three target periods.

Target period	Performance period	Reporting deadline
TP7	1 January to 31 December 2026	1 May 2027
TP8	1 January 2027 to 31 December 2028	1 May 2029
TP9	1 January 2029 to 31 December 2030	1 May 2031

The 2026 statutory guidance provides for administration through 31 March 2033, allowing reduced-rate certification to continue after the final target period subject to the rules.

Existing obligations from the previous scheme remain live where applicable. In particular, the statutory guidance says Certification Period 7 under the previous phase was extended to 30 June 2027. Operators should follow the certification applying to their facility and period rather than assuming that the change of scheme created a gap or an automatic new entitlement.

New entrant window

For existing umbrella agreements, new entrants can apply between 1 January and 31 August in each year from 2026 to 2029. The Administrator must determine eligibility and add the facility before 1 January 2030.

An application is normally made through the relevant sector association using the CCA digital service. Joining late does not necessarily reset all performance expectations to zero; targets depend on the scheme rules and applicable base year.

Performance targets and buy-out

The tax discount comes with continuing obligations. Operators report performance against energy-efficiency or carbon targets and submit annual performance information.

Where a target is missed, the operator may be able to pay a buy-out fee for the shortfall and retain certification for the next period. Failure to pay can lead to decertification. HMRC may seek repayment where relief was claimed without valid certification.

The Environment Agency can carry out desktop and full-site audits of both performance and eligibility. A CCA should therefore be treated as a managed compliance programme, not a one-off form sent to the supplier.

The official operational overview is available in Managing a Climate Change Agreement.

Does a CCA cover every unit at the site?

Not automatically.

For the reduced rate to apply, HMRC says both of the following must be true:

• The commodity is supplied to a facility certified by the Environment Agency as covered by a CCA.
• The supply takes place during the period specified in the certification.

A site can include:

• Energy inside the certified facility
• Energy outside the facility boundary
• Energy used for a separately exempt process
• Tenant consumption
• Shared services
• Electricity or fuel with a different tax treatment

The relief percentage on the PP11 should reflect the supported allocation. Claiming the CCA rate on 100% of an account merely because one production line qualifies can create an underpayment and a later self-supply liability.

PP10 and PP11 forms explained

Most customers claiming a CCL exemption or reduced rate use two connected forms.

Form	Sent to	Purpose
PP10 supporting analysis	HMRC	Records the relief analysis and calculates the percentage to place on the supplier certificate
PP11 supplier certificate	Energy supplier	Tells the supplier what percentage relief to apply to a specified commodity and account

Use HMRC’s current PP10 supporting-analysis form and PP11 supplier-certificate form.

PP10 supporting analysis

The PP10 brings together the quantities or percentages that receive different reliefs. The resulting overall relief percentage is transferred to the PP11.

Prepare the evidence before starting, including:

1. Account and meter identifiers
2. Commodity and supply period
3. CCA facility identifiers and certification dates
4. Metered eligible and non-eligible use
5. Calculations for exempt processes
6. Mixed-use allocation
7. Forecast use where actual data is unavailable
8. Any landlord or onward-supply arrangement

Use sub-metering where possible. If estimation is necessary, the method should be fair, reasonable and capable of later review against actual data.

PP11 supplier certificate

The supplier must receive the PP11 before administering relief. A separate PP11 is required for each taxable commodity.

HMRC says a supplier must process a correctly completed PP11 within five working days of receipt. Keep evidence of delivery, especially if sending it by post. Suppliers must accept paper certificates; electronic acceptance is at their discretion.

Do not send a PP11 to claim the 5% VAT rate. Domestic and charity qualifying use generally relies on a VAT certificate, even though that treatment can also exclude CCL.

Review dates and five-year maximum

The customer must review its PP11 no later than the earlier of:

• The 60th day after the anniversary of delivery to the supplier; or
• The 60th day after the last commodity covered by the certificate has been consumed.

A correct PP11 can remain valid for no more than five years. A change in use, facility, account, supplier or relief percentage can require action sooner.

Change of supplier

Relief does not simply follow the meter to a new supplier. HMRC requires an updated PP10 to HMRC and a PP11 to the new supplier.

Make this part of every business-energy switch checklist. Otherwise, the first invoices under a new contract can revert to the main rate even though the facility remains CCA-certified.

Change of ownership

The previous operator’s tax position does not transfer automatically to the buyer. HMRC says the new business owner must complete and submit its own PP10 and PP11, even if consumption and processes are unchanged.

CCA agreement changes also need to be handled through the sector association and Environment Agency. Contract completion, supplier account opening and CCA variation should be coordinated rather than treated as separate projects.

Can a business recover overpaid CCL?

Potentially, but the route depends on whether a certificate was already in place.

No PP10 or PP11 was in place

Where the business was entitled to relief but administrative oversight meant there was no PP10 and PP11, HMRC allows retrospective forms seeking forgone relief for up to four years.

Examples include:

• Failing to notify a new supplier
• A new owner failing to establish the relief paperwork
• Another administrative omission that prevented the supplier knowing about the entitlement

This route does not apply to domestic or non-business charity supplies. Those use a retrospective VAT reduced-rate certificate with the supplier.

A PP11 was in place but claimed too little

Where an existing PP11 understated the relief percentage, the business can claim the difference from HMRC using form CCL200X.

HMRC expects evidence such as:

• The PP10 and PP11 covering the claim period
• Energy invoices
• A month-by-month calculation of the repayment
• Relevant CCA or CHPQA documentation
• Correspondence with the supplier
• Authority for an agent, where applicable

Do not submit a retrospective PP11 to rewrite a period where a certificate was already in place; use the route HMRC specifies for that scenario.

Too much relief was claimed

If a review shows that the relief percentage was too high, the excess is treated as a taxable self-supply. The business may need to notify HMRC and register for CCL; unlike VAT, there is no general registration threshold for that liability.

This is why a “generous” estimate is not harmless. It can create tax, interest, penalty and administrative exposure even where the supplier accepted the certificate in good faith.

CCL record-keeping requirements

HMRC requires CCL records to be kept for six years. A customer paying a reduced rate or no levy should retain:

• PP10 supporting analyses
• PP11 supplier certificates
• VAT qualifying-use certificates
• CCL declarations
• Energy invoices and credit notes
• Meter readings and interval data
• Sub-meter reports
• Facility-boundary plans
• CCA agreements and certification evidence
• Calculations allocating qualifying and non-qualifying use
• Evidence of when forms were sent and received
• Annual reviews and corrections

Electronic records are acceptable, but the business must be able to produce them for HMRC. See the official CCL record-keeping guidance.

How to check CCL on an energy invoice

Use the following process for each commodity and account.

1. Confirm the supply and period

Match the invoice to the correct:

• Legal customer
• Premises
• MPAN for electricity or MPRN for gas
• Meter serial number
• Billing dates
• Supplier account

A valid relief certificate sent for one account should not be assumed to cover another.

2. Recalculate consumption

Check opening and closing readings, multipliers and any estimated quantities. For half-hourly electricity, compare billed consumption with the validated interval total where available.

If a bill has been cancelled and reissued, make sure consumption has not been duplicated.

3. Split the rate period

For a supply crossing 1 April 2026, identify the kWh or kilograms allocated to:

• The period up to 31 March 2026
• The period from 1 April 2026

Apply the appropriate statutory rate to each portion.

4. Establish the treatment

For each portion, identify whether it is:

• Automatically within the de minimis rules
• Excluded for domestic or non-business charity use
• Fully exempt under a specified use
• CCA-eligible at the reduced rate
• Taxable at the main rate

Do not use the word “exempt” as shorthand for a CCA discount.

5. Check the certificate percentage

Compare the supplier’s bill with the current PP11 or VAT certificate. Confirm:

• The commodity matches
• The account and premises match
• The supplier received it
• The claimed percentage matches the PP10
• The certificate remains within its valid period
• No material operational change has made it inaccurate

6. Multiply and round

Recalculate the levy using pounds, not pence:

0.801p = £0.00801

Multiplying kWh by 0.801 without dividing by 100 overstates the charge one hundredfold.

7. Check VAT afterwards

Once the CCL is correct, verify the VAT calculation. Removing £500 of incorrectly charged CCL from a standard-rated invoice should ordinarily reduce VAT by another £100, subject to the other invoice items and rounding.

8. Trace corrections and credits

Where the supplier agrees there is an error, ask for:

• A cancelled invoice or itemised credit note
• A replacement calculation by period
• Confirmation of the relief percentage now held
• The effective date of the correction
• The treatment of VAT
• An updated account balance

Do not accept a single unexplained goodwill credit in place of a tax correction if it leaves the underlying account configuration wrong.

Worked invoice error example

A CCA-certified electricity facility uses 250,000kWh in one quarter. The supplier charges the 2026/27 main rate because a PP11 was not loaded onto the new account.

Item	Amount
CCL charged at main rate	250,000 × £0.00801 = £2,002.50
Correct CCA-rate CCL	250,000 × £0.0006408 = £160.20
CCL overcharge	£1,842.30
Associated VAT at 20%	£368.46
Invoice cash difference	£2,210.76

If no PP10 or PP11 was in place, the business should assess the retrospective-certificate route. If a valid PP11 already existed but understated or failed to deliver the relief correctly, the appropriate supplier/HMRC correction route depends on the facts.

What to do if the supplier charged the wrong CCL

Contact the supplier’s business billing or tax team with:

• Invoice numbers
• Account and meter identifiers
• The affected dates and quantities
• The statutory rate used and the rate that should apply
• Copies of PP10, PP11 or VAT certificates
• Proof of the certificate’s delivery
• CCA certification details where relevant
• Your calculation of CCL and VAT
• The credit or rebill requested

Ask the supplier to log a formal complaint if it does not correct a clear error promptly. Eligible small businesses may have access to the Energy Ombudsman after the applicable complaint period or a deadlock letter, but the Ombudsman does not replace HMRC’s statutory tax-credit process.

Where the disagreement concerns legal entitlement rather than a supplier’s arithmetic, take specialist tax advice or contact HMRC. A supplier cannot create a relief that the legislation does not provide.

CCL compared with VAT, CCA, CPS and UK ETS

These terms are related to energy and carbon but perform different functions.

Term	What it is	Who normally deals with it	Key distinction
Climate Change Levy main rate	Tax on specified business energy supplies	Supplier charges the customer and accounts to HMRC	Based on taxable quantity
VAT	General consumption tax	Supplier charges it; VAT-registered customer may reclaim subject to normal rules	VAT value includes CCL where appropriate
Climate Change Agreement	Voluntary efficiency or carbon-target agreement	Facility, sector association and Environment Agency	Provides reduced CCL rates, not a full blanket exemption
Carbon Price Support	Additional CCL rate connected with fossil fuel used to generate electricity	Generators and qualifying CHP operators	Different rates, units and liability from an ordinary customer’s main-rate CCL
UK Emissions Trading Scheme	Cap-and-trade carbon-pricing scheme	Covered installations and regulators	Not an energy-bill line calculated at 0.801p/kWh
Renewable certificate or offset	Evidence or contractual environmental instrument	Generator, supplier, buyer or registry	Does not automatically remove statutory CCL

Do not combine these into one generic “green tax” line when auditing costs. Each has its own legal basis and evidence.

How to reduce Climate Change Levy legally

Reduce taxable energy consumption

Every taxable electricity or gas kWh avoided during 2026/27 saves 0.801p of CCL before VAT.

Examples include:

• Improving controls and operating schedules
• Repairing compressed-air leaks
• Optimising refrigeration
• Upgrading motors and drives
• Reducing unnecessary heating and cooling
• Improving insulation
• Switching off idle equipment
• Monitoring out-of-hours baseload

At the main rate, saving 500,000kWh reduces CCL by £4,005 in addition to the tariff saving.

Check low-use supplies separately

A multi-site business may have small satellite supplies within the de minimis limits even though its total corporate consumption is large. Review each premises and supplier relationship under HMRC’s rules.

Claim genuine domestic or charity use

Landlords, care providers, charities and mixed-use organisations should identify qualifying use and give the correct certificate. A historical account label such as “commercial” does not settle the underlying use.

Map fully exempt processes

Manufacturers should compare actual processes against HMRC’s non-fuel, mineralogical and metallurgical rules. Meter exempt and non-exempt loads where practical and review the allocation when production changes.

Assess CCA eligibility

An eligible energy-intensive facility can make substantial savings, but should compare:

• Expected levy reduction
• Sector-association fees
• Metering and consultancy costs
• Reporting and audit work
• Required energy-efficiency investment
• Potential buy-out fees
• Risk of eligibility or data errors

The largest headline discount is not automatically the net commercial benefit.

Generate and use electricity on site

Behind-the-meter solar and other suitable generation can reduce taxable imported electricity. The business should model self-consumption, finance, maintenance and tax treatment rather than valuing CCL savings in isolation.

Keep relief active during changes

Many avoidable overpayments arise after:

• Switching supplier
• Opening a new account
• Moving premises
• Changing legal entity
• Buying a facility
• Reorganising a site
• Replacing meters

Include tax certificates in the change-management plan rather than discovering the omission several invoices later.

Common Climate Change Levy mistakes

Using the wrong unit

Electricity and gas use kWh. LPG and other taxable commodities use kilograms. Applying a kWh rate to LPG or a kilogram rate to gas produces a meaningless result.

Confusing pence and pounds

The electricity rate is 0.801p/kWh but £0.00801/kWh. Both are the same figure expressed differently.

Charging the 2025/26 rate after 1 April 2026

The main electricity and gas rate changed from £0.00775 to £0.00801 per kWh. Check billing-system updates and rebills.

Treating the de minimis threshold as a free block

The small-quantity rule does not normally mean the first 1,000kWh of every larger electricity bill is CCL-free.

Assuming all charities are exempt

The charity exclusion concerns non-business use. A charity can have taxable business activities.

Assuming a hotel is domestic

HMRC expressly distinguishes hotels and inns from qualifying residential accommodation, subject to other possible reliefs.

Calling a CCA a 92% exemption from the bill

The 92% electricity figure applies to the CCL main rate, not to the entire electricity invoice. It does not discount wholesale energy, standing charges or network costs.

Applying the electricity CCA percentage to gas

Gas receives an 89% discount in 2026/27 and pays 11% of the main rate. Electricity receives 92% and pays 8%.

Using an obsolete 86% gas discount

Some general summaries still show historic percentages. The dated HMRC table gives 89% for gas and other taxable commodities from 1 April 2026.

Assuming renewable-labelled grid energy is levy-free

The source claim on a utility tariff does not normally remove CCL.

Failing to renew or review certificates

A PP11 needs annual review and has a five-year maximum life. Supplier, owner and use changes can require earlier replacement.

Claiming on an entire account because one process qualifies

Shared supplies often need an evidence-based allocation. The exemption or CCA treatment follows the qualifying use and facility.

Forgetting VAT on the correction

An overcharged CCL amount can also have increased the VAT charged on the invoice.

Climate Change Levy audit checklist

For each electricity, gas and fuel account, record:

1. Supplier and account number
2. Premises and meter identifier
3. Commodity and billing unit
4. Annual and monthly consumption
5. Main-rate, CCA-rate or exempt treatment
6. Applicable rate period
7. De minimis assessment
8. Domestic or charity qualifying-use percentage
9. Exempt-process percentage and evidence
10. CCA facility and certification period
11. PP10 date and relief calculation
12. PP11 date, percentage and proof of delivery
13. VAT certificate where relevant
14. Last annual review date
15. Ownership or supplier changes
16. CCL billed, expected and difference
17. VAT effect of any difference
18. Corrective action and claim deadline

Review high-consumption accounts first because small rate errors multiply quickly. Then check low-use sites for missed de minimis treatment.

Frequently asked questions

Final CCL checking checklist

Before approving an energy invoice or relief claim, confirm:

1. The supply dates use the correct tax-year rate.
2. Electricity and gas are calculated in kWh.
3. LPG and other taxable commodities are calculated in kilograms.
4. The billed quantity agrees with meter or delivery records.
5. Pence and pounds have not been confused.
6. No CCL has been calculated on standing-charge days.
7. The de minimis test has been applied to the actual supply rather than as a free block.
8. Domestic and charity percentages are supported and certified.
9. Fully exempt uses match a specific HMRC rule.
10. CCA supplies relate to a certified facility and certification period.
11. Electricity, gas, LPG and solid-fuel CCA percentages are not mixed up.
12. The PP10 calculation agrees with the PP11.
13. The supplier received and processed the correct PP11.
14. Certificate reviews and five-year replacement dates are diarised.
15. Supplier and ownership changes have triggered fresh paperwork where required.
16. VAT has been recalculated after any CCL adjustment.
17. Records and calculations will be retained for six years.

Final verdict

From 1 April 2026, the main Climate Change Levy rate is 0.801p/kWh for both electricity and natural gas. LPG remains at 2.175p/kg, while other taxable commodities rise to 6.264p/kg.

For most businesses, checking CCL is a straightforward multiplication once the taxable quantity is known. The difficult part is establishing that quantity correctly.

Low-use supplies can fall within HMRC’s de minimis rules. Domestic and non-business charity use can be excluded, with a full-supply rule where qualifying use reaches 60%. Specified processes can be fully exempt. Eligible CCA facilities receive substantial discounts, but still pay 8% of the electricity main rate, 11% for gas, 23% for LPG and 11% for other taxable commodities.

The strongest approach is to document every account’s use, facility boundary, certificates and review dates. Recalculate the levy from the underlying units, then check VAT. This identifies both billing errors and legitimate relief before an incorrect percentage becomes a multi-year liability.