Look at your last business energy bill and you will probably see a line marked Climate Change Levy, or CCL. It is a UK tax on electricity, gas and some solid fuels used by industrial, commercial, agricultural and public-service sites. Households do not pay it. Suppliers add it to the bill in much the same way as VAT.
From 1st April 2026 the main rates rose with inflation. HMRC's rate table shows electricity and gas at 0.801 pence per kilowatt-hour each today. Both rise again from 1st April 2027, to 0.827 pence per kWh. LPG stays frozen. The Budget 2026 rates annex confirms that path.
What that means in pounds
On a site using 200,000 kWh of electricity a year, the electricity CCL alone is about £1,602 at today's rate, before VAT. That is not the biggest line on most bills, but it is real money, and it often sits in the non-commodity part of the tariff that many fixed contracts still pass through when rates change.
Who can pay less
Energy-intensive sites in a Climate Change Agreement with the Environment Agency pay a sharply reduced rate — currently 8% of the main electricity rate and 11% for gas — in return for meeting efficiency or carbon targets. GOV.UK also lists exemptions and reliefs, including some metallurgical and mineralogical processes, and de minimis rules for very small supplies. Most ordinary commercial sites pay the full main rates.
What to check before April
- Find the CCL line on your latest bill and note the pence-per-kWh figure.
- Check whether your contract passes rate changes through between renewals.
- If you are in a heavy-using sector, ask your trade body whether a Climate Change Agreement is open to you.
If you would like a plain-English look at the levy and the other policy costs on your quote, I am happy to have a quick, no-obligation chat.
- Energy costs
- Climate Change Levy
- UK business
- HMRC
- Government schemes
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