Climate Change Levy rates 2026/27
| Fuel | Main rate from 1 April 2026 | From 1 April 2027 | |---|---|---| | Electricity | 0.801p per kWh | 0.827p per kWh | | Natural gas | 0.801p per kWh | 0.827p per kWh |
CCL is collected by your supplier and shows as a separate line on your bill. Rates rise each April, so a plant's CCL bill grows even if consumption stays flat.
What a Climate Change Agreement saves
A Climate Change Agreement (CCA) is a voluntary deal with the Environment Agency. Your facility agrees energy or carbon targets, and in return pays a reduced CCL rate:
- Electricity: 92% discount, so you pay 8% of the main rate
- Gas: 89% discount, so you pay 11% of the main rate
Worked example: a factory using 5,000,000 kWh of electricity a year pays about £40,000 of CCL at the main rate. With a CCA it pays about £3,200, a saving of roughly £37,000 a year before you count gas.
Who can get a CCA?
CCAs are open to facilities in energy-intensive sectors that have an agreement with government, usually through a trade association. Examples include food and drink, chemicals, plastics, paper, metals, ceramics and packaging. The discount applies to the eligible process, so offices or non-process areas on the same site may still pay full CCL. A sub-metered or well-documented site makes the split easier to claim and defend.
Common CCL mistakes on manufacturing bills
- The CCA discount isn't applied to every meter, or the PP11 supplier certificate is missing or out of date.
- The wrong rate is applied after 1 April, for example last year's rate or the electricity percentage on gas.
- Exempt or excluded supplies are charged, such as electricity from good-quality CHP.
It's worth checking several months of bills against the current rates. Overcharges can often be reclaimed from the supplier.
Frequently asked questions
From 1 April 2026, the main CCL rate is 0.801p per kWh for both electricity and natural gas. It rises to 0.827p per kWh from 1 April 2027.
CCA holders pay 8% of the main CCL rate on electricity and 11% on gas, which are discounts of 92% and 89% respectively.
No. A CCA reduces the Climate Change Levy. The EII exemption (British Industry Supercharger) and BICS remove different policy costs, such as the Renewables Obligation and Capacity Market. A manufacturer can benefit from more than one.
If your supplier charged the wrong rate or didn't apply a valid CCA discount, you can usually ask them to correct and refund past bills. How far back depends on your supplier and contract.