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Climate change levy meaning

What does Climate change levy mean?
The climate change levy (CCL) is a UK tax charged on the supply of energy (principally electricity, natural gas, liquefied petroleum gas and certain solid fuels) to business and public sector customers, used in practice to price energy consumption and incentivise efficiency. It is a statutory levy created by the Finance Act 2000 and related regulations. Energy suppliers add CCL to bills for taxable supplies at the time of supply and account for it to HMRC. Key features include main rates set annually by government and a separate Carbon Price Support (CPS) regime for fuels used to generate electricity in Great Britain. Domestic use and charity non‑business use are outside scope. Reliefs and exemptions apply for specified uses (for example, certain non‑fuel uses, good‑quality combined heat and power, and qualifying metallurgical and mineralogical processes). Energy‑intensive businesses with Climate Change Agreements benefit from reduced CCL rates. Customers must give supplier certificates to claim reliefs and keep records; HMRC can assess underpaid levy and impose penalties. The CCL applies across England & Wales, Scotland and Northern Ireland (CPS does not apply in Northern Ireland). There is no equivalent levy in Ireland; comparable obligations arise under Irish carbon tax and other energy taxes.
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NEWS
Weekly energy law update: security package, market codes, renewables, LDES, hydrogen/CCUS, nuclear reforms, planning rights and climate levy—key consultations, statutory instruments and practitioner deadlines

In this issue: Key developments and materials Electricity and gas market regulation, licensing and taxation Renewable energy Capacity Market, balancing services and energy system flexibility Hydrogen, CCUS and emerging technologies Nuclear energy Planning issues in energy projects Air emissions, efficiency, and climate change New and updated content Dates for your diary Trackers Energy resources on Lexis+® Daily and weekly news alerts Key developments and materials DESNZ announces accelerated measures to boost UK energy security DESNZ has unveiled a suite of actions to reinforce and speed up the UK’s energy security in light of events in the Middle East. For the first time, ‘plug-in solar’ will be permitted in the UK. The department plans to advance the next annual renewables auction to July 2026 and has confirmed that the government will adopt the Fingleton Review’s recommendations to hasten delivery of nuclear power stations. It has also moved to safeguard consumers, working...

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NEWS
Local government law update—12 June 2025: Supreme Court ruling on Equality Act sex, planning reforms, Vagrancy Act repeal, NHS procurement slavery regulations, education AI guidance, Sizewell C funding

In this issue: Governance Planning Social housing Children’s social care Social care Healthcare Education Environmental law and climate change Local government finance Daily and weekly news alerts New and updated content Governance Equality Act 2010 provisions refer to biological sex, regardless of gender recognition certificate (For Women Scotland v Scottish Ministers) The Supreme Court ruled that, within the Equality Act 2010 (EqA 2010), the words ‘man’, ‘woman’ and ‘sex’ denote biological sex. Treating the relevant provisions as embracing ‘certificated sex’ by virtue of a gender recognition certificate (GRC) would render them incoherent and unworkable, and thus cannot be done. For sex discrimination claims, an individual has the protected characteristic of biological sex only. The relevant parts of the EqA 2010 fall within section 9(3) of the Gender Recognition Act 2004 (GRA 2004), and so displace the section 9(1) rule that a person with a GRC is, for all purposes, of the acquired...

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NEWS
UK energy law weekly update: Spring Statement, Ofgem £4bn transmission APM, CHMM guidance, CCL relief for green hydrogen, maritime decarbonisation, heavy-duty vehicle CO2 rules, EU consultations (27 March 2025)

In this issue: Key developments and materials Electricity and gas market regulation and licensing Networks and network connections Renewable energy Air emissions, efficiency, and climate change International energy Daily and weekly news alerts New and updated content Dates for your diary Trackers Latest Q&A Key developments and materials Spring Statement 2025—Key Energy announcements Delivered to Parliament on 26 March 2025, the Spring Statement 2025 saw the Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP, set out economic projections alongside refreshed tax and public spending plans, following the Autumn Budget 2024. For a recap of the principal Autumn Budget 2024 measures affecting energy and environmental policy, see LNB News 30/10/2024 68. Although the Spring Statement 2025 contained only limited energy‑specific changes, we highlight the principal announcements relevant to the sector...

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PRACTICE NOTES
UKCS offshore petroleum licensing regime: NSTA powers, licence types, application and transfer procedures, levies, environmental assessments and net zero reforms

Oil & Gas—UKCS licensing regime Regulatory body Up to 2016, oversight of the UK’s oil and gas resources chiefly sat with the Department of Energy and Climate Change (DECC), acting for the Secretary of State. Following Sir Ian Wood’s review of UK Continental Shelf (UKCS) oil and gas recovery (the Wood Review), government created an independent regulator—now the North Sea Transition Authority (NSTA)—to assume DECC’s licensing and regulatory duties in respect of all oil and gas exploration and production activities on the UKCS. This restructuring transferred responsibility for those matters from DECC to the new body. Until 21 March 2022 the NSTA operated under the name Oil and Gas Authority (OGA), which remains the company’s formal legal name and continues to appear in some legislation. The NSTA began taking on these roles from DECC on 1 April 2015, at first as an executive agency within DECC. The Energy Act 2016 subsequently established the NSTA as a fully independent regulator, constituted as an independent Government company, and amended the...

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PRACTICE NOTES
CRC Energy Efficiency Scheme (UK): qualification, reporting, allowances, penalties, administration, phases, and 2019 abolition of the emissions trading scheme [Archived]

ARCHIVED: This archived Practice Note explains what the CRC Energy Efficiency Scheme was and how it operated. It also highlights principal elements of the CRC Scheme, including: Eligibility thresholds Enrolment obligations Reporting duties How allowances were purchased and surrendered Sanctions for non-compliance It is not maintained and is provided for background reference only. The CRC Scheme was abolished after the 2018/19 compliance year, following the announcement by HM Treasury (HMT) in the 2016 Budget. The CRC Energy Efficiency Scheme (Revocation and Savings) Order 2018, SI 2018/841 (the 2018 Order), effective from 1 October 2018, terminated the CRC Scheme with effect from 31 March 2019, while preserving continuing compliance obligations for the phase ending on that date (and the preceding phase). Businesses were required to surrender CRC Scheme allowances for the final time in October 2019. The CRC Scheme has been replaced by an increase in the climate change levy to streamline the business energy efficiency...

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PRACTICE NOTES
England and Wales 2025 environmental taxes, reliefs and incentives—legislation and consultations tracker [Archived]

ARCHIVED: This Practice Note has been archived and is not maintained This tracker tool outlines and condenses significant new and forthcoming laws and consultations across England and Wales relating to environmental taxes, reliefs and incentives. HM Treasury defines an environmental tax as one that satisfies these three principles: it is expressly linked to the government's environmental aims the primary purpose is to encourage environmentally positive behaviour change its structure reflects environmental objectives—for example, the more polluting the activity, the higher the tax imposed The following environmental taxes apply in England and Wales: landfill tax: payable on waste disposals at licensed landfill sites and on certain prescribed landfill activities climate change levy (CCL): a mandatory charge on UK business energy use, applied at the time of supply as taxable supplies. The climate change agreement (CCA) scheme allows eligible facilities a reduced rate (discount) on the CCL aggregates levy: an environmental tax administered by HMRC on the...

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