---
title: What Is the Climate Levy and How Does It Affect Your Business Energy Bill?
description: Understand the Climate Change Levy and its impact on your business energy costs. Learn how to reduce your CCL charges and find exemptions.
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---

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 Jul 21, 2025, 6:00:00 AM

# What Is the Climate Levy and How Does It Affect Your Business Energy Bill?

![Picture of Sarah](https://utilitiesgroup.co.uk/hs-fs/hubfs/IMG_3971.jpg?width=50&name=IMG_3971.jpg) [Sarah](https://utilitiesgroup.co.uk/blog/author/sarah)

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If you're a UK business owner, you've likely noticed a line on your energy bill called the **Climate Change Levy (CCL)**—but what exactly is it? More importantly, how much is it costing you, and can you reduce or avoid it?

In this quick guide, we’ll break down what the Climate Change Levy is, why it exists, and how it affects your business energy costs.

---

## 💡 What Is the Climate Change Levy (CCL)?

The **Climate Change Levy** is an environmental tax charged on the energy used by businesses and public sector organisations in the UK. It was introduced in **2001** to encourage businesses to use **less energy and reduce carbon emissions**.

It applies to:

- **Electricity**
- **Gas**
- **Solid fuels** (e.g. coal, coke)

The levy is **charged per kilowatt hour (kWh)** of energy used and is added directly to your business energy bill.

---

## 📈 How Much Is the Climate Levy in 2025?

As of **April 2025**, the rates are:

| Fuel Type | Rate per kWh |
| --- | --- |
| Electricity | £0.0086 |
| Natural Gas | £0.0033 |
| Solid Fuels | £0.0043 |

 

> *(Rates are subject to annual changes—updated each April by HMRC)*

These charges are **in addition to** your standard energy rates, so they can have a **noticeable impact on your bill**, especially for energy-intensive businesses.

---

## ✅ Who Has to Pay the CCL?

You’ll pay the CCL if you:

- Use more energy than a typical domestic customer
- Are a business, charity, or public sector organisation
- Operate in the UK mainland (excludes Northern Ireland)

---

## ❌ Who’s Exempt from the Climate Change Levy?

Some businesses may be **fully or partially exempt**, including:

### 1. **Charities Using Energy for Non-Business Purposes**

Registered charities not engaged in commercial activities may qualify.

### 2. **Businesses With a Climate Change Agreement (CCA)**

If your business signs a **CCA** with the Environment Agency, you can get up to **90% relief on CCL for electricity** and **65% for gas**, in exchange for committing to improve energy efficiency.

### 3. **Low or Domestic-Rate Users**

If your site uses energy similarly to a household (e.g., very small usage), you may not be charged.

---

## 📉 Can I Reduce My CCL Charges?

Yes—here’s how:

- **Enter into a Climate Change Agreement (CCA)** if you're in an eligible sector (e.g., manufacturing, food processing, chemicals).
- **Improve energy efficiency**: use LED lighting, smart controls, and energy-saving equipment to reduce your overall usage.
- **Switch to a renewable supplier**: While this doesn't exempt you from CCL, some brokers (like us) can help you get **green energy deals** that support net-zero goals.

---

## 🔍 How to Find CCL on Your Business Energy Bill

Look for terms like:

- **“Climate Change Levy”**
- **“Environmental Charges”**
- **“CCL (Electricity)” and “CCL (Gas)”**

It will typically appear as a separate charge near your unit rates or totals.

---

## 🧾 Example Breakdown

Let’s say your business uses 50,000 kWh of electricity annually.

CCL cost = 50,000 × £0.0086 = **£430/year**

For larger usage, this can run into **thousands of pounds annually**.

---

## 🤝 How The Utilities Group Can Help

At **The Utilities Group**, we help businesses:

- Understand and **reduce their CCL liabilities**
- Identify eligibility for exemptions or CCAs
- Find **greener, lower-cost energy contracts**
- Access ongoing support to manage bills and avoid overcharges

---

## 📞 Want to Cut Your Energy Bill?

Our expert brokers compare quotes from 15+ suppliers to help you switch easily—and handle everything from contracts to meter reads.

👉 **Get a free quote today** or call us on **01515416767** to find out how much your business could save.

---

**The Utilities Group — Switching Made Simple.**

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