UK non-commodity charge · Taxes and levies · Electricity
Climate Change Levy (electricity)
Latest published rate, who sets it, and where it is forecast to go.
What Climate Change Levy (electricity) is, who sets the rate, what the revenue funds and where it is heading. Rates come from the Purely Energy non-commodity cost data hub; forecasts are our own.
Roughly 5 to 8% of a typical UK business electricity bill
Climate Change Levy (electricity): what it is, who charges it, and what it pays for
What it is
The Climate Change Levy (electricity) charge in plain English
Government tax on energy used by businesses to incentivise energy efficiency. Domestic consumers are exempt. Energy-intensive industries can claim reduced rates via CCAs.
Introduced April 2001 (Finance Act 2000). The gas main rate was raised to equal the electricity rate from 1 April 2024.
Who charges it
The body that sets the rate
HMRC, announced in Budget, usually 2 years ahead
Unit
p/kWh
Applies to
Non-domestic electricity supplies (domestic and charity non-business use are excluded)
What it pays for
Where the revenue ends up
UK climate policy, general taxation revenue (goes to Treasury)
Share of typical bill
5 to 8%
HMRC publishes CCL main rates each Budget. At the 2026/27 rate the levy contributes roughly 5 to 8% of a non-domestic electricity bill before any Climate Change Agreement discount.
Published rate history
| Financial year | Rate | Year on year | Source |
|---|---|---|---|
| 2020/21 | 0.8110p/kWh | - | Published |
| 2021/22 | 0.7750p/kWh | -4.4% | Published |
| 2022/23 | 0.7750p/kWh | 0.0% | Published |
| 2023/24 | 0.7750p/kWh | 0.0% | Published |
| 2024/25 | 0.7750p/kWh | 0.0% | Published |
| 2025/26 | 0.7750p/kWh | 0.0% | Published |
| 2026/27 | 0.8010p/kWh | +3.4% | Published |
| 2027/28 | 0.8270p/kWh | +3.2% | Published |
Forecast trajectory
Forecasts from our non-commodity cost model. P10, P50 and P90 are the 10th, 50th and 90th percentile outcomes; P50 is the central estimate.
| Year | P10 | P50 | P90 | Confidence | Rationale |
|---|---|---|---|---|---|
| 2026-27 | 0.9040 | 0.9520 | 1.000 | high | Based on established HMRC methodology and published forward trajectory |
| 2027-28 | 0.9380 | 0.9980 | 1.058 | high | CPI indexation methodology well-established, inflation forecasts available |
| 2028 | - | 0.8535 | - | - | |
| 2028-29 | 0.9710 | 1.045 | 1.119 | med | Depends on inflation outcomes and potential policy shifts |
| 2029 | - | 0.8808 | - | - | |
| 2029-30 | 1.005 | 1.094 | 1.183 | med | Greater uncertainty from election cycle and policy review potential |
| 2030 | - | 0.9090 | - | - | |
| 2030-31 | 1.040 | 1.145 | 1.250 | med | End of near-term horizon, subject to policy continuity assumptions |
| 2031 | - | 0.8952 | - | - | |
| 2031-32 | 1.063 | 1.203 | 1.343 | low | Speculative estimate dependent on future policy decisions |
| 2032 | - | 0.9131 | - | - | |
| 2032-33 | 1.078 | 1.239 | 1.400 | low | High uncertainty from potential CCL structural reforms |
| 2033 | - | 0.9313 | - | - | |
| 2033-34 | 1.105 | 1.283 | 1.461 | low | Subject to international carbon pricing coordination impacts |
| 2034 | - | 0.9500 | - | - | |
| 2034-35 | 1.135 | 1.335 | 1.535 | low | Maximum uncertainty range due to compounding policy unknowns |
Climate Change Levy (electricity) FAQs
What is the Climate Change Levy (electricity) charge?
Government tax on energy used by businesses to incentivise energy efficiency. Domestic consumers are exempt. Energy-intensive industries can claim reduced rates via CCAs.
Who sets the Climate Change Levy (electricity) rate?
The Climate Change Levy (electricity) rate is set by HMRC, announced in Budget, usually 2 years ahead.
What does Climate Change Levy (electricity) pay for?
Climate Change Levy (electricity) revenue supports UK climate policy, general taxation revenue (goes to Treasury).
What is the latest published Climate Change Levy (electricity) rate?
For 2026/27, the published Climate Change Levy (electricity) rate is 0.8010 p/kWh.
What is the Climate Change Levy (electricity) forecast?
Our latest forecast for 2027 is 0.8270 p/kWh (high confidence). Rate published by the setting body for the next FY.
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Rate data from the Purely Energy non-commodity cost data hub (dh.purelyenergy.co.uk). Published rates come from statutory publications by the body listed above; forecasts are modelled from published guidance and market trends, so treat P50 as a central estimate and use P10/P90 for sensitivity. Primary source