The main Climate Change Levy rates from 1 April 2026 are £0.00801 per kWh for electricity and natural gas, £0.02175 per kg for LPG and £0.06264 per kg for solid fuels. Businesses in a Climate Change Agreement pay reduced rates, such as 8% of the main electricity rate. The rates rise again on 1 April 2027.
TL;DR:
- Monthly supplies below 1,000 kWh of electricity, 4,397 kWh of piped gas, or 1 tonne of domestic coal or coke may escape the levy.
- For covered sites, Climate Change Agreement rates are 11% for natural gas and solid fuels and 23% for LPG; check eligibility and buyout costs.
- The exemption covers electricity used for electrolysis and natural gas used as a carbon dioxide source for sodium bicarbonate, but businesses must notify suppliers and HMRC.
- Reconcile each invoice’s fuel, rate, and billed volume against meter data monthly, and assign one person to track exemptions, supplier notices, and audit records.
Table of Contents
- What are the climate change levy rates by fuel from 1 April 2026?
- Who pays the levy, and how does it show up on your bill?
- How do Climate Change Agreements reduce what you pay?
- Which exemptions apply, and what changed for hydrogen and sodium bicarbonate?
- What should finance and facilities teams do next?
- Why does predictable energy data matter more than the rate itself?
- Where should you start with validating your levy charges?
- FAQ
- Sources
What are the climate change levy rates by fuel from 1 April 2026?
GOV.UK publishes the official figures, and the table below sets the 2026 main rates beside the 2027 preview. Electricity and natural gas share one rate. LPG stays frozen, while solid fuels move up.
| Fuel | Main rate from 1 April 2026 | Main rate from 1 April 2027 |
|---|---|---|
| Electricity | £0.00801 per kWh | £0.00801 per kWh |
| Natural gas | £0.00801 per kWh | £0.00801 per kWh |
| LPG | £0.02175 per kg | £0.02175 per kg (frozen) |
| Solid fuels | £0.06264 per kg | £0.06264 per kg |
Climate Change Agreement participants pay a fraction of those main rates. These are the percentages and the effective unit rates GOV.UK gives:
- Electricity: 8% of the main rate, an effective £0.0006408 per kWh.
- Natural gas: 11% of the main rate, an effective £0.0008811 per kWh.
- LPG: 23% of the main rate.
- Solid fuels: 11% of the main rate.
If you budget by site, plug the effective rates into your model only for sites actually covered by an agreement.
Who pays the levy, and how does it show up on your bill?
The levy applies to non-domestic users: industrial, commercial, agricultural and public sector sites. Suppliers must charge it unless you have a valid exemption, so check how the levy appears on your energy invoice.
Very small supplies can be treated like domestic ones and escape the charge. The de minimis thresholds are:
- Electricity under 1,000 kWh per month.
- Piped gas under 4,397 kWh per month.
- Domestic-grade coal or coke under 1 tonne per month.
Secondary sites such as a storage unit or a small satellite office often fall under these limits, so check them first. When you read an invoice, find the CCL line, confirm which fuel and unit it bills, and compare the billed volume with your meter data. Our guide to standing charge versus unit rate shows how bill lines are structured, and our business energy tariffs article covers when to query a supplier.
How do Climate Change Agreements reduce what you pay?
A Climate Change Agreement is a voluntary scheme. You commit to energy-efficiency or emissions targets, and in return you pay the reduced levy rates shown above. The Environment Agency administers it, and the 2026 statutory guidance clarifies eligibility, reporting and how the buy-out fee is calculated. The 2026 statutory guidance also explains the scheme’s administration.
Four points matter most for operations:
- Eligibility depends on the installation and the scheme’s criteria, so confirm your site qualifies before assuming a discount.
- The discount is a fixed share of the main rate for each fuel, so it moves when the main rate moves.
- The scheme includes a buy-out fee, so check the guidance to understand how it may affect your costs.
- Reporting continues through the agreement period, so someone needs to own the data.
Pro Tip: Ask your supplier to confirm in writing that your agreement certificate is on file for every covered meter, then check the next invoice shows the reduced rate.
Which exemptions apply, and what changed for hydrogen and sodium bicarbonate?
Several statutory exemptions exist. Check the official guidance to see whether one applies to your supply.
The government also decided to add electricity used in electrolysis to make hydrogen to the non-fuel use exemption, with the change due by Spring 2026.
The non-fuel use exemption now covers electricity for electrolysis and natural gas used as a carbon dioxide source for sodium bicarbonate, per the January 2026 GOV.UK notice. Eligible sites still have to act, because the exemption is not automatic.
Eligible businesses complete the claim forms and notify their supplier and HMRC. Keep the notice and forms with your audit records.
What should finance and facilities teams do next?
Work through this order, and treat it as a monthly routine rather than a one-off.
- Pull recent invoices and check the CCL unit rate and fuel type against the GOV.UK figures in the table above.
- Compare each site's consumption with the de minimis thresholds, and confirm meter details. Half-hourly data helps here, and our renewable certificates guide shows how to tie it to your records.
- If a site qualifies for a Climate Change Agreement or the non-fuel use exemption, collect the evidence, notify your supplier and HMRC, and keep the paperwork for audits.
Internal controls keep the gains in place:
- Name one owner for CCL accuracy.
- Reconcile invoices to meter data every month.
- Use automated bill validation to flag rate mismatches.
- Follow a meter-to-report process like our energy data governance checklist.
Why does predictable energy data matter more than the rate itself?
The levy rises are small per kWh, but they compound across sites and years, and a rate that moves each April makes a flat budget line unreliable. What hurts more is the invoice that applies the wrong rate or ignores an exemption you hold. In our view, the finance team that knows its half-hourly profile can budget the levy accurately and defend a claim to a supplier or auditor. We built our platform around that: bill validation, anomaly detection, half-hourly analytics and carbon reporting.
— Chris
Where should you start with validating your levy charges?
We offer automated bill validation, anomaly detection, half-hourly consumption analytics and carbon reporting for Scope 1, 2 and 3, so you can catch billing errors. You can register for the Free forever plan, then explore our Bills and Half Hourly Data pages to check the levy on your own accounts.
This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.
FAQ
What is Climate Change Levy tax?
It is a UK tax on business energy use, charged per unit of electricity, gas, LPG and solid fuels. Suppliers add it to non-domestic bills. Businesses with a Climate Change Agreement pay a reduced percentage of the main rate.
Who pays the Climate Change Levy?
Non-domestic users pay it, including industrial, commercial, agricultural and public sector sites. Suppliers must charge it unless you provide a valid exemption. Very small supplies under the de minimis limits are treated like domestic use.
How do you calculate the climate levy on a bill?
Multiply the billed units by the rate for that fuel. For example, the electricity rate from 1 April 2026 is £0.00801 per kWh, and agreement holders apply their reduced percentage instead. Then reconcile the result with your meter data.
Will the levy rates change again?
Yes. The main rates are scheduled to rise on 1 April 2027, except LPG, which stays frozen. The GOV.UK rates publication lists the 2027 figures.