Save on CCL: Could Your Business Qualify for Climate Change Levy Relief?

Paying Climate Change Levy on your business energy bill? The useful question is not simply whether you can remove it. It is whether the charge is correct, whether relief applies to your circumstances, and whether pursuing that relief would leave your business better off.

This guide explains CCL exemptions and reductions, including sector routes relevant to craft bakeries, food processors, plastics businesses and metal manufacturers.

What is Climate Change Levy?

Climate Change Levy, usually shortened to CCL, is a tax on energy supplied for most business and public-sector use. For electricity and natural gas, the main levy is calculated per kilowatt-hour of taxable energy. It is not a fixed percentage of your total bill.¹²

That distinction matters: reducing your electricity unit rate and reducing your CCL liability are separate opportunities. A bill can have the correct electricity price but incorrect levy treatment—or no billing error at all.

Climate Change Levy exemption or reduction: what is the difference?

An exclusion means a qualifying supply falls outside the levy. Examples include domestic use, charitable non-business use and certain small supplies. Being a charity does not automatically exclude all the energy it uses.

An exemption applies to specified uses, including qualifying metallurgical and mineralogical processes. A metal-related business is not automatically exempt simply because it manufactures or sells metal products.³

A Climate Change Agreement (CCA) is a separate route for eligible industrial facilities. It involves energy-efficiency or carbon-saving commitments in exchange for reduced CCL rates. Joining a sector association alone is not the same as having an approved agreement.⁴⁵

How much could a CCL reduction save?

For supplies from 1 April 2026 to 31 March 2027, the main electricity and natural-gas CCL rates are 0.801p/kWh. Qualifying CCA participants can receive a 92% electricity CCL discount or an 89% natural-gas CCL discount. These percentages apply to the levy, not the whole energy bill.²

For illustration, assume a facility uses 100,000 kWh of electricity, all otherwise subject to full CCL and all eligible for the CCA discount during that period:

This is an illustrative gross tax reduction, before VAT effects, scheme fees, administration and any costs of meeting the agreement. It is not a saving forecast for a particular business.

When deciding whether to apply, compare the likely qualifying consumption and resulting tax reduction with the full cost of participation. Do not apply the discount to energy that does not qualify.

CCL relief for craft bakers, food processors, plastics and metals

Sector organisations are useful starting points because CCA routes depend on the activities carried out at a facility. The following are relevant organisations—not a list of Openlight partners or endorsements.

Other sector routes exist; the Environment Agency publishes an official CCA sector contact directory.¹²

For a bakery, explain what happens on site: mixing, proving, baking and any separate café or retail operation. A shop selling products baked elsewhere is not the same proposition as a production bakery. Use a description of the processes, equipment and energy use—not just the business name—to start the assessment.

For plastics, describe the actual processing method—for example injection moulding, blow moulding or thermoforming—rather than simply saying that the company sells plastic products.⁸

Does my whole site need to qualify?

Not necessarily. The facility boundary and energy allocation matter. The scheme's 70% rule concerns reckonable energy, not 70% of turnover, floor space or products sold. Where eligible activities account for less than 70% of the site's reckonable energy, permanent submetering of the eligible installation is required under the statutory guidance. Have the sector administrator confirm the appropriate boundary and metering.⁴

This is why a bakery with a café, or a manufacturer with offices and a shop, needs a site-specific assessment rather than an automatic yes or no.

What should I check before applying?

Start with your current bills, annual consumption, a description of the site's processes and any existing agreement or relief certificate. Ask whether relief is already being applied before treating it as a new saving.

For new entrants to existing CCA sectors, the standard application window is 1 January to 31 August each year from 2026 to 2029. Newly eligible sectors can have separate arrangements. Confirm the relevant deadline and start date; do not assume an application produces an immediate discount.⁴

For relief routes requiring certification, HMRC uses documents including the PP11 supplier certificate and PP10 supporting analysis. The required paperwork depends on the route. A future entitlement does not, by itself, prove that an earlier bill was wrong.¹³¹⁴

Check whether your business could save on CCL

Openlight checks CCL calculations on business electricity bills and screens for potential relief using your bill and business information. Where more evidence or a sector assessment is needed, that should be the next step—not an unsupported promise of a refund.

Check the charge. Understand the eligibility. Decide whether the saving is worth pursuing.

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Related guides: Business energy bill errors · Compare business energy prices

General information, not confirmation of tax eligibility. Rates are dated above; application rules and individual circumstances must be checked before acting.