CCL Rates Announced for 2020/2021/2022

The Effects of CCL Rate Changes 2021/2022

The Finance Bill 2019/2020 will continue to re-balance the electricity and gas main rates of CCL to incentivise more efficient energy and carbon savings.

The electricity rate will be lowered in 2020/2021 and 2021/2022 and the gas rate will increase in these years so that it reaches 60% of the electricity rate by 2021/2022.

The reduced rates for sectors with Climate Change Agreements will change so that businesses in the scheme will only be subject to an increase to their CCL liability in line with the Retail Price Index.

Climate Change Levy Main Rates

Taxable Commodity Rate from 01/04/2019 Rate from 01/04/2020 Rate from 01/04/2021
Electricity (£ per kWh) 0.00847 0.00811 0.00775
Natural gas (£ per KWh) 0.00339 0.00406 0.00465
LPG (£ per kg) 0.02175 0.02175 0.02175
Other taxable commodity (£ per kg) 0.02653 0.03174 0.03640

Climate Change Levy Reduced Rates

Taxable Commodity Rate from 01/04/2019 Rate from 01/04/2020 Rate from 01/04/2021
Electricity 7% 8% 8%
Natural gas 22% 19% 17%
LPG 22% 23% 23%
Other taxable commodity 22% 19% 17%

Carbon price support (CPS) Rates

The CPS rate per tonne of carbon dioxide (tCO2) will be frozen at £18.00 for 2020/2021 to provide stability for the electricity market.

Carbon Price Support Rate from the 01/04/2016 to 31/03/2021
Carbon Price Equivalent (tCO2) £18.00
Supplies of Commodity used in Electricity Generation
Natural Gas (kWh) £0.00331
Liquefied Petroleum Gas (kg) £0.05280
Coal/Solid Fossil Fuels (GJ) £1.54790
Gas Oil/Bio-blend/Kerosene (litre) £0.04916
Fuel Oil/Heavy Oil/Light Oil (litre) £0.05711

The Effects of CCL Rate Changes 2021/2022

2EA Consulting Limited recently published a paper on the effects that Climate Change Levy (CCL) rate changes would have on businesses in the UK. With the publication of the CCL rates for 2020/2021 and 2021/2022 by the government in the Finance Bill 2019/2020, we have updated our analysis to reflect the changes in the CCL rates now published.

Natural Gas

CCL rates for natural gas have increased by the Retail Price Index (RPI) since 2015/2016, with a significant increase from 2019/2020; this is set to continue in both 2020/2021 and 2021/2022 until it reaches 60% of the electricity rate:

Changes in Natural Gas CCL Rates  - 2015/2016 to 2021/2022

The increases in the CCL rates for Natural Gas will see further year-on-year increases in the CCL payable to the government:

Sector Consumption (kWh) CCL Rate (2020/2021) CCL Payable (2020/2021) CCL Rate (2021/2022) CCL Payable (2021/2022)
Hotels 8,662,142 £0.00406 £35,168.30 £0.00465 £40,278.96
Retail/Supermarkets 947,795 £0.00406 £3,848.05 £0.00465 £4,407.25
Leisure Centres 1,683,655 £0.00406 £6,835.64 £0.00465 £7,829.00
Hospitals 7,020,269 £0.00406 £28,502.29 £0.00465 £32,644.25
Office Blocks 476,537 £0.00406 £1,934.74 £0.00465 £2,215.90
Schools 542,604 £0.00406 £2,202.97 £0.00465 £2,523.11
GP Practices 53,751 £0.00406 £218.23 £0.00465 £249.94

If we compare these changes in cost from the year 2017/2018 to those predicted for 2021/2022, then effectively the CCL payable on Natural Gas will have doubled in this period:

Sector 2017/2018 2018/2019 2019/2020 2020/2021 2021/2022
Hotels £17,151.04 £17,584.15 £29,364.66 £35,168.30 £40,278.96
Retail/Supermarkets £1,876.63 £1,924.02 £3,213.03 £3,848.05 £4,407.25
Leisure Centres £3,333.64 £3,417.82 £5,707.59 £6,835.64 £7,829.00
Hospitals £13,900.13 £14,251.15 £23,798.71 £28,502.29 £32,644.25
Office Blocks £943.54 £967.37 £1,615.46 £1,934.74 £2,215.90
Schools £1,074.36 £1,101.49 £1,839.43 £2,202.97 £2,523.11
GP Practices £106.43 £109.11 £182.22 £218.23 £249.94

Electricity

CCL rates for electricity have also increased by RPI since 2015/2016, again with a significant increase from 2019/2020; however, the CCL rate for electricity is set to decrease in 2020/2021 and 2021/2022:

Changes in Electricity CCL Rates - 2015/2016 to 2021/2022

These changes are reflected in the reduction in CCL payable to the government for the periods shown below:

Sector Consumption (kWh) CCL Rate (2020/2021) CCL Payable (2020/2021) CCL Rate (2021/2022) CCL Payable (2021/2022)
Hotels 2,704,105 £0.00811 £21,930.29 £0.00775 £20,956.81
Retail/Supermarkets 3,791,180 £0.00811 £30,746.47 £0.00775 £29,381.65
Leisure Centres 919,970 £0.00811 £7,460.96 £0.00775 £7,129.77
Hospitals 11,595,555 £0.00811 £94,039.95 £0.00775 £89,865.55
Office Blocks 396,715 £0.00811 £3,217.36 £0.00775 £3,074.54
Schools 222,129 £0.00811 £1,801.47 £0.00775 £1,721.50
GP Practices 55,969 £0.00811 £453.91 £0.00775 £433.76

If we compare these changes in cost from the year 2017/2018 to those predicted for 2021/2022, then the CCL payable on Electricity is still significantly higher, an average increase of approximately 36% from the costs of 2017/2018:

Sector 2017/2018 2018/2019 2019/2020 2020/2021 2021/2022
Hotels £15,359.32 £15,764.93 £22,903.77 £21,930.29 £20,956.81
Retail/Supermarkets £21,533.90 £22,102.58 £32,111.29 £30,746.47 £29,381.65
Leisure Centres £5,225.43 £5,363.43 £7,792.15 £7,460.96 £7,129.77
Hospitals £65,862.75 £67,602.09 £98,214.35 £94,039.95 £89,865.55
Office Blocks £2,253.34 £2,312.85 £3,360.18 £3,217.36 £3,074.54
Schools £1,261.69 £1,295.01 £1,881.43 £1,801.47 £1,721.50
GP Practices £317.90 £326.30 £474.06 £453.91 £433.76

Looking at the total CCL payments across the sectors, we can see that climate change levy will still be a significant burden upon business in the years to come.

Sectorwide Total CCL Payments - 2017/2018 to 2021/2022

View Our Climate Change Levy (CCL) Multi-Sector Analysis White Paper here

Note: The CCL payments shown assume no change in energy consumption for the years shown.

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