CCL Rates Increasing in April 2026: Updated Business Energy Levy Guidance
Climate Change Levy Rates Increasing from April 2026
Two years of CCL increases confirmed for business energy
After two years of frozen rates, the Climate Change Levy on electricity and gas is rising from April 2026 – with a further increase already confirmed for April 2027. Here's exactly how much more your business will pay and what you can do about it.
The Quick Answer for Businesses
The Climate Change Levy (CCL) on electricity and gas has been frozen at £0.00775 per kWh since April 2024. From 1 April 2026, both rates rise to £0.00801 per kWh, and from 1 April 2027 they increase again to £0.00827 per kWh. That's a combined 6.7% increase over two years. CCL is a pass-through charge on your bill – it applies regardless of your contract rate.
Key Takeaways
- CCL on electricity and gas rises 3.4% from April 2026, then a further 3.2% from April 2027
- Gas and electricity CCL rates have been equalised since April 2024 – both are treated the same
- LPG rates remain frozen at £0.02175 per kg through to at least April 2027
- Climate Change Agreement discounts remain unchanged at 92% for electricity and 89% for gas
- Carbon Price Support rates are frozen until at least March 2028
- CCL is a pass-through charge – even fully fixed contracts will see the increase on bills
📋 What Is the Climate Change Levy?
The Climate Change Levy is a tax on energy supplied to businesses in the UK. It's designed to incentivise energy efficiency and reduce carbon emissions by making energy use more expensive. Your energy supplier is responsible for charging CCL on your bill, and it appears as a separate line item or is built into your unit rate depending on your contract type.
CCL applies to electricity, gas, LPG and other solid fuels. It does not apply to domestic consumers or charities using energy for non-business purposes. The levy has two components: the main rate(which all businesses pay) and the Carbon Price Support rate(which applies to electricity generators).
For most businesses, it's the main rate that matters – and that's what's changing from April 2026.
📊 CCL Main Rates: What's Changing
HMRC has confirmed the CCL main rates through to April 2027. After two years of frozen rates for electricity and gas, both commodities are seeing increases across two consecutive financial years.
| Taxable Commodity | From Apr 2023 | From Apr 2024 | From Apr 2025 (Current) | From Apr 2026 | From Apr 2027 |
|---|---|---|---|---|---|
| ⚡ Electricity (£ per kWh) | £0.00775 | £0.00775 | £0.00775 | £0.00801 | £0.00827 |
| 🔥 Gas (£ per kWh) | £0.00672 | £0.00775 | £0.00775 | £0.00801 | £0.00827 |
| 🛢️ LPG (£ per kg) | £0.02175 | £0.02175 | £0.02175 | £0.02175 | £0.02175 |
| 🪨 Other Solid Fuels (£ per kg) | £0.05258 | £0.06064 | £0.06064 | £0.06264 | £0.06468 |
🧮 CCL Cost Calculator
Enter your annual electricity and gas usage below to see exactly how much more you'll pay in Climate Change Levy from April 2026 and April 2027.
Your CCL Cost Breakdown
Per kWh Breakdown
Want to see how CCL fits into your total energy costs? We'll break down every charge on your bill across 28+ suppliers.
Get a Transparent Quote💰 What This Means in Real Terms
The percentage increases might sound small, but CCL adds up across your total consumption. Here's what the increases look like for different business sizes.
🏪 Small Business (25,000 kWh electricity p/a)
Current CCL cost: £193.75 per year. From April 2026: £200.25(+£6.50). From April 2027: £206.75(+£13 vs current). That's across electricity alone – gas consumption adds more.
🏢 Medium Business (150,000 kWh electricity p/a)
Current CCL cost: £1,162.50 per year. From April 2026: £1,201.50(+£39). From April 2027: £1,240.50(+£78 vs current). For businesses also on gas, the total impact is significantly higher.
🏭 Large Business (500,000 kWh electricity + 300,000 kWh gas p/a)
Current combined CCL cost: £6,200 per year. From April 2026: £6,408(+£208). From April 2027: £6,616(+£416 vs current). At this scale, CCL increases become a genuine budget consideration.
🔑 Key Point
CCL is charged per kWh consumed. Unlike standing charges, the impact scales directly with your usage. Higher-consumption businesses feel the increase more, making energy efficiency measures doubly valuable – they reduce both your energy costs and your CCL liability.
⚖️ Gas and Electricity Rates: Now Equal
One important trend to understand is the equalisation of gas and electricity CCL rates. Historically, gas attracted a lower CCL rate than electricity. In April 2023, gas CCL was £0.00672 per kWh while electricity was £0.00775 per kWh – a 15% gap.
From April 2024, gas was brought in line with electricity at £0.00775 per kWh – a 15.3% increase for gas users in a single year. The rates have remained aligned since, and the new April 2026 and April 2027 rates keep gas and electricity equal at £0.00801 and £0.00827 per kWh respectively.
This equalisation reflects the Government's approach to treating all fossil fuel energy consumption equally from a carbon perspective, removing any tax advantage for gas over electricity.
💡 Why This Matters
If your business is a heavy gas user, you've already absorbed a significant CCL increase in April 2024. The April 2026 and 2027 increases apply to both fuels equally, so there's no longer a CCL advantage to being gas-heavy versus electricity-heavy. The decision between fuels should now be based purely on unit rates, efficiency and your operational needs.
✅ Climate Change Agreement Discounts
Businesses that hold a Climate Change Agreement (CCA) with the Environment Agency receive substantial discounts on CCL rates. These discounts remain unchanged through to at least April 2027.
| Commodity | CCA Discount | Full Rate (Apr 2026) | CCA Rate (Apr 2026) | Full Rate (Apr 2027) | CCA Rate (Apr 2027) |
|---|---|---|---|---|---|
| ⚡ Electricity | 92% | £0.00801 | £0.000641 | £0.00827 | £0.000662 |
| 🔥 Gas | 89% | £0.00801 | £0.000881 | £0.00827 | £0.000910 |
| 🛢️ LPG | 77% | £0.02175 | £0.005003 | £0.02175 | £0.005003 |
| 🪨 Other Solid Fuels | 89% | £0.06264 | £0.006890 | £0.06468 | £0.007115 |
📋 Who Can Get a CCA?
Climate Change Agreements are available to energy-intensive industries that commit to reducing energy consumption and carbon emissions against agreed targets. They're typically available to sectors like manufacturing, food processing, chemicals, ceramics, glass and paper production. If your business operates in an eligible sector and doesn't currently hold a CCA, the savings can be substantial – particularly with rates now increasing. Contact the Environment Agency for eligibility details.
🏭 Carbon Price Support: No Change
The Carbon Price Support (CPS) rates – the separate component of CCL paid by electricity generators and combined heat and power operators – remain frozen at their current levels until at least March 2028. These rates have been unchanged since April 2016.
🔥 Gas CPS Rate
£0.00331 per kWh – unchanged since April 2016. Frozen until at least 31 March 2028.
🛢️ LPG / Liquid Hydrocarbon CPS Rate
£0.05280 per kg – unchanged since April 2016. Frozen until at least 31 March 2028.
🪨 Coal & Solid Fossil Fuels CPS Rate
£1.54790 per GJ(gross calorific value) – unchanged since April 2016. Frozen until at least 31 March 2028.
💡 What CPS Means for You
Most businesses don't pay CPS directly – it's charged to generators who may pass it through in wholesale electricity costs. The freeze means no additional wholesale price pressure from this particular levy.
📅 Timeline: What's Coming and When
Gas CCL Equalised with Electricity
Gas CCL rose 15.3% from £0.00672 to £0.00775 per kWh, bringing it in line with electricity. This was the biggest single CCL change in recent years for gas-heavy businesses.
Rates Frozen (Current)
Electricity and gas CCL held at £0.00775 per kWh. LPG frozen at £0.02175 per kg. The current rates we're all paying now.
First Increase: +3.4% on Electricity & Gas
Both electricity and gas CCL rise to £0.00801 per kWh. Other solid fuels rise to £0.06264 per kg (+3.3%). LPG remains frozen.
Second Increase: +3.2% on Electricity & Gas
Electricity and gas CCL rise again to £0.00827 per kWh. Other solid fuels to £0.06468 per kg. LPG still frozen. That's 6.7% above current rates in total.
CCL Increases Don't Exist in Isolation
The April 2026 CCL increase lands alongside several other cost pressures on business energy bills:
- TNUoS standing charge increases – up to 94% in some regions from April 2026
- Nuclear RAB Levy – already appearing on bills since November 2025
- Employer NI increases – adding to overall business cost pressures
- National Living Wage rises – further squeezing operational budgets
📄 How CCL Appears on Your Energy Bill
How you see CCL on your bill depends on your contract type and supplier. Understanding this is important because it affects how you compare quotes and anticipate cost changes.
📋 Shown Separately
Some contracts show CCL as a separate line item on your invoice. You'll see your unit rate, then CCL charged at the published rate per kWh consumed. This makes it easy to see the exact CCL cost – and you'll see the increase clearly from April 2026.
📦 Built into Unit Rate
Other contracts bundle CCL into the unit rate. Your p/kWh rate already includes CCL. On a fully fixed contract, your supplier absorbs the CCL change during the contract term. On a pass-through contract, the CCL element adjusts when rates change.
💡 Smart Tip
When comparing energy quotes, always check whether CCL is included or excluded from the unit rate. A quote showing 28p/kWh including CCL is not directly comparable to one showing 27.2p/kWh excluding CCL. At Smart Energy, we always present transparent pricing so you can see exactly what you're paying and where every penny goes.
🎯 What Your Business Should Do Now
Recommended Actions
Check Your Contract Type
Find out whether your contract includes CCL within the unit rate or shows it separately. If it's a pass-through arrangement, you'll see the increase directly from April 2026. If it's fully fixed, check when your contract ends – your renewal rate will reflect the new CCL level.
Review Your Renewal Timeline
If your contract ends around April 2026, factor the CCL increase into your budget planning. Quotes obtained now for contracts starting after April 2026 should already reflect the new rates. Get a transparent comparison to see where you stand.
Consider Energy Efficiency Measures
Since CCL is charged per kWh, reducing your consumption reduces your CCL liability. LED lighting upgrades, improved insulation, smart heating controls and equipment upgrades all cut both your energy costs and your tax burden simultaneously.
Check CCA Eligibility
If your business operates in an energy-intensive sector, a Climate Change Agreement could save you 92% on electricity CCL and 89% on gas CCL. With rates increasing, the value of CCA discounts is growing.
Look at the Bigger Picture
CCL is just one element of your energy costs. With TNUoS increases, the Nuclear RAB Levy , and wholesale market movements all in play, a full review of your energy position makes sense. Don't focus on one cost element in isolation.
Understand Your Full Energy Costs
CCL increases are just one piece of the puzzle. We'll show you a transparent breakdown of every cost on your bill – unit rates, CCL, standing charges, pass-through levies – and compare 28+ suppliers to find the best deal for your business.
❓ Climate Change Levy FAQs
The Climate Change Levy (CCL) is a tax on energy supplied to businesses in the UK. It applies to electricity, gas, LPG and solid fuels. Your energy supplier charges CCL as part of your bill. Domestic consumers and charities using energy for non-business purposes are exempt. The levy is designed to encourage businesses to reduce energy consumption and carbon emissions.
From 1 April 2026, CCL on electricity rises from £0.00775 to £0.00801 per kWh – an increase of 3.4%. Gas rises by the same amount. A further increase to £0.00827 per kWh follows from April 2027. LPG rates remain frozen at £0.02175 per kg. Over two years, electricity and gas CCL will have risen by 6.7% from current levels.
Yes, in two main ways. First, if your business operates in an eligible energy-intensive sector, you can apply for a Climate Change Agreement (CCA) which gives you a 92% discount on electricity CCL and 89% on gas CCL. Second, reducing your energy consumption directly reduces your CCL costs since it's charged per kWh. Energy efficiency improvements like LED lighting, smart heating and better insulation all help.
The broad CCL exemption for renewable-source electricity was removed in August 2015. However, some renewable electricity supplied under specific contracts backed by Renewable Energy Guarantees of Origin (REGOs) may still qualify for exemption. Self-generated renewable electricity used on-site is also generally exempt from CCL. Check with your supplier about the specific arrangements for your supply.
CCL is a regulated pass-through charge, separate from your contracted unit rate. How it appears on your bill depends on your contract: some show it separately, others include it in the unit rate. On a fully fixed contract that includes CCL, your supplier absorbs rate changes during the contract term. On a pass-through contract, CCL adjustments flow through to your bill when rates change. When comparing quotes, always check whether CCL is included or excluded.
The Carbon Price Support (CPS) is an additional component of the Climate Change Levy paid by electricity generators and combined heat and power station operators. It creates a minimum carbon price for the UK power sector. The current CPS rate for gas is £0.00331 per kWh and has been frozen since April 2016, with no planned changes until at least March 2028. Most businesses don't pay CPS directly, but it may be reflected in wholesale electricity costs.
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