Climate Regulations and Schemes
About The Climate Change Levy (CCL)
The costgard team has over 33 years’ of expertise, and as a company we have been helping companies navigate the business gas and electricity market for the last 26 years.
Maria O’Sullivan, MD at costgard:
“We understand the business gas and electricity industry and we use our strong relationship with gas suppliers to find the best options and prices for you. With tariffs ever changing, savvy business owners and managers appreciate the need to make changes to maintain the most efficient rate for their business energy – this is where costgard comes in.”
Understanding the Legislation
The Climate Change Levy is a tax on the energy consumed by businesses in the United Kingdom. It was first introduced in April 2001, and in the years since it has gone through several updates and the levy rates have changed to reflect economic events and energy consumption levels.
The intention of the tax, and its predecessor the Fossil Fuel Levy, is to give business managers an incentive to increase energy efficiency and to reduce carbon emissions by switching to tax-free renewable energy from new renewables and approved cogeneration schemes. There is still a tax on nuclear generated energy, even though it causes no direct carbon emissions.
The only businesses who don’t pay CCL are charities and non-for-profit organisations who pay reduced VAT rate, in addition to businesses who have energy use below the minimal limits. Some of the proceeds of the Climate Change Levy go to fund energy efficiency initiatives such as the Carbon Trust, which was set up as a direct result of the first tranche of CCL revenue.
The Streamlined Energy and Carbon Reporting Scheme
Like its predecessor the Carbon Reduction Commitment, this mandatory scheme is aimed at improving energy efficiency and cutting emissions in large public and private sector organisations. The scheme features a range of reputational, behavioural and financial drivers, which aim to encourage organisations to develop energy management strategies that promote a better understanding of energy usage.
The Streamlined Energy and Carbon Reporting Scheme (SECR) requires organisations to reference energy and carbon emissions in their annual report. More businesses are required to participate in the SECR than the previous CRC scheme, and take action which is ‘meaningful, informative and commensurate with the size and level of energy use’ in the business.
As well as reporting on energy use, there is a requirement to provide commentary on measures taken to increase energy efficiency each year, making the issue more transparent to your customers and other stakeholders. As a result, it is important to understand your obligations and to ensure you have the right systems and processes in place to report the required data. The SECR applies to all companies which meet two of the following criteria:
- over 250 employees
- annual turnover of more than £36m
- annual balance sheet of over £18m
Dealing with organisations of all sizes and sectors, we understand that desire and resolution to reduce business carbon footprints is not determined by either legislation or company size. Wherever you sit on your net zero journey, speak to our experienced energy team about how we can assist you to…
- Navigate Green Energy Supply
- Adhere to any regulations that might apply to your business
- Move further with your Business Carbon Reduction Plan
Looking for more information on business and climate matters?
The following organisations have useful resources available:
The Carbon Trust
The Department for Energy Security and Net Zero (DESNZ)
The UK Business Climate Hub
Reduce energy costs and cut carbon: it’s good for business