The Climate Change Levy (“CCL”) was introduced in 2001 under powers arising from the Finance Act 2000, to encourage a reduction in carbon emissions. It is an energy tax rather than a carbon tax which is levied on taxable energy commodities – any organisation that supplies taxable energy commodities to others, uses them in its business or supplies them to other areas of its business (self-supply) is eligible to pay the levy. This applies to industry, agriculture and the public sector, as well as on large power generators that use fossil fuels, through the Carbon Price Support (“CPS”) mechanism.
This lesson describes the Climate Change Levy which is paid by all energy suppliers as well as other users of taxable commodities.