In 1997, at the Kyoto Summit on Climate Change, the
EU signed an agreement to reduce Greenhouse Gas Emissions by 8% on 1990
levels by the year 2010.
The UK Government has now set itself a target to
reduce emissions by 20% by the year 2010.
The Climate Change Levy (CCL) was introduced
in April 2001. The CCL is an energy tax that adds approximately 15% to typical
energy bills of UK businesses.
The CCL is a key part of the UK governments strategy to promote energy
efficiency and reduce greenhouse gas emissions.
The CCL is applied to electricity, gas, coal and Liquid Petroleum Gas (LPG),
but is not applied to any domestic supplies or fuel from renewable sources. The impact of the CCL upon UK
businesses has been helped by a 0.3% reduction in National Insurance
contributions. Energy intensive industries are able to join Climate Change
Agreements to help further mitigate the effects of this tax.
How much is it?
The levy is charged at a flat rate on each kWh of
energy consumed, currently at the following rates:
- Electricity
0.441p/kWh
- Natural Gas
0.154p/kWh
- Coal/lignite
1.201p/kg (approx 0.154p/kWh)
- LPG
0.985p/kg (approx 0.07p/kWh)
On the 1st April 2008, the price of the levy
will rise in line with inflation. The changes will be as follows:
- Electricity
è
0.456p/kWh (+0.015p)
- Natural Gas
è
0.159p/kWh
(+0.005p)
- Coal/lignite
è
1.242p/kg
(+0.041p)
- LPG
è
1.018p/kg (+0.033p)
 How is it collected?
The levy is administered by Customs & Excise. It is
collected by your energy supplier on behalf of Customs & Excise, and appears on
your electricity or gas bill, above the VAT line.
How can I reduce my CCL?
For certain energy-intensive companies discounts of up to 80% are available,
but they involve implementing an action plan to reduce your energy consumption
considerably over the next 10-15 years.
The following types of energy are exempt from the levy:
- Good quality Combined Heat & Power systems (CHP)
- Renewable energy (solar, wind etc)
- Waste derived power
- Road fuels
The Carbon Trust
 
The Carbon Trust was
set up as part of the government's ongoing climate change programme as an
independent body to help UK business reduce greenhouse gas emissions and
implement low carbon technology in the UK.
They have just launched a powerful new campaign to raise awareness of energy
efficiency. The campaign, which uses the tagline 'Carbon
Costs',
highlights the fact that British business is wasting as much as 20 per
cent of its energy.
They have many informative sections on their websites. Below are a few
that should be of interest to all businesses.
About the Carbon Trust:
http://www.carbontrust.co.uk/about/about/
Climate change:
http://www.carbontrust.co.uk/climatechange/climatechange/
Why save energy?:
http://www.carbontrust.co.uk/energy/whysaveenergy/default.htm
Business Benefits:
http://www.carbontrust.co.uk/energy/whysaveenergy/business.htm
Environmental Benefits:
http://www.carbontrust.co.uk/energy/whysaveenergy/environmental.htm
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