The Climate Change Levy (CCL) is rising by 45% for Electricity and 67% for Gas in April 2019. Why?

 In Articles, Electricity, Gas, News

What is the CRC?

The Carbon reduction Commitment (CRC) is a scheme aimed at large energy users to encourage them to reduce energy consumption. Organisations that were captured under this scheme have been obliged to report on their carbon emissions and undertake measures to reduce them. The motivating factor is that they have been charged for the emissions they produce.

So, what’s the catch?

As of April 2019, the CRC will be replaced. Consequently, the government will recover the tax revenues lost from the closure of the CRC Scheme by increasing the main rates of CCL. The costs will now be spread across all business energy users and will be recovered through the CCL. This will benefit large energy users but negatively impact smaller ones.

The government’s view is that these increases will strengthen the incentive for businesses with the greatest potential to save energy. Take note; these words are the key to these measures.

How much will it cost?

Electricity:
On the 1st April 2019, Climate Change Levy (CCL) is due to rise by about 45%. Current rates are 0.583 pence for every kilowatt hour (kWh) used, this will rise to 0.847 pence/kWh. The good news is that this is the peak, and CCL for electricity is set to fall to 0.775 pence/kWh by 2021

Gas:
There will be a more significant rise for gas from 0.203 pence/kWh to 0.339 pence/kWh. Unlike electricity, gas is set to continue to rise, reaching 0.465 pence/kWh by 2021.

If you examine your bills from April onwards you shouldn’t notice any change in the fuel components, but in the CCL charge, which is based on your actual consumption. VAT is then added to the total. *See important note

None of this is good news for the small and medium enterprise energy user and it is just one of a number of cost increases occurring in 2019. These costs are fixed and based on energy consumption. Every kilowatt hour of gas and electricity used has a corresponding carbon emission tax applied. This is true even for a Green energy contract.

What’s the point?

Well, as we know, climate change and pollution are causing havoc throughout our planet and these measures are designed to incentivise all of use to reduce energy consumption. The main conclusion is that there is only 2 ways to mitigate these continual increases; either reduce consumption or generate your own energy!

Ask Touchstone to help find ways of reducing your energy consumption by calling: 01252 338777.

*If you are a charity you could benefit from a reduction in VAT and an exemption from CCL.
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