Definition of climate change levy

The climate change levy is charged on electricity, coal (including hydrocarbon derivatives) and natural/petroleum gas supplied to industrial and commercial consumers. Suppliers are required to register and collect the tax. The levy is calculated at different rates for different fuels. [1]


climate change levy in the news

In the UK Summer Budget 2015 speech, the chancellor said the government would remove the climate change levy exemption for renewably sourced electricity from 1st of August 2015.

Drax, the power utility switching from burning coal to wood pellets, said the move, which is estimated to save £450m in the current financial year and £900m by 2020, could reduce its revenues by about £30m in 2015 and £60m in 2016.

“We are surprised and disappointed at this retrospective change to a support regime which has been in place since 2001 specifically to encourage green energy and support renewable investment decisions,” said the chief executive of Drax. [2]

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