Climate Change Levy (CCL): May 2026 Update for UK Businesses
The Climate Change Levy (CCL) is a UK government tax applied to non-domestic energy use. It affects most businesses by adding a levy to electricity, gas, LPG and certain solid fuels, with the aim of encouraging improved energy efficiency and reduced carbon emissions.
From 1 April 2026, CCL rates for electricity and gas increased in line with inflation. These charges apply regardless of whether your energy contract is fixed or flexible, meaning many businesses will see higher bills simply due to policy costs.
For energy-intensive organisations, this increase can translate into thousands of pounds in additional annual costs, unless exemptions or discounts apply.
What Is a Climate Change Agreement (CCA)?
A Climate Change Agreement (CCA) is a voluntary agreement between eligible businesses and the Environment Agency. In return for meeting energy-efficiency or carbon-reduction targets, businesses receive substantial discounts on the Climate Change Levy.
We regularly support energy‑intensive organisations that are eligible for Climate Change Agreements but are not currently benefitting from reduced CCL rates. For qualifying businesses, CCA discounts can reduce the levy by up to 92% on electricity and 89% on gas, delivering significant recurring savings.
CCA discounts in 2026/27
- 92% off electricity CCL
- 89% off gas CCL
- 77% off LPG CCL
These discounts reduce the levy itself, not your unit energy price and can deliver significant ongoing financial benefits for qualifying organisations.
New CCA Scheme: What Changed in 2026?
A new six-year CCA scheme officially began on 1 January 2026 and will run until March 2033, providing longer-term certainty for energy-intensive industries.
Key changes include:
- New target periods starting January 2026
- Facility-level targets, rather than site grouping
- Higher buy-out costs for failing to meet targets
- Continued eligibility for reduced CCL rates until 2033 if compliance is maintained
Businesses already in a CCA were required to reconfirm eligibility, and new entrants can now apply through their sector association.
Is Your Business Eligible for a CCA?
Climate Change Agreements are aimed at energy-intensive sectors operating in competitive markets. Common eligible industries include:
- Manufacturing
- Food & drink production
- Agriculture & horticulture
- Chemicals
- Ceramics, glass and metals
- Recycling and resource processing
Over 8,000 UK facilities currently hold a CCA, and many more remain eligible but unenrolled.
Why Should You Check Your Eligibility?
CCL rates have risen since last month, and further increases are already confirmed for 2027, policy costs now make up a growing share of business energy bills.
For qualifying businesses, a CCA can help to:
- Improve long-term budgeting certainty
- Support compliance with sustainability and ESG goals
- Encourage investment in energy efficiency with clear financial return
Many organisations overpay simply because discounts are not applied correctly or eligibility hasn’t been fully explored.
How We Can Help
At Stadia, we support businesses with:
- CCA eligibility assessments
- Application and onboarding support
- Ongoing CCA compliance and reporting
- Bill validation to ensure discounts are applied correctly
If your business uses significant energy, a quick review could uncover substantial savings. We often find that a simple CCL and CCA review can uncover immediate savings, without requiring changes to energy supply contracts. In many cases, savings are realised purely through correct application of discounts and ongoing compliance support.
Contact a member of our team here to find out more about the services we offer.
