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CCL Rates & Cost Analysis - 2020, 2021 & 2022

Last week the Chancellor of the Exchequer stood in Parliament and gave his budget speech. How you view the hour long speech is down to you but it was clear that climate change was relegated to the benches and the environment on the back burner.

Like many in the industry. We were waiting to hear the new Climate Change Levy (CCL) rates for 2020/2021/2022.

We recently published a paper on the effects that CCL rate changes would have on businesses in the UK., which can be found here: https://www.2ea.co.uk/Climate-Change-Levy-White-Paper---An-Analysis-of-2017_18-vs-2019_20-CCL-Rates.html

Over the weekend the further rates were announced. These rates and further cost analysis to business have been summarised below. Please note these costs are per site. 

The Finance Bill 2019/2020 will continue to re-balance the electricity and gas main rates of CCL to incentivise more efficient energy and carbon savings.

The electricity rate will be lowered in 2020/2021 and 2021/2022 and the gas rate will increase in these years so that it reaches 60% of the electricity rate by 2021/2022.

The reduced rates for sectors with Climate Change Agreements will change so that businesses in the scheme will only be subject to an increase to their CCL liability in line with the Retail Price Index.

Climate Change Levy Main Rates

Taxable Commodity

Rate from 01/04/2019

Rate from 01/04/2020

Rate from 01/04/2021

Electricity (£ per kWh)

0.00847

0.00811

0.00775

Natural gas (£ per KWh)

0.00339

0.00406

0.00465

LPG (£ per kg)

0.02175

0.02175

0.02175

Other taxable commodity (£ per kg)

0.02653

0.03174

0.0364

Climate Change Levy Reduced Rates

Taxable Commodity

Rate from 01/04/2019

Rate from 01/04/2020

Rate from 01/04/2021

Electricity

7%

8%

8%

Natural gas

22%

19%

17%

LPG

22%

23%

23%

Other taxable commodity

22%

19%

17%

Carbon price support (CPS) Rates

The CPS rate per tonne of carbon dioxide (tCO2) will be frozen at £18.00 for 2020/2021 to provide stability for the electricity market.

Carbon Price Support

Rate from the 01/04/2016 to 31/03/2021

Carbon Price Equivalent (tCO2)

£18.00

Supplies of Commodity used in Electricity Generation

Natural Gas (kWh)

£0.00331

Liquefied Petroleum Gas (kg)

£0.05280

Coal/Solid Fossil Fuels (GJ)

£1.54790

Gas Oil/Bio-blend/Kerosene (litre)

£0.04916

Fuel Oil/Heavy Oil/Light Oil (litre)

£0.05711

Natural Gas

CCL rates for natural gas have increased by the Retail Price Index (RPI) since 2015/2016, with a significant increase from 2019/2020; this is set to continue in both 2020/2021 and 2021/2022 until it reaches 60% of the electricity rate:

The increases in the CCL rates for Natural Gas will see further year-on-year increases in the CCL payable to the government:

Sector

Consumption (kWh)

CCL Rate (2020/2021)

CCL Payable (2020/2021)

CCL Rate (2021/2022)

CCL Payable (2021/2022)

Hotels

8,662,142

£0.00406

£35,168.30

£0.00465

£40,278.96

Retail/Supermarkets

947,795

£0.00406

£3,848.05

£0.00465

£4,407.25

Leisure Centres

1,683,655

£0.00406

£6,835.64

£0.00465

£7,829.00

Hospitals

7,020,269

£0.00406

£28,502.29

£0.00465

£32,644.25

Office Blocks

476,537

£0.00406

£1,934.74

£0.00465

£2,215.90

Schools

542,604

£0.00406

£2,202.97

£0.00465

£2,523.11

GP Practices

53,751

£0.00406

£218.23

£0.00465

£249.94

If we compare these changes in cost from the year 2017/2018 to those predicted for 2021/2022, then effectively the CCL payable on Natural Gas will have doubled in this period:

Sector

2017/2018

2018/2019

2019/2020

2020/2021

2021/2022

Hotels

£17,151.04

£17,584.15

£29,364.66

£35,168.30

£40,278.96

Retail/Supermarkets

£1,876.63

£1,924.02

£3,213.03

£3,848.05

£4,407.25

Leisure Centres

£3,333.64

£3,417.82

£5,707.59

£6,835.64

£7,829.00

Hospitals

£13,900.13

£14,251.15

£23,798.71

£28,502.29

£32,644.25

Office Blocks

£943.54

£967.37

£1,615.46

£1,934.74

£2,215.90

Schools

£1,074.36

£1,101.49

£1,839.43

£2,202.97

£2,523.11

GP Practices

£106.43

£109.11

£182.22

£218.23

£249.94

Electricity

CCL rates for electricity have also increased by RPI since 2015/2016, again with a significant increase from 2019/2020; however the CCL rate for electricity is set to decrease in 2020/2021 and 2021/2022:

These changes are reflected in the reduction in CCL payable to the government for the periods shown below:

Sector

Consumption (kWh)

CCL Rate (2020/2021)

CCL Payable (2020/2021)

CCL Rate (2021/2022)

CCL Payable (2021/2022)

Hotels

2,704,105

£0.00811

£21,930.29

£0.00775

£20,956.81

Retail/Supermarkets

3,791,180

£0.00811

£30,746.47

£0.00775

£29,381.65

Leisure Centres

919,970

£0.00811

£7,460.96

£0.00775

£7,129.77

Hospitals

11,595,555

£0.00811

£94,039.95

£0.00775

£89,865.55

Office Blocks

396,715

£0.00811

£3,217.36

£0.00775

£3,074.54

Schools

222,129

£0.00811

£1,801.47

£0.00775

£1,721.50

GP Practices

55,969

£0.00811

£453.91

£0.00775

£433.76

If we compare these changes in cost from the year 2017/2018 to those predicted for 2021/2022, then the CCL payable on Electricity is still significantly higher, an average increase of approximately 36% from the costs of 2017/2018:

Sector

2017/2018

2018/2019

2019/2020

2020/2021

2021/2022

Hotels

£15,359.32

£15,764.93

£22,903.77

£21,930.29

£20,956.81

Retail/Supermarkets

£21,533.90

£22,102.58

£32,111.29

£30,746.47

£29,381.65

Leisure Centres

£5,225.43

£5,363.43

£7,792.15

£7,460.96

£7,129.77

Hospitals

£65,862.75

£67,602.09

£98,214.35

£94,039.95

£89,865.55

Office Blocks

£2,253.34

£2,312.85

£3,360.18

£3,217.36

£3,074.54

Schools

£1,261.69

£1,295.01

£1,881.43

£1,801.47

£1,721.50

GP Practices

£317.90

£326.30

£474.06

£453.91

£433.76

Looking at the total CCL payments across the sectors, we can see that climate change levy will still be a significant burden upon business in the years to come.

For further information on CCL or other industry legislation. Please visit our website: https://www.2ea.co.uk/News.html 

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