Autumn Budget Statement – 26th November 2025
The Chancellor has delivered the Autumn Budget 2025; please find enclosed details of those policies that may affect our clients:
Energy Company Obligation
The government is not continuing the funding of the Energy Company Obligation on bills after March 2026 and is announcing £1.5 billion of new funding to support households facing fuel poverty. The government will also fund 75% of the cost of the Renewables Obligation to households in 2026-2027, 2027-2028 and 2028-2029.
Fuel Duty Rates
The government will extend the temporary 5p fuel duty cut for a further five months, with the cut being reversed in three stages:
1p on 1st September 2026
2p on 1st December 2026
2p on 1st March 2027.
This will return rates to pre-March 2022 levels. The planned inflation increases for 2026-2077 will not take place, with the government uprating fuel duty rates by Retail Prices Index (RPI) from 1st April 2027.
Business Energy Prices
The government will increase the generosity of the British Industry Supercharger from 1st April 2026 and will introduce the British Industrial Competitiveness Scheme from 1st April 2027. These will be funded by bearing down on levies and other energy system costs, such as proposals under consultation to change the indexation of legacy renewables schemes.
Carbon Price Support
The government will freeze the Carbon Price Support rates in Great Britain at a level equivalent to £18 per tonne of CO2 in 2027-2028.
| Commodity | Rate Until 31/03/2028 |
|---|---|
| Natural Gas | £0.00331/kWh |
| LPG | £0.05280/kg |
| Fuel Oil | £0.05711/litre |
| Gas Oil | £0.04916/litre |
Climate Change Levy (CCL)
The main rates of CCL for gas, electricity and solid fuels will be uprated in line with RPI from 1st April 2027, these have yet to be published. The main rate for liquefied petroleum gas will continue to be frozen.
| Taxable Commodity | Rate from 01/04/2026 |
|---|---|
| Electricity | £0.00801/kWh |
| Natural gas | £0.00801/kWh |
| Liquified Petroleum Gas (LPG) | £0.02175/kg |
Reduced Rates
The reduced rates will remain at an unchanged fixed percentage of the main rates.
| Taxable Commodity | Percentage of Main Rate from 01/04/2026 |
|---|---|
| Electricity | 8% |
| Natural gas | 11% |
| LPG | 23% |
| Any other taxable commodity | 11% |
Climate Change Levy (CCL) – Treatment of Electrolytic Hydrogen
Following a consultation at Spring Statement 2025, both electricity used in electrolysis to produce hydrogen and natural gas used as a source of CO2 in the production of sodium bicarbonate will be made exempt from CCL. Subject to parliamentary approval, these amendments will be in force by Spring 2026
Carbon Border Adjustment Mechanism (CBAM)
The government will legislate in Finance Bill 2025-2026 to introduce the CBAM from 1st January 2027. The inclusion of indirect emissions within scope of the CBAM will be delayed until 2029 at the earliest.
