Climate Change Levy (CCL) Non‑fuel Use Exemption – 27th March 2026
The Climate Change Levy (Fuel Use and Recycling Processes – Amendment) Regulations 2026 came into force on 12th March 2026. This means from 12th March 2026, businesses may claim CCL exemption on non-fuel use for either:
- Electricity used in electrolysis to produce hydrogen.
- Natural gas used as a source of carbon dioxide in the production of sodium bicarbonate.
Excise Notice CCL1/3: Climate Change Levy – Reliefs and special treatments for taxable commodities provides guidance on how to claim the exemption.
The notice has been updated to include the two new non-fuel uses added in the exemption and clarifies that only the non-fuel use specified is eligible for relief.
For example, electricity used in electrolysis to produce hydrogen is exempt, but electricity used to power a compressor to compress the hydrogen after production is not.
They have also updated the notice to give further guidance that claims for CCL exemption must be as accurate as possible.
For example, using sub-metering data where only part of a supply is eligible to relief. Where an approach like sub-metering isn’t available, best estimates should be used instead.
At 2EA®, we specialise in helping businesses navigate the complexities of Climate Change Levy legislation by providing assistance with CCL exemption application process.
