A 10% (20% for supplies before 1 April 2011 and 35% between 1 April and 31 March 2013) reduced rate of CCL applies to supplies of electricity for energy-intensive industries that have entered into a negotiated energy efficiency CCA. Facilities covered by a CCA are required to deliver energy efficiency or carbon saving reduction targets in return for a levy discount.
As part of the Government's reform of energy taxes in Budget 2016 it was announced that the discounted rate of CCL with effect from 1 April 2019 would change to reflect changes in the Carbon Reduction Commitment Scheme which will come to end at the end of the current phase. Holders of CCAs will pay the following reduced rates of CCL.
|Taxable Commodity||Rate from 1 April 2018||Rate from 1 April 2019||Rate from 1 April 2020||Rate from 1 April 2021|
|Petroleum gas or other gaseous hydrocarbon in a liquid state||35%||22%||23%||23%|
|Coal and lignite; coke and semi coke of coal or lignite; petroleum coke||35%||22%||19%||17%|
The overall responsibility for the agreements lies with the Secretary of State. HMRC's role is to oversee the application of the reduced rate and not other aspects of the agreements.
There are, broadly, two categories of CCA. Firstly an agreement entered into directly with the Secretary of State1. Secondly, a combination of umbrella and underlying agreements2.