Fequently Asked Questions

General

What is the Climate Change Levy?

The Climate Change Levy is a tax on energy. It will be applied to most industrial use of energy from 1st April 2001.

How much will the levy cost?

The Levy rate is 0.15 p/kWh for gas, coal and coke, 0.43 p/kWh for electricity and 0.07 p/kWh for LPG. For a typical fuel mix you can expect the Levy to add 15% to your energy bill.
For a detailed assessment of the Levy cost, visit our web site www.cclevy.com.

Can I reduce the Levy I will pay?

My factory is on the Isle of Man

IoM sets its own taxation policies. You are excluded.

I buy my electricity from the Irish ESB? What about me?

If your factory is in the UK you should pay the levy.

Will I pay Levy in the energy used in my office/cold store/laboratory/distribution depot etc.?

Yes, you will pay levy on all non-exempt energy use, which will include these areas.

Will I pay Levy on the LPG used in my fork lift trucks?

We think not if the quantity can be separately identified, but will confirm.

How do I get the discount?

You need to join an approved Climate Change Levy Agreement. On approval of your application you will be given documentation to pass to your utility suppliers who will then deduct the Levy discount at source.

How do I join an approved Climate Change Levy Agreement?

If you are eligible you should apply to join either the FDF Climate Change Levy Discount Scheme or the BMF Climate Change Levy Discount Scheme. Application forms and information packs have been sent to much of the industry. Copies may be requested from our helpline 0161 874 3668 or from cclevy@enviros.com.

My company has SAP. I need to set up an account for you before I can issue an order. Please let me know your bank account number and sort code.

We will provide these asap.

Eligibility

What is eligible for Climate Change Levy Discount?

In the food and drink processing industry (F&DPI) the energy used in processing of animal or vegetable material or milk, or in technically linked processes is eligible for Climate Change Levy discount. If these activities consume more than 90% of the energy used on your site, then the remaining 10% can also be included in the so called 90:10 rule.

Is my office eligible for Climate Change Levy Discount?

If it is a stand-alone facility, then no. If it is on the same site as your processing facility then it may be included under the 90:10 rule.

Is my Quality Control laboratory eligible for Climate Change Levy Discount?

This is technically linked to processing. It is eligible.

Is my R&D laboratory eligible for Climate Change Levy Discount?

If it is processing animal of vegetable matter then yes, it is eligible.

I am a frozen food manufacturer. Is the energy used in my cold store eligible?

Yes but only if it is on the main food processing site.

My cold storage is on a separate site on it's own. Is it still eligible?

No.

But that's not fair.

Quite so!

I do some pea freezing at my logistics cold store. What then?

Energy used in pea freezing and in the cold storage dedicated to your pea operations is eligible for Climate Change Levy discount. The remainder is not.

I am a primary fish producer. Can I claim discount on the energy I use in ice-making?

Yes, provided your ice-plant is at your main production facility. Ice-making is technically linked to your process.

My business is making ice, which I sell to primary fish producers. Can I claim Climate Change Levy Discount?

Sorry, no, you are in the same position as the stand-alone cold store.

I am a salt processor. Can I claim discount on the energy I use?

Yes, eligibility has recently been extended to mineral producers.

I am a poultry producer. Can I join your scheme?

If you take birds in and send meat out, then you are a primary poultry producer and must join the British Meat Association (BPMA) scheme. If you convert raw poultry meat to food, then you can join the FDF scheme under the chilled/frozen food category.

I make cheese. Can I join your scheme?

No, you should join the Dairy Industry Federation (DIF) scheme.

Targets

What is my target?

Please refer to information sheet 3 on our web site, which will tell you.

My target is 10%. Does that mean I have to save 10% of my gas and 10% of my electricity?

No, you overall savings target is to save primary energy equivalent to 10% of the use of each fuel. However, you can make these savings in gas, or electricity, or a combination of the fuels.

If I have 10% savings target, does that mean I can't expand my business?

Not at all, you can use a specific energy target (that is you will be judged on energy use per unit of output).

Base Line Year

When is the base line year?

For most agreements any twelve month period between 1995 and 1999. Some agreements limit the baseline year to 1999.

We changed product in 1997. We used a bundle of energy in 1995 making widgets but now we use much less making howzats. Can I use 1995 as my base-line year?

If your products are very different, then no. Your base line year must reflect a situation broadly similar to your ongoing operations.

Electricity Generation

Is CHP exempt?

Energy used in "good quality" CHP schemes is exempt from Climate Change Levy.

What is "Good Quality" CHP?

A CHP scheme with a "Quality Index" greater than 100. See www.chpqua.com.

Do I pay Levy on the electricity generated by my CHP plant?

If it is good quality, no. If the scheme is not good quality because the heat recovery is too low then you must calculate how much of the electricity is "good quality." Levy is payable on the remainder.

Do I pay Levy on the output of my Diesel Generators?

Rules for autogeneration have not yet been defined. We think it is unlikely however.

Scheme Costs

What does it cost to join the Climate Change Levy Discount Scheme?

This depends on your size. There is a joining fee and then an annual fee. Actual costs are shown in Information Sheet 10.

I am a consultant advising the food industry. Can I have an info pack please?

Your client will have been sent a pack. We can send you one for a fee of £25 payable in advance. Much of the material is available on our website.

Enhanced Capital Allowances (ECAs)

The ECS for a 1.1 kW high efficiency motor is £470, but I can buy and install these motors for £200. Can I claim an ECA of £200 or £470? You should claim the actual cost of the motor, i.e. £200. You can claim £470 for any high efficiency motors of this size that you might purchase as part of a fully functioning machine.