The Climate Change Levy will apply to most industrial and commercial use of energy. For the craft bakery industry this means a tax on the energy used in all operations including bakeries and retail shops. The Levy will not be applied to energy used in the domestic sector or in transport. 100% exemptions are allowed for some business uses of energy. Information Sheet 1 has more details, but the most important of these are:
- Fuel used for "good quality" CHP will not be subject to the Levy. Information Sheet 11 gives more details on the treatment of CHP.
- Energy supplied from "new renewable" sources (excluding large-scale hydro) will not be subject to the Levy.
| Whilst these exemptions may be of some help to a few craft bakeries, the key opportunity to mitigate the impact of the Climate Change Levy is through an 80% discount, available to eligible companies that sign a "Climate Change Levy Agreement" (CCLA) with the Government. In a CCLA you will make a commitment to achieve a certain energy efficiency improvement by 2010 in return for your 80% discount. Every two years you will need to meet milestones towards that target to ensure your discount continues throughout the period of the Agreement. |
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