Part 5: Excise Duties and other taxes Section 49: CCL: removal of exemption for electricity from renewable sources Background note
CCL came into effect in April 2001. It is a tax on the non-domestic (i.e. business, service and public sector) use of energy (gas, electricity, liquefied petroleum gas and solid fuels), and is aimed at promoting energy efficiency in order to help meet the UK’s international and domestic targets for cutting emissions of greenhouse gases.
	Electricity generated from renewable sources has been exempt from CCL when supplied under a renewable source contract. The original purpose of removing tax from these supplies was to mitigate the additional cost of renewable source electricity and in so doing increase demand from non-domestic consumers.
	Energy policy has subsequently moved on, with far greater incentives available, targeted at renewable generation as opposed to supply. As the quantity of renewable source electricity available has increased, the CCL exemption has ceased to provide value for money. The exemption is therefore being withdrawn for electricity generated on or after 1 August 2015.
	To enable suppliers to retain the benefit of renewable source electricity already acquired they will, for the time being, be able to continue to exempt supplies of electricity where this was generated from renewable sources before 1 August 2015.
	During the summer and autumn the government will consult on how long suppliers should be given to use up accumulated renewable source electricity and on any other appropriate transitional arrangements. The government intends to legislate for these arrangements where necessary in Finance Act 2016.