Summer Budget: Osborne scraps renewables exemption to CCL

The renewable generation exemption to the Climate Change Levy has been removed by the chancellor in his Budget speech.

This will see the levy of 0.456p/kWh placed onto electricity purchased and supplied to non-domestic business customers who had previously used Levy Exemption Certificates.

Osborne said the exemption was “outdated” and could be removed because the government has a “long term framework for investment in renewable energy in place”.

“This change will correct an imbalance in the tax system by preventing taxpayers’ money benefitting renewable electricity generated overseas, and by helping ensure support for low carbon generation provides better value for money for UK taxpayers,” the budget statement says.

The exemption will be removed from 1 August 2015, although there will be transitional period for suppliers to claim the exemption on electricity that was generated before that date.

The chancellor also unveiled plans to “broaden” the tax support and exemptions for the North Sea oil and gas industry.

This will build upon the £1.3 billion of support and tax exemptions he awarded the industry in his March budget.

“The government believes in making the most of the UK’s oil and gas resources, including the safe extraction of shale gas,” the budget says.

“Building on action set out in the March Budget 2015, the government will expand the North Sea investment and cluster area allowances to include additional activities which will maximise economic recovery. The government will also bring forward proposals for a sovereign wealth fund for communities that host shale gas development.”