Adapting regulations regarding environmental taxes in the UK makes your business more environmental friendly and protects our environment. There are different taxes and schemes to encourage you to adopt these regulations.

If you are running a business then:

• You may be consuming a lot of energy
• Small businesses with fewer energy needs
• You go on to buy energy-efficient solutions

Climate Change Levy (CCL)

CCL is an environmental tax charged on the energy used by businesses in industrial, commercial, and public service sectors. There are two CCL rate categories:

• Main Rates: Apply to gas, electricity, and solid fuels.

• Carbon Price Support (CPS) Rates: Apply to fossil fuels used for electricity generation.

Current (2025) Main Rates:

• Electricity: 0.775 p/kWh

• Gas: 0.775 p/kWh

• LPG: 2.175 p/kg

• Other Fuels: 6.064 p/kg

You do not pay the main rate if your business has low energy needs, is for domestic use, or is involved in charity-related activities. CCL is collected by HMRC and includes VAT on top.

Emissions Trading

The EU ETS affects businesses from energy-driven sectors and areas. This includes industries related to energy and manufacturers of certain kinds. This scheme allows your business to trade greenhouse allowances. This means you can buy and sell greenhouse gas emission allowances. Allowance trading reduces your business’s environmental impact. 

Under EU ETS, your business has to meet the target by cutting its emissions and trading emission allowances.

Capital Allowances on Energy-Efficient Items

You can avail this allowance if you purchase environmentally friendly equipment for your business. You can pay less tax after this. Your business will also be eligible for enhanced capital allowance on equipment that includes:

• Vehicles with a low carbon footprint
• Energy-efficient equipment and machinery
• Gas and biofuel technology
• Water-saving gadget
• Zero-emission vehicles

As of 2025, a new Climate Change Agreement (CCA) Scheme is opening to support energy-efficient investments.

Landfill Taxes

Businesses have to pay taxes on dumping their waste through landfill sites. This tax is independent of the landfill fee. Your business will have to register for it in under 30 days. You will have to face fine and penalties if the period expires.

There are two rates:

• Lower rate of £2.65 per tonne for waste that includes rock and soil
• The standard rate of £84.40 per tonne for active waste

Aggregate Levy

This levied tax is applicable on rock soil, sand and other earth material dredged from the ground or waters. Your business will have to pay £2 per tonne for it. Environmental taxes in the UK ensure that you reduce your carbon footprint and contribute to the environment. Also, these green taxes will help you bring down your operational costs significantly. 

Conclusion

Environmental taxes in the UK aim to reduce the carbon footprint of businesses while promoting greener practices. By complying with these regulations, your business not only contributes to protecting the environment but may also benefit from tax savings and operational efficiency.