Energy Tax Relief

In an era where energy costs continue to rise, energy-intensive industries face unique challenges. However, there’s good news – the government recognises the importance of supporting these sectors and is offering valuable tax relief incentives to allow businesses to remain competitive in the European market.

The Advantage of Tax Relief for Energy-Intensive Businesses

What is energy tax relief? Energy tax relief schemes, such as the Energy-Intensive Industries (EII) exemption scheme or the Climate Change Levy (CCL) exemption scheme, help energy-intensive industries in the UK to alleviate the financial burden associated with high energy consumption.

Why does it matter? By taking advantage of energy tax relief, your business can significantly reduce its energy tax costs. This means more capital stays within your organisation, enabling you to reinvest in innovation, employee development, or other strategic initiatives and improve your bottom line.

At Ryan, we specialise in two of these exemption schemes:

The Energy-Intensive Industries (EII) Exemption Scheme
The Climate Change Levy (CCL) Exemption Scheme

Energy Tax Relief Calculator

Calculate your potential savings with our Energy Tax Relief Calculator.

If you qualify for the EII scheme, you could save up to:

If you qualify for the CCL exemption scheme, you could save up to:

Please use the form below to find out how we can help you save today.

*The Ryan Energy Tax Relief Calculator provides an estimate based on your inputs and may not consider all factors that influence any eligibility. The calculator is a guide and should not be relied upon as professional advice. We are able to provide bespoke advice tailored to your specific scenario. Please complete the form above (on calculation results), and one of our experts will be in touch. By use of this calculator, you acknowledge and agree that we are not providing any professional advice and are not responsible for any errors or inaccuracies.

The Energy-Intensive Industries (EII) Exemption Scheme

The EII exemption scheme is a programme designed to support EIIs. These industries, which include sectors such as steel, plastic, glass, and paper manufacturing, play a crucial role in the economy, as they contribute to job creation and economic growth.

However, they consume a significant amount of energy in their production processes, and their high energy use can be a financial burden when compared to industries in countries with cheaper energy.

The EII scheme helps to level the playing field by providing financial relief to these industries. It works by offering an exemption of up to 100% on four non-commodity costs (CfD, RO, FiT, and CM) charged on electricity bills, as well as up to 60% exemption from network charges under the Network Charging Compensation Scheme (NCCS). Together, these exemptions can represent up to 35% of the overall electricity bill!

To qualify for the EII exemption scheme and the subsequent NCCS, companies must meet certain criteria to receive an EII certificate.

Who Is Eligible for the EII Exemption Scheme?

A business that manufactures a product in the UK within an eligible sector that has a specific four-digit NACE code.

A business that passes the “business-level test.”

The Climate Change Levy (CCL) Exemption Scheme

The CCL is a tax imposed on businesses and organisations in the UK to encourage the reduction of carbon emissions and promote energy efficiency. It was introduced as part of the government’s commitment to addressing climate change and encouraging sustainable practices.

The CCL exemption scheme allows qualifying businesses to apply for relief from the levy, provided their energy has been consumed in the exempt areas listed below. On average, the savings range from 4-7% of the entire energy bill, and the exemption can be backdated up to four years if you have been paying CCL during this period when you should have been exempt.

Who Is Eligible for the CCL Exemption Scheme?

A business may be eligible for up to 100% relief on the CCL charges, with exemptions available for the following:

Businesses that conduct mineralogical or metallurgical manufacturing processes
Businesses using supplies used in certain types of transport and in combined heat and power (CHP) plants
Domestic use, charities, and community heating schemes

Can You Qualify for Both Schemes?

Yes, you can! Many industries qualify for both energy tax relief schemes, as shown in the diagram below.

Successful claimants of both the EII and CCL exemption schemes are eligible to receive benefits of up to a 41% discount on their electricity bills, along with an additional 6% discount on their gas bills for the last four years and future bills!

Energy Intensive Industries Exemption Scheme FAQs

FAQs about the Energy Intensive Industries Exemption Scheme

1Can I be eligible for the Networking Charging Compensation Scheme without being eligible for the EII scheme?

Unfortunately, not. The criteria is the same for both – you must be eligible for the EII scheme to be eligible for the NCC Scheme.

2Do I need a separate certificate to benefit from the NCC Scheme?

No. A valid EII exemption certificate will allow you to benefit from the NCC Scheme.

3Will I see an immediate reduction in my electricity costs?

No. Initially, the scheme states that a retrospective payment will be made after April 2025 to refund networking charges effectively “overpaid” from April 2024. We are awaiting a legislation update to confirm how the benefit will be given from April 2025.

4Is my percentage of exemption in line with my EII certificate percentage of exemption?

Yes. As the percentage of exemption under the NCC Scheme is in line with that of your EII percentage of exemption, you would receive 60% compensation of your electricity network charging costs if your EII certificate holds 100% exemption. If your EII percentage of exemption was 50%, you would receive 50% compensation on 60% of your network charging costs.

5Do I need to make a separate application for the NCC Scheme and provide you with new details?

No. As the NCC Scheme follows on from our EII application process, the building, evidencing, and defending of the NCC submission will be handled by us in an efficient and streamlined manner.

We turned to Ryan for guidance and support with the Climate Change Levy (CCL) exemption scheme and were immediately impressed with their expertise. Throughout the process, the team demonstrated an exceptional level of professionalism and attention to detail, as well as a thorough understanding of the regulations and requirements. They were always available to answer our questions and provide updates on the status of our application. The outcome of our application exceeded expectations, and we would highly recommend Ryan to any organisation in need of energy tax relief services.
Jat Purewal, Director
Whiteley Brooks Engineering

Connect with an Expert

Our dedicated energy tax relief team specialises in guiding energy-intensive businesses through the complexities of the EII exemption scheme and CCL exemption scheme.

To explore how we can support your business with understanding the intricacies of energy tax relief and your eligibility for the schemes, simply fill in the form below and one of our tax relief professionals will be in touch shortly.