Measure
The government has committed to removing Climate Change Levy (CCL) costs from electricity used in electrolysis to produce hydrogen, and to conduct a wider review of CCL. The intention is to “ensure CCL remains up to date with the changing energy landscape, simplify CCL for hydrogen producers, and ensure it does not act as a barrier to low carbon electrolytic hydrogen production.”
Accordingly, the government has published a consultation to seek views on the best legislative way to remove the CCL costs, and on other areas where CCL may need to be reviewed.
Producers and users of hydrogen, and other businesses that pay CCL.
The consultation closes on 7 May 2025.
The consultation will be an opportunity to review the application of CCL to keep it up-to-date, and able to fulfil its intended purposes.
As the market develops, we hope that the government will also consider the future UK indirect tax treatment for hydrogen, so that it will mirror facilitations and reliefs that exist for wholesale gas and power, given the focus on decarbonisation.