- At Spring Statement 2025, the government committed to remove Climate Change Levy (CCL) costs from electricity used in electrolysis to produce hydrogen.
- HM Treasury issued a consultation seeking input on the best legislative approach to remove the CCL costs.
- The government also announced a wider review of CCL, and the consultation sought views on other areas where review of CCL may be necessary for alignment with the “changing energy landscape and the government’s clean power and net zero missions”.
- At Budget 2025, the government confirmed that electricity used in electrolysis to produce hydrogen will be exempt from CCL.
- The government also confirmed its commitment to the wider review of CCL.
- Timing: the consultation closed on 7 May 2025 and the government issued the response on 26 November 2025. The CCL amendment was implemented by way of the Climate Change Levy (Fuel Use and Recycling Processes) (Amendment) Regulations 2026, which came into force on 12 March 2026. The government will provide an update on its commitment to the wider review “in due course”.
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