Budget Notes


Who is likely to be affected?

1. Electricity generators and suppliers.

General description of the measure

2. Legislation will be introduced in Finance Bill 2008 to remove coal mine methane from the list of sources of electricity regarded as renewable for CCL purposes. Electricity generated from most renewable sources is eligible for the CCL exemption scheme for such electricity. The impact of this change is that electricity generated from coal mine methane will no longer qualify for the CCL exemption scheme.

Operative date

3. The measure will have effect for electricity generated from coal mine methane on or after 1 November 2008.

Current law and proposed revisions

4. Paragraph 19(4A) of Schedule 6 to the Finance Act (FA) 2000 and regulation 47(2A) of the Climate Change Levy (General) Regulations 2001 require coal mine methane to be regarded as a renewable source (rather than a fossil fuel) for the purposes of the CCL exemption. Legislation will be included in Finance Bill 2008 to provide for the removal of both requirements. The legislation will also remove section 126 of FA 2002 (which inserted sub-paragraph (4A) (coal mine methane to be regarded as renewable source) into FA 2000).

5. HM Revenue & Customs will write to electricity generators and suppliers, and to the Gas and Electricity Markets Authority (Ofgem) and the Northern Ireland Authority for Utility Regulation, regarding the details of the removal of the exemption.

Further advice

6. If you have any questions about this change, please contact the National Advice Service on 0845 010 9000. Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk