What are green taxes?

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What are green taxes?

Green taxes are the system of fees, contributions and incentives that encourage businesses to use less energy, reduce their carbon footprint and generally treat the environment more kindly. 

There are green taxes that affect domestic energy users too, for example feed-in tariffs on solar panels, while some green taxes are not related to energy, such as landfill taxes on commercial waste.

Some work by punishing poor behaviour, by charging an extra tax, fee or duty on excessive energy consumption, harmful environmental emissions of excess waste sent to landfill.

Others incentivise good behaviour by offering a discount or the ability to sell any spare capacity to other businesses, as in the case of carbon trading and offsetting.

Together, green taxes have a common aim to improve environmental performance, cut carbon emissions and carbon footprints, improve sustainability and resource security, and generally incentivise businesses to operate as efficiently as they can.


Green taxes and energy discount schemes


As mentioned, green taxes are not necessarily about charging businesses more – they also incentivise you to make savings, and energy discount schemes are a good way to do that.

Climate Change Agreements, for example, offer discounts on the Climate Change Levy, so if you are in an energy intensive industry, you do not have to pay as much in tax for the electricity and gas you use.

There are also compensation schemes to offset your costs under the Renewables Obligation and Feed-In Tariffs, which can save around 15% on electricity bills too.


Green taxes and mandatory energy schemes


Mandatory schemes like the Carbon Reduction Commitment and Energy Savings Opportunity Scheme for large organisations are closely connected with the amount you pay in green taxes.

The CRC requires you to monitor carbon emissions and purchase allowances for each tonne, incentivising better record-keeping and carbon reductions by applying a direct financial impact to doing so.

ESOS incentivises you to use less energy by identifying ways to optimise your premises, processes and business transport from company cars to delivery fleets.


How Envantage can help with green taxes


Envantage can help you to understand your commitments under all of the different environmental schemes that currently apply to businesses of all sizes, and to identify your exposure to green taxes and tariffs.

We can carry out the necessary audits under ESOS and other initiatives that require you to benchmark and report your emissions and energy usage, as well as advising on green energy procurement to reduce the level of green taxes you have to pay.

To find out more, call Envantage today on 0800 054 2577 or email savings@envantage.co.uk to speak to a member of our experienced team.

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