Levy on gas suppliers
The Green Gas Levy (GGL) places an obligation on all licensed fossil fuel gas suppliers in Great Britain to pay a quarterly levy which will be calculated based on the number of meter points they serve.
The levy rate is set annually by the Secretary of State for Business, Energy and Industrial Strategy and the scheme year runs from 1 April to 31 March. The funds raised will be used to make payments to Green Gas Support Scheme (GGSS) participants for the amount of eligible biomethane they inject into the gas grid. The levy will also cover Ofgem’s administrative costs for running the scheme.
What are the levy obligations?
The key GGL obligations that suppliers must meet are:
- submission or verification of meter point data – this will be used to calculate levy payments and credit cover requirements
- lodging credit cover – this will be drawn on if a supplier fails to meet a payment obligation by the deadline required
- making quarterly levy payments
Should suppliers fail to make a payment, and if there is insufficient credit cover lodged, a mutualisation process may be triggered. This will require non defaulting suppliers to make an additional payment to make up the shortfall.
Key timeframes and actions
We have published an annual scheme schedule which is valid from 1 February 2022 to March 2023. The first requirement that will require action from suppliers is provision of meter point data from 7 February 2022.
The annual scheme schedule sets out an administrative timetable for each year, and provides suppliers with advance notice of key dates including when:
- Meter point data must be confirmed by all suppliers
- Notifications will be issued by Ofgem confirming the value of levy payments due
- Levy payments must be paid by scheme suppliers
- Notification must be provided by a supplier expecting to be provisionally exempt in the next scheme year
We may, if necessary, amend some of the dates within the scheme schedule after it has been published (those described as variable dates within the regulations), and if we do so, we must provide one month’s notice of any change.
The timelines have been set out in line with regulatory requirements and in consideration of the internal processes we must complete in order to administer the levy. The regulations specify that some of these timeframes must be set out for example to ensure we provide adequate notice of levy payments due (minimum 14 calendar days), and to ensure credit cover is in place before the start of the next quarter (must be in place 7 working days before the start of the next quarter).
We’ve published draft guidance on administration of the Green Gas Levy (GGL). This includes detail of the obligations for new, current and former licensed gas suppliers.
We’re releasing procedural guidance in phases and focusing on areas where early insight may be needed. The first phase of draft GGL guidance has been published for comment and is open for comments until 16 December 2021. Further guidance will be published in January 2022.
Ofgem's administration of the associated Green Gas Support Scheme (GGSS) is outlined in a separate guidance document.
See guidance and resources web page for all related publications.