With the Energy Technology List set to be withdrawn next year, Pete Mills, Technical Operations Manager at Bosch Commercial & Industrial, discusses how such schemes can help the UK achieve carbon reduction targets.
Since 2001, the Energy Technology List (ETL) has been in place to encourage businesses to opt for energy efficient plant and machinery products. Part of the Enhanced Capital Allowance (ECA) tax scheme, it means businesses are able to claim 100% first year capital allowance on a product if it is on the ETL at time of purchase.
Bosch Commercial & Industrial has 18 heating products on the ETL, including our latest improved and innovative GB162 range, and we have always been supportive of the list. In particular the fact it actively encourages businesses to opt for more efficient products is something that is more essential now than ever.
However, the Government announced last year that the ECA will be shelved in April next year. So what will replace it?
Goodbye to ETL
I think honestly the ETL has run its course. Over the years there has been steadily less demand from customers and business owners for ETL-accredited products.
However, there are still positives to choosing products on the ETL in the short term, in particular for smaller companies that would benefit from the financial savings. Businesses can take advantage of the ETL until next April and I’d strongly advise those looking to replace or improve their heating systems to use this small window of opportunity and make the most of it whilst it lasts.
Sadiq Khan, the Mayor of London, recently announced he will be scrapping the capital’s Cleaner Heat Cashback Scheme. This was originally put into place to incentivise small businesses to replace old boilers with more efficient systems. However, the pick-up from the scheme was below expectations and unsurprisingly the Mayor is looking to place that investment in other areas.
It would seem the Cleaner Heat Cashback Scheme and ETL have experienced the same demand issues recently and, although ETL may continue to exist, it would be more of a reference point for advice. It’s doubtful that new technology would directly link to it after next year and we may even see the list gradually wither away. What is certain, though, is that a new scheme or initiative is needed to fill that gap
Hello to the IETF
The Industrial Energy Transformation Fund (IETF) is looking to be a proposed £315 million scheme that will support businesses that have high energy use.
Ahead of a consultation, the Government expressed that this will look to cut bills and emissions through increased energy efficiency and help large companies transition to a low carbon future through the use of lower carbon energy and processes.
However, efficiency can only take us so far and ultimately there needs to be a fundamental shift to a decarbonised gas network if we are to hit the new carbon-free targets for these industrial applications. In short, the Industrial Energy Transformation Fund is another response to the urgent need for decarbonisation. It is a good idea in essence because it could help achieve better results than perhaps the ECA has in recent years.
Of course, in an ideal world it would be good to have seen the ECA continued so smaller businesses could continue to benefit financially for doing their part in tackling climate change.
However, by targeting real high-energy users and energy intensive sectors, the Industrial Energy Transformation Fund will be able to make inroads into increasing industry efficiency and reducing the carbon emissions, particularly as we look towards Net Zero by 2050.
