Government confirms support for ETL

UK: The UK government says it has no plans to stop supporting the Energy Technology List despite its decision to end enhanced capital allowances (ECA) in 2020.

The ECA scheme was introduced in 2001 and allows business to write off the entire cost of any product included on the Energy Technology List (ETL) against taxable profits in a single tax year.

The ETL includes energy-efficient plant and machinery, such as boilers, electric motors, and air conditioning and refrigeration systems that qualify for full tax relief.

In the budget statement on Monday, chancellor Philip Hammond announced that the ECA scheme will end in April 2020, casting doubt on the future of the Energy Technology List.

The Department for Business, Energy and Industrial Strategy sought to reassure manufacturers. A spokesman told the Cooling Post: “The Government has no plans to stop the Energy Technology List, and remains committed to its proposal made in the Clean Growth Strategy to ensure incentives for investment in energy efficiency are regularly reviewed.”

Paul Huggins, ETL programme director at the Carbon Trust, the body responsible for operating the scheme pointed out that the ECA Scheme and the ETL perform different functions. “ECAs provide an incentive for businesses to help strengthen the case for buying energy efficient equipment through providing a tax break. The ETL enables any organisation – including the public sector – to cost-effectively and credibly identify higher performing energy efficient equipment,” he explained.

Although the ETL has been a key element to enable the ECA Scheme, it is also seen as an important and valuable tool in itself that organisations of all sizes regularly use to identify higher performing energy efficient equipment. There are currently 15,221 products listed on the ETL.

As a regularly updated resource, consultants are known to use it as a “buyers guide”. In addition, many large enterprises and public sector bodies have embedded the ETL into their procurement processes to ensure they are buying energy efficient equipment that results in lower overall total cost of ownership than alternatives that may come at a cheaper capital cost.

In the budget announcement, the chancellor announced a number of changes to the ETL – including the revision of 18 of the existing categories – to update the ETL criteria to reflect developments in eligible technologies. Subject to Parliamentary approval, these changes are expected to come into force in 2019.

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