Climate Change Levy: Incentive for Businesses

To meet requirements of the Kyoto Protocol, the UK Government introduced an energy tax and an energy-efficiency incentive scheme. The goal is to achieve a reduction in total greenhouse gas emissions.

The UK figure is some 12.5% reduction in greenhouse gas emissions in the period 1998 - 2012 from a 1990 baseline. To discourage energy wastage, the Government introduced the Climate Change Levy (CCL), which is an energy tax that became effective on 1st January 2001.

All businesses and public sector organisations in the UK pay the levy via their energy bills. To encourage firms to make energy saving investments, the Government introduced an incentives scheme called the Enhanced Capital Allowance (ECA).

Under this scheme, expenditure on technologies and products on the Energy Technology List can qualify for 100% first year tax allowances.

The Energy Technology list of equipment and criteria can be found at: www.eca.gov.uk. The list is dynamic, with new technologies being added as and when they are approved.

Categories of equipment you can claim for include:

• Heat pumps and refrigeration equipment
• Air to air energy recovery
• Variable speed drives

More about the incentive scheme...

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