Monthly Archives: January 2019
Following the release of the new financial budget back in October 2018, sustainability professionals may have been left feeling let down at the lack of discussion on environmental issues during Phillip Hammond’s budget speech.
After a closer look at the budget, Mainer Associates would like to discuss two significant changes to public spending within the energy sector:
- The end of Enhanced Capital Allowances and first year tax breaks for technologies on the Energy Technology list and Water Technology List from April 2020.
- Savings from this scheme will be reinvested into the Industrial Energy Transformation Fund.
The new budget has a clear focus on energy efficiency. The government feels there are better ways to improve uptake of energy efficiency technologies and support large business in reducing operational energy demands and costs.
The enhanced capital allowance (ECA) scheme currently allows large companies and corporations to claim 100% of costs for investments in certain plant and machinery, against their taxable income. The scheme is applicable to environmentally beneficial technologies listed on the Energy Technology List (ETL) and the Water Technology List (WTL). The ECA scheme is a great incentive for companies to invest in energy efficiency and low carbon heating and cooling systems. Tax breaks on such technologies embody clear benefits for positive economic growth whilst reducing environmental impacts.
The government plans to remove these allowances for a large range of technologies on the two lists. This will affect businesses who invest in energy efficient plant and machinery which currently qualify for first year tax credits. Bigger companies with larger revenue may still be eligible for tax relief under the annual investment allowance (AIA) at up to £200,000 per annum.
Click here to find out if your technologies are eligible before April 2020.
A positive step or missed opportunity?
The government has opted to invest £315m into the Industrial Energy Transformation Fund. The primary purpose of this fund is to reduce emissions from energy intensive businesses. The government feels this fund will provide better ways than ECAs to achieve the transition to a low-carbon economy. The fund will assist large businesses to decarbonise their operations through increased energy efficiency initiatives and technologies. The specifics on how this will be done are yet to be fully revealed by the government.
The Industrial Energy Transformation Fund (IETF) is planned to run for five years and has received positive and negative responses from sustainability and energy intensive industries. The fund should increase the number of energy efficiency projects that are financially viable for businesses and help industrial-scale energy bill payers, remove costs and emissions.
However, there will be definite losers following the end of ECAs with the new fund arguably too focused on large corporations. There will be firms that previously benefited from tax breaks which will not be eligible for new funds due to the size of their operations. Furthermore, the five years allocated for the scheme and current lack of details on how funds will be used does not offer certainty to big businesses.
Other critics argue the government has missed another clear opportunity to make positive and significant investments into renewable energy industries and technologies. They suggest the new budget allocation for investment in decarbonisation focuses too much on energy efficiency and not enough on renewables. The word ‘renewable’ does not feature once in the Budget!
As some of you may be aware, there are currently exciting times ahead for Mainer Associates with the development of a new personalised office space for our growing company.
In preparation for the move, the team wanted to take the opportunity to look at our own operations and ensure sustainable principles were at the core of our new commutes.
The company has invested in an electric vehicle for employees to use for travelling to and from work and to attend meetings within the local Manchester area. The vehicle has zero emissions at the point of use and offers and ideal mode of transportation for Mainer Associates employees.
Mainer Associates feel it is important employees can travel to work with ease and it was clear car travel was going to be the easiest method of transport to travel to the new office. However, the embodied impact of our operations was going to significantly increase – an electric vehicle was an easy choice!
The electric vehicle market has seen continued growth in recent years with charging infrastructure also becoming increasingly widespread throughout UK cities. In 2017 sales of electric vehicles passed the million mark, globally (Mckinsey).
In the UK, the government is now offering grants to those wanting to purchase a new low-emission vehicle to help incentivise uptake in sustainable transport. It’s important to provide consumers with opportunities to make the shift away transportation based on fossil fuels, especially for single-person journeys. For most consumers, price is the key influencer, and in a market where prices on new electric cars are notoriously high, this is a positive step.
Check out information on the governments’ grants here.
Whilst anyone can get a private charging point installed at their home, the UK also has a promising public network of electric chargers. These vary between fast and rapid charger types and most are free! Others charge per kWh used. The UK has invested 400million into the charging infrastructure investment fund and aims to support businesses to build charging points, promote jobs in the industry and encourage private ownership of electric vehicles, giving consumers confidence in the practicalities of owning an electric car.
Mainer Associates currently utilise a private charge point at our new office and the Greater Manchester Electric Vehicle (GMEV) charging network. The GMEV charge points are quick and easy to use. With the ‘charge your car’ mobile app you can see which charge points in your local area are available. You simply plug in your car and use your RFiD card to start charging!
The GMEV network is a great asset to the city in moving towards a low-carbon economy. In 2018, Transport for Greater Manchester were granted a further £3million for an additional 48 dual bay rapid charging points. This a fantastic move for the city and demonstrates the local government is improving EV infrastructure and incentivising up-take of low-emission transport.
Mainer Associates regularly work on developments within large-scale business parks. The asset managers of these business parks often implement car share programmes for tenants and employees to use via online registration.
We have applied these initiatives to our own commuting and travel to and from the new office. Our employees currently practice car shares throughout the week meaning the environmental and social benefits of a zero emissions vehicle are distributed throughout the company.