Perhaps the most important point to bear in mind about the ECA Scheme is that
its introduction marks a positive gesture by the government that reinforces
its commitment to helping companies to reduce their impact on the environment.
This point is echoed by Mr Farrington, who describes the Scheme’s introduction
as a ‘good start’, but what is important, according to Farrington, is that,
“We encourage the scheme to be moved on… to be rather more all-encompassing
than it is at the moment."
There is a scheme in France, which Paul Farrington believes goes much further
towards addressing the whole picture. “Our French clients can apply for
grants of up to 40 per cent to cover the costs of the equipment, for installing
air pollution or indeed any other pollution control equipment. But to qualify
for them they have to prove to the ADEME (the organisation that oversees the
regulation) that they have really looked at the whole problem and they have
installed not only the best technology but also the solution that is the most
environmentally friendly.
“As an example, in most regions within France, legislation dictates that
companies must reach an outlet concentration of 50mgC/Nm³ VOC. To get an
ADEME grant you have to install equipment which will achieve a maximum of 20mgC/Nm³
which acts as an additional screw being put on. In the UK’s Scheme so far, there
is no incentive to do that – there is no push, which leaves it in danger of
pushing companies towards compliance with UK legislation, with no additional
push to go for the equipment which uses the least power, or has the greatest
impact on emissions.”
Environmental targets
As a company, Haden Drysys is concerned that the ECA Scheme is only likely to
encourage investment in equipment that a company needs for its own business
use rather than to meet its environmental targets. The decision to procure pollution
abatement equipment will still be driven entirely by legislation or cost incentives
from the Climate Change Levy (CCL). According to Farrington, ECA overlooks the
selection, design and project management that ultimately determines the long
term environmental success of a pollution control project and focuses more on
the technology type itself. He states:
“What we are looking to do is to enhance the Enhanced Capital Allowance
Scheme. To provide a driving force to push companies into looking much deeper
into analysing more and hopefully to go in for more sophisticated equipment,
which may cost a little more initially, but will make huge environmental improvements
and lead to greater cost savings over time.”
A major consequence of the current scheme’s limitations according to Paul Farrington,
is that it does not require the consumer to consider environmental factors when
purchasing equipment within the scheme. For example a company may see the benefit
of procuring a technology such as Combined Heat and Power to provide cost-effective
heat/power but will not necessarily purchase the system with the least impact
upon the environment.
Money is another concern, as Farrington describes: “The current marketplace,
particularly manufacturing industry has become increasingly price sensitive,”
he states, “I would like to see a regime which helps people have a far
better understanding of what is available and go for technology that meets all
their objectives, not to go for low capital costs alone.”
Haden Drysys has proposed an alternative solution to ECA that it feels better
achieves the understood objectives of ECA. It suggests calling it Environmental
Compliancy Award (ECA) to keep the established connection between tax incentive
and environmental issues. This scheme recognises the benefits of providing a
solution rather than focusing on a specific technology or product. The proposed
scheme would reward companies who officially demonstrate the achievement of
compliance or emissions improvement (if previously compliant).
Continuous improvement
Under an Environmental Compliancy Award a company would record, in a traceable
and transparent manner, the costs incurred in analysis of its emissions, procurement
of an abatement system and demonstration of compliance. Some form of rebate
would be provided but similar benefits could be claimed if the consumer continues
to upgrade their system to improve their emissions further or improve energy
consumption.
Haden’s proposed scheme offers much food for thought in the ongoing debate
about Enhanced Capital Allowances. If the existing Scheme is to work, it needs
a strong focus with clearly defined goals. Also, the points of view of environmental
technology suppliers and manufacturers, as well as the manufacturing industry
that uses the technology, need to be taken into account by those who control
who is to benefit from ECAs.
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