New technology application

Procedure for the Inclusion of a New Technology in the Enhanced Capital Allowance Scheme

To help you with your application there are some online application demonstrations that will show you the process and how to use the website. Click here to view the demonstrations.

Introduction

The Government currently supports the following categories of technologies within the ECA scheme for water:

• cleaning in place equipment
• efficient showers
• efficient taps
• efficient toilets
• efficient washing machines
• flow controllers
• leakage detection equipment
• meters and monitoring equipment
• rainwater harvesting equipment
• small scale slurry and sludge dewatering equipment
• vehicle wash water reclaim units
• water efficient industrial cleaning equipment
• water management equipment for mechanical seals
• water reuse
  

Please see the Energy ECA site www.eca.gov.uk for technologies included under the Energy Technology List. It is the Government’s intention to review categories and technologies on an annual basis subject to satisfactory methods of certification and identification, cost effectiveness and controls on Exchequer costs. Additional categories and technologies may be added to the scheme.

The information presented here provides guidelines for companies or associations who wish to put forward proposals for the inclusion of other categories or technologies.

Making A Submission

The submission should demonstrate the following:

1. The technology offers significant water savings or water quality enhancement over current practice.
   This will be judged on a case by case basis however proposals should provide anticipated water savings.  Independent evidence would be valuable;
   
2. There are widely used or accepted test methodologies that could be used to compare the performance of a range of products and hence be used by Defra to determine a threshold level for support and also by manufacturers to prove performance upon application;
   
3. Support for the technology would increase its market penetration.
   A major obstacle to the uptake of the product should be price (however it is accepted that there may be other obstacles, e.g. lack of knowledge or conservatism by end users);
   
4. It is easy for taxpayers to identify whether an individual product is eligible.
   This can be done in numerous ways, for example by listing approved products as is done for efficient toilets, by asking end users to submit designs for expenditure on systems as is done for CHP on the Energy Technology List or by providing the end user with a detailed product description that they can compare their purchases to as in the case of support for lighting;
   
5. It should meet the Government’s other environmental objectives, e.g. it should not substitute water use for that of a hazardous chemical;
   

6. The technology should be classed as plant and machinery under the Capital Allowances Act. 
   Capital Allowances are given to businesses that invest in plant and machinery, normally at a rate of 25% on a reducing balance basis. The Enhanced Capital Allowances scheme provides 'Enhanced' Capital Allowances to companies that invest in water saving technologies that are supported by the scheme at a rate of 100% in the first year. Hence in order for a technology to be supported by the scheme it must be plant and machinery. Your local Inland Revenue office will be able to advise you on the classification of a technology.

7. State Aids issues must also be considered when proposing new technologies. Technologies included in the ECA scheme must be as broadly applicable across as many sectors as possible to avoid conflict with current EC State Aids rules. Any technology that is sector/region specific would have to be approved by the European Commission.
   

Whilst Defra will accept proposals from either individual companies or associations, those from associations will be looked upon more favourably as it suggests support from the whole industry. Submissions should suggest possible future categories of technologies for consideration, not specific products, as Defra wishes to encourage innovation from manufacturers and the reduction of water consumption and the enhancement of water quality by end users.  

Proposals for new technologies must also fit in with the Budget timetable, which means that they must reach Defra by the summer preceding the Budget.

Next Steps

Defra will consider and respond to all submissions. In some instances Defra may wish to proceed further with the development of the proposal. In that case, Defra will expect to work closely with the proposer and stakeholders to establish the following essential information:

• Technical definition of technology
• Evidence of classification as 'plant and machinery'
• Methods for comparing performance of products with same technical definition
• Performance level at which 100% capital allowances would be due
• Predicted water savings or water quality improvement over a 10 year period assuming suggested eligibility threshold level 
• Predicted expenditure on products qualifying for 100% allowances
• How taxpayers will be able to identify qualifying products
• Issues surrounding EC State Aid rules.
  

The suitability of support for all technologies supported by the scheme is examined on an annual basis. Stakeholders are therefore expected to be able to provide annual cases for the continued inclusion of technologies.

There is no limit to the number of times a technology can be proposed.

If you wish to submit a proposal for a new technology for Defra to consider in a future examination of the Water Technology List, please use the online application form below or send to:

ECA Water Scheme - New Technology Proposals
Envirowise
Glengarnock Technology Centre
Caledonian Road
Lochshore Business Park
Glengarnock
Ayrshire
KA14 3DD

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