Policy review of Energy Investment Allowance 2012-2017

The Energy Investment Allowance scheme (EIA) is a tax scheme designed to improve companies’ energy efficiency by accelerating market introduction of innovative machinery and equipment that is more efficient than that currently in place. The categories of machinery and equipment eligible for the scheme are listed in the so-called ‘Environmental list’. This scheme is part of the government’s efforts to achieve the energy-efficiency targets set for 2020. Every five years, subsidies grounded in legislation are subject to a review. This EIA review covers the period 2012 through to most of 2017 and focuses on the efficacy and cost-effectiveness of the EIA is achieving its stated aims over this period. Besides providing accountability for the policy, this kind of study can also identify ways to improve the efficacy and cost effectiveness of the EIA in the future.