Dáil Éireann Debate, Wednesday - 22 September 2021
34. Deputy Michael Moynihan asked the Minister for Finance if he will prioritise the inclusion of lithium battery plant machinery on the triple E register to avail of accelerated capital allowance; his views on the advantages of promoting this technology; and if he will make a statement on the matter. [45460/21]
View answerFinance Act 2008 introduced the Accelerated Capital Allowance (ACA) scheme for Energy Efficient Equipment (EEE). The scheme provides a tax incentive for companies and sole traders who invest in highly EEE. The ACA scheme allows taxpayers to deduct the full cost of expenditure on eligible equipment from taxable profits in the year of purchase. This differs to the standard treatment of capital allowances which are claimed at a rate of 12.5% annually over eight years.
To qualify for the scheme, equipment must fall within one of the 10 classes of technology specified in Schedule 4A of the Taxes Consolidation Act 1997. In order for equipment in these classes of technology to qualify for the scheme it must also meet detailed energy efficiency criteria as set in statutory instrument by the Minister for the Environment, Climate and Communications with the approval of, and after consultation with, the Minister for Finance. A statutory instrument is also required to update such criteria. The SEAI maintains the listing of eligible products on its Triple E Register, and plays a key role in the process for setting the eligibility criteria by undertaken periodic technical reviews of the technology groups.
Last year my officials, in conjunction with officials in the Department for the Environment, Climate and Communications (DECC), the SEAI and the Revenue Commissioners, completed a Tax Expenditure Review of the scheme in accordance with the Department of Finance guidelines for evaluating tax expenditures. This review established that the policy objective of the scheme remains valid and provided evidence of increased uptake of the relief, particularly among micro and small businesses in recent years. Finance Act 2020 extended the end date of the scheme from 31 December 2020 to 31 December 2023. The review also recommended the classes of technology included in Schedule 4A and the existing energy efficiency qualifying criteria be reviewed with a view to updating the criteria to reflect technological advances in energy efficiency.
I am informed by the SEAI that it is possible that the types of machinery referred to by the Deputy may qualify for the scheme under the technology group ‘Electrical Vehicles and Associated Charging Equipment’, which is included in the Class of Technology ‘Electric and Alternative Fuel Vehicles’ in Schedule 4A. Whether or not a specific item of machinery qualifies for the scheme depends on whether it meets the qualifying criteria set for that technology group. If a taxpayer wishes to confirm whether an item of equipment qualifies for the scheme they may consult the SEAI at the following email address: TripleE@seai.ie or (01) 808 2100. Information on the ACA scheme can be found on the SEAI website through www.seai.ie/business-and-public-sector/business-grants-and-supports/accelerated-capital-allowance/.
The SEAI is the body responsible for setting the eligibility criteria and maintaining the register of eligible products for which the incentive can be claimed. The SEAI is currently undertaking a technical review of the scheme which includes the detailed energy efficiency criteria equipment must meet to qualify for the scheme. I am informed by my colleagues in DECC that the SEAI intend on engaging with industry stakeholders in the coming period during the review process. Through this process stakeholders will have an opportunity to make representations relating to the existing technology groups and propose new technologies.
