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DEEP DIVE: A look at the FEA’s ‘Three Point Plan’ for stimulating energy efficient catering equipment sales

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Last month the Foodservice Equipment Association unveiled a series of proposals to support the foodservice industry while pushing the government’s net zero carbon agenda by encouraging the development and sale of more energy efficient equipment. 

Here, we take a more in-depth look at what is entailed in its ‘Net Zero Carbon: A Three Point Plan for Foodservice Equipment’ manifesto.

How it came about

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In June last year, the government unveiled a target to bring all greenhouse gas emissions to net zero by 2050.

The UK has already reduced emissions by 42% while growing the economy by 72% and has put clean growth at the heart of its Industrial Strategy programme.

This could see the number of ‘green collar jobs’ grow to two million and the value of exports from the low carbon economy grow to £170 billion a year by 2030.

Manufacturers and suppliers of foodservice equipment have a role to play in this but the FEA remains concerned that due to the financial impact of Covid-19, operators will not have the liquidity to invest in the equipment that will help reduce energy use and carbon emissions.

It says that it is vital that the momentum of pre-existing EU directives, UK legislation and other carbon-based incentive schemes is not only maintained but developed. This pre-existing legislation includes eco-design and energy labelling measures for refrigeration only.

According to the FEA, there is a significant gap in covering the remaining 70% of energy use in a commercial kitchen and regulation and policy is needed to cover all equipment used in such an environment.

Evidence suggests that restaurants, commercial, and institutional kitchens are amongst the highest energy consumers in buildings, using roughly five to seven times more energy per square foot than office buildings or retail outlets. This is because of the volume of food that is prepared, cooked and served to high numbers of consumers within a defined time period.

FEA is worried that the debt overhang as a result of Covid-19 will inhibit investment and lead to caution relating to R&D investment, with companies needing to see a return to profit before R&D investment can be restarted.

It has come up with a set of three initiatives that are mutually supportive but which can also be introduced individually.

They are designed to address the need to reduce energy and carbon in commercial kitchens while ensuring full alignment with the UK government’s short, medium and long term goals.

1. Manufacturer Tax Credits – focused on the manufacturer

Manufacturer tax credits would be effective for a UK industry facing significant financial challenges, argues FEA.

An appliance incentive would provide ‘per unit’ credits to manufacturers for the production of the most efficient foodservice equipment.

This should cover cooking equipment, warewashing equipment and ventilation systems in addition to refrigeration (which already has a measurement standard).

This will ensure timely action from manufacturers as the credits would be claimed quarterly, at least for the first 12 months.

Such a scheme would encourage manufacturers to produce more of their highest efficiency products for the market and allow them to offer a related discount and promotion of the units at the point of sale.

As these products gain market share, the qualifying specifications can be uplifted, and the next phase of incentives adjusted to the required level.

This effectively future-proofs the development of the scheme and allows it to keep pace with market innovation and product development. This will be effective in encouraging new product development and underpins research and development work, where budgets for this kind of activity are under severe financial pressure.

This will also provide an effective link to the government supported knowledge transfer programmes by facilitating the adoption of technologies from other markets and sectors, something that the FEA has been active in promoting to its members.

The FEA notes that there is significant evidence relating to the value of such a Manufacturers Tax Credit initiative from the Energy Star programme in the USA, where the modelling is aligned to success in the domestic appliance market.

In the commercial foodservice equipment sector there are already standards in place that could be adopted to complement existing standards, such as eco-design and energy labelling for commercial and professional refrigeration products.

Where there are energy related standards in place these should be used as the basis for measuring performance to avoid duplication and the associated costs of additional product testing for manufacturers, suggests the organisation.

Energy efficient alternatives are available for many commercial kitchen products and these could easily be identified by a new UK Energy Efficient Product Label or sector specific label to facilitate promotion of the scheme.

FEA says that a barrier limiting the market adoption of energy efficient models in this category is the higher capital cost of these products.

Manufacturer Tax Credits would therefore increase choice in models and allow for attractive manufacturer-sponsored incentives that close the gap in price between a conventional model and a more energy efficient model.

Success could be monitored by the growing market share of the defined products. Lifecycle energy savings combined with ancillary savings can be offset against the capital cost.

2. Scrappage Scheme – focused on the user

The FEA suggests a funded scrappage scheme is introduced to ensure that operators can invest in more energy efficient equipment.

This scheme can operate independently or in conjunction with the Manufacturer Tax Credit scheme and Energy Technology List proposals.

It would be administered using the existing WEEE Compliance Schemes. The benefit of the scrappage value must be transparent at the point of purchase of the new equipment.

This would be on a like-for-like replacement basis for similar functionality, such as a refrigerator for an approved energy efficient refrigerator.

The government would provide a fee to the operator directly, ensuring transparency and effective monitoring and reporting. This should be after the purchase of the replacement product from an approved product list and can be claimed by the purchaser.

3. Energy Technology List and associated regulation

The FEA says that it is fully supportive of the development of the criteria for qualifying foodservice equipment products.

This could be the basis for assisting with procurement processes in addition to being a portal of equipment that can be purchased to qualify for both the Manufacturer Tax Credit Scheme and the Scrappage Scheme for old equipment.

It can also be the basis of the criteria for government regulation on this matter, relating to purchases for use in government owned and occupied buildings of all types, to ensure that only energy efficient equipment is used.

This has the additional benefit of assisting with compliance of the Energy Performance of Buildings Directive requirements.

While support schemes may be politically preferred compared to government regulation (which requires policing), it will lead the foodservice equipment specification and purchasing process towards the carbon zero 2050 target, according to the FEA.

It can also be a process for other product sectors. Implementation of this option may take longer than the proposals above but might provide the vehicle for ongoing development towards the 2050 target, it adds.

What next?

The FEA is calling for a new generation of policies to achieve the requirements that are aligned to the IPCC Sustainability Goals, 13 of which have a direct effect on the foodservice industry and its equipment supply chain.

It says that the three proposals it has outlined would support the SMEs that make up the supply chain businesses in the sector and these initiatives and policies will support R&D innovation as well as existing sales of product into the market.

It argues that integrated but independently operated schemes will demonstrate joined up governance and implementation, thereby maximising the opportunity for the sector to achieve the required goals.

Radical green plan proposes tax credits for manufacturers that sell energy efficient equipment

Tags : catering equipmentenergy efficiencyFEA
Andrew Seymour

The author Andrew Seymour

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