Carbon Trust Interest-Free Energy Saving Loans
From 1 February 2010, British farmers will be eligible for unsecured, interest-free loans for between £3,000 and £20,000 to help them upgrade to more energy-efficient equipment. The loans are designed to pay for themselves through direct energy savings provided over one to four years – and after the loan is repaid, farmers will make direct savings on their energy costs, as well as cutting the carbon footprint of what they produce.
The loans scheme is part of the Carbon Trust’s Big Business Refit – a nationwide campaign encouraging British businesses to replace old, energy intensive equipment which wastes £3.3 billion a year. The money has been made available from the Carbon Trust’s existing loans fund, which was bolstered by further funding from the Treasury in the 2009 Budget. The loans will be available on a first come, first served basis.
Examples of energy efficiency upgrades which the Carbon Trust loans will fund are:
• Thermal screens, used in greenhouse horticulture, typically cost up to £20,000, and can save over £10,000 / 100 tonnes of CO2 annually
• Milk cooling accounts for one third of the energy consumption of dairy farms. New systems cost £3,000, and save up to £1,000 / 6 tonnes of CO2 a year.
• Insulation • used in field horticulture crop stores, typically costs around £17,000, and saves up to £10,000 / 50 tonnes of CO2 a year.
• Upgrading heating and ventilation controls, in livestock farms, typically costs £3,000, and saves over £4,000 / 23 tonnes of CO2 a year.
• Grain drying humidity controls, used in arable farming, typically costs £3,000, and saves around £1,500 / 10 tonnes of CO2 a year.
The new funding has been provided to help the farming sector to meet the carbon reduction aims laid out the Government’s Low Carbon Transition Plan. In the plan, the Government announced a target to reduce agricultural greenhouse gas emissions by 3 million tonnes of CO2 equivalent annually by 2020. Using the loans scheme, the Carbon Trust hopes to provide around 1,000 farmers with £12 million, interest-free, to upgrade old equipment, or purchase renewable energy technologies, which will cut emissions by 25,000 tonnes of CO2 each year.
About the Energy Efficiency Loans scheme
This is an extension of the small and medium business loan scheme as expanded by Budget 2009 and supported by the Department of Energy and Climate Change. The minimum loan size available is £3,000, and the maximum size, for the farming sector is £20,000. There are no arrangement fees and applying is straightforward.
All loans are unsecured, interest-free and repayable over a period of up to four years. The loans are designed to pay for themselves through energy savings, so once the loan is paid off savings go straight onto the bottom line. On average, farmers are expected to save around £10,000 a year by replacing inefficient equipment.
Energy Efficiency loans are available to businesses meeting either of the following criteria:
• Companies that meet the EU definition of a small or medium-sized enterprise, i.e. companies with fewer than 250 employees and a turnover of less than €50m (around £42m at today’s exchange rate).
• Companies that are not eligible to participate in the CRC Energy Efficiency Scheme , i.e. companies that do not consume more than 6,000MWh of half hourly metered electricity. This typically equates to an annual electricity spend of £500,000.
Farmers will be able to apply for loans from 1st February 2010.
For further information, call Carbon Trust on 01865 885846 or visit www.carbontrust.co.uk/loans
