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Call for AD exemption from funding restrictions

An industry association is calling for anaerobic digestion (AD) to be exempted from restrictions on Enterprise Investment Scheme (EIS) funding for renewable energy projects receiving subsidies.

As part of the Autumn Statement, it was announced that renewable energy companies benefitting from Government support will be excluded from EIS funding, the Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs).

The Anaerobic Digestion and Bioresources Association (ADBA) has said that such funding is critical for the AD industry, and without it the potential for the sector to continue to grow will be “severely impeded”.

ADBA is calling for a specific exemption for “higher risk” technologies such as AD. The association understands that more than £130m of potential investment raised under EIS, which could be used for AD, will be lost.

Surveys of ADBA members revealed that at least 25 projects in development, representing 20MW capacity, will be affected by the changes.

Furthermore, the number of projects in earlier stages of planning which would use EIS-qualified funds is likely to be many times larger, said ADBA.

ADBA chief executive Charlotte Morton said: “There’s no doubt that if EIS-qualified funds are disqualified from all technologies claiming Feed-in-Tariffs (FiTs) and Renewable Heat Incentives (RHIs), it will remove a vital funding option for AD.

“This source has been responsible for up to £200m of investment in recent years, so its restriction would severely impede the industry’s ability to maintain last year’s record growth.

“More broadly, it is clear that departmental budgets will be under huge pressure in the next Parliament. With decisions to be taken on the FiT review and the future of the RHI after 2016, this is no time to be adding further uncertainty by scrapping EIS eligibility.”

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