Offering businesses tax relief is the best way to spur them on to improve their energy efficiency, according to the Association for the Conservation of Energy (ACE).

In its response to a consultation on reforms to the business energy efficiency tax landscape – which is being run by the Treasury and the Department of Energy & Climate Change – the trade body said that tax relief would be more effective than supplier obligations or grant schemes.

ACE warned that supplier obligations and grant schemes could be “subject to fluctuation resulting from political decisions”.

The association said that competitive bidding would only incentivise large companies with lots to gain.

Finance directors will pay attention to tax relief

ACE said: “It is important that all types of investment in energy efficiency improvement are incentivised: systems and operational practices as well as individual technologies.

“Tax relief therefore seems to be the best option for most. It is also the most likely to be brought to the attention of the finance director, particularly if details of the available reliefs are included in mandatory reporting.

“It could be linked to certification to ISO50001 standards, since this embeds a culture of continuous improvement.”

> Read ACE's consultation response