Connect with us

Hi, what are you looking for?



“Crazy” Legal Action Threatens Green Deal Scheme

The UK’s groundbreaking £600 million Green Deal scheme is under threat after the European Union confirmed it would mount a legal action against it.

However, the decision to challenge the Green Deal scheme in the courts has been branded as “crazy,” with politicians and business leaders from across the EU condemning the decision.

Green Deal housing schemeAt the heart of the dispute is the UK’s long-standing commitment to charging a reduced rate of sales tax on energy-efficient materials used in the construction industry. Most items in the UK attract a sales tax rate of 20%, but the Green Deal, unveiled in October 2012, said that a reduced rate of 5% would be chargeable for energy-efficient building materials.

However, the EU says that this is against its rules, which allow a reduced rate of sales tax for social schemes but not for environmental ones. It also claims that a 75% reduction in the sales tax charged is not the best way to promote the use of energy-efficient goods.

The Green Deal scheme was brought into effect by the Energy Act 2011. This allows landlords and homeowners to make environmentally friendly modifications to their properties without paying upfront costs.

Instead, Greed Deal providers, including traditional finance companies, would meet the initial cost and the landlord or homeowner would repay the debt through savings on their electricity bills.

Several energy efficiency schemes, such as micro generation, already attract a 5% sales tax in the UK. One of the reasons for expanding the scheme to general energy-efficient building materials was to ensure the repayments to Green Deal providers would remain below the savings made.

The EU has long accepted homemade renewable energy in Britain as a social benefit, which is expected to be a key part of the UK’s defence against the legal action, as is the observation that other countries (including France) also have a reduced 5% sales tax on green building renovation.

Image Credit: My neighbourhood (some rights reserved)

Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Written By

is a seasoned sustainability journalist focusing on business, finance and clean technology. His writing's been carried by a number of highly respected publishers, including The Guardian, The Washington Post and Scientific American. You can follow him on twitter as @britesprite, where he's one of Mashable's top green tweeters and Fast Company's CSR thought leaders. Alternatively you can follow him to the shops... but that would be boring.


You May Also Like


I’ve noticed that a lot of new electric vehicle models have been marketed for use as emergency services vehicles in the past year. It...

Clean Transport

Originally posted on EVANNEX. By Charles Morris It sounds like the perfect plot for a conspiracy thriller: the giant oil companies are buying up electric vehicle...

Clean Transport

The move aims to drastically increase the rate at which charge points are being built so the UK can hit its 2030 target for...


The UK  auto market, Europe’s third largest, saw plugin electric vehicle share of 18.3% in August 2021, up 1.9x from 9.76% in August 2020....

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.