Understanding R&D tax credits in the water industry3 min read
Water efficiency is an issue for many sectors, making the water industry one of the nation’s most vital. This means that plenty of retailers and producers are looking for ways to be more water-efficient and improve the ways that they utilise their resources. Better waste management is great for the environment, but it unquestionably also saves money.
The high price of wastewater
Companies are not only charged for the volume of wastewater they discharge but are also charged on criteria such as the Chemical Oxygen Demand (COD) and the suspended solids in the effluent (SS). Investment in R&D to combat wasted water is, therefore, a high priority. Alongside this, there is also a heavy onus upon companies to create ways to become more environmentally friendly, and have less of a carbon footprint.
The benefits of innovation
As well as cutting bills from wastewater, investment in R&D for water management can be subsidised by government funding. There are abundant HMRC guidelines on what makes a company’s project eligible for R&D tax credits.
R&D tax credits are claimable as either Small and Medium Enterprise (SME) R&D Relief, or Research & Development Expenditure Credit (RDEC), depending on the size of your company and whether you were subcontracted to do this work by a large company.
Understand in more detail what HMRC’s requirements are when it comes to applying for government R&D tax credits by reading our article here.
The importance of R&D in water
Water companies are constantly pushing the boundaries and innovating, due to the financial penalties on waste mentioned above. This is alongside the climate impact of which all businesses are now more and more aware.
The water industry is heavily regulated – in terms of charging customers, discharging water into the environment, and meeting water quality standards. That doesn’t mean R&D isn’t possible, or even crucial. Water industry R&D tends to drive for operations and capital cost savings or reducing operational risk, as opposed to driving for licensing new tech or ensuring commercial exploitation.
Most companies are driven into R&D to:
- Reduce their use of chemicals
- Reduce their energy consumption
- Improve their operational reliability
- Reduce their risk
- Understand and maintain their existing assets
- Lower their whole-life cost solutions for water and wastewater treatment
Recent innovations in water R&D
Professor Lars Angenent from the University of Tübingen’s Centre of Applied Geosciences found a way to utilise the drastic amount of acid whey wasted in the dairy industry. For every litre of dairy product made, two litres of acid whey is created, a dairy byproduct. Professor Angenent’s solution was to use microbiome chemicals similar to those found in the human gut to treat the whey. The bio-oil thus created can be used in animal feed, or, subject to further refinement, as aviation fuel.
TO-SYN-FUEL’s EU-funded project transforms wastewater byproducts into green, sustainable fuels. The project saw TO-SYN-FUEL create a new technology called Thermo-Catalytic Reforming, or TCR, converting several types of biomass residues into CO2-neutral liquid fuels and hydrogen.