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The Machine Costs €200,000, but Is the Full €200,000 Eligible for IVACE 2026 Funding?
- 28/09/2026
- Aids
A company may invest 200,000 euros in a new energy-efficient installation and discover that this amount does not necessarily match the investment on which the IVACE 2026 energy efficiency grant will be calculated. The key is to distinguish between the project price, the eligible investment and the actual eligible cost. And, in many cases, a fundamental concept comes into play: the reference investment.
By Ana González, CEO and Agricultural Engineer – Industrial consultant in energy efficiency and grant management at AGB Ingeniers
When a company shows us the quotation for a new machine, the first question is usually quite logical:
“If this installation costs 200,000 euros and improves energy efficiency, is the grant calculated on the full 200,000?”
My answer is: not necessarily.
And understanding this now is particularly important. The IVACE 2026 call remains open until 29 October, but it is not advisable to reach the final weeks assuming that the purchase price and the eligible cost are automatically the same amount.
Purchase price, eligible investment and eligible cost are not always the same thing
This is where confusion often begins.
We may have:
Project price: what the company will ultimately pay.
Eligible investment: the items that may form part of the project under the conditions of the call.
Eligible cost: the amount ultimately considered to be linked to the energy efficiency improvement and to which the corresponding aid intensity is applied.
All three figures may be the same.
But they can also be very different.
IVACE establishes that the additional investment costs necessary to achieve a higher level of energy efficiency are eligible. To determine these costs, the call provides for different situations.
Case 1. The entire investment is intended exclusively to save energy
This is the simplest scenario.
If we can clearly identify that the investment is made solely to improve energy efficiency and there is no lower-efficiency alternative investment with which it would be reasonable to compare it, the eligible cost may correspond to the total eligible investment costs.
Imagine, for example, an action specifically designed to recover energy that was previously lost in the process.
If its sole purpose is to achieve those energy savings and it meets the other requirements of the call, we may be in a scenario where the entire eligible investment can be considered an eligible cost.
But not all investments are like this.
Case 2. The company had to invest anyway
This is probably the most interesting scenario.
Imagine an industrial company that needs to replace a machine.
The current one has reached the end of its useful life and the company is going to buy another one regardless of whether or not a grant is available.
It has two options:
- a conventional solution costing 150,000 €;
- a high-efficiency solution costing 200,000 €.
The company decides to purchase the second option because it consumes less energy.
We might think:
“The new machine costs 200,000 €, so I have 200,000 € of eligible costs.”
But the logic of the call may be different.
IVACE establishes that, when there is a similar but less efficient investment that could credibly have been made without the grant, it must be used as the reference investment. The difference between the two investments determines the cost associated with the energy efficiency improvement.
In our example:
Efficient machine: 200,000 €
Reference investment: 150,000 €
Difference: 50,000 €
Those 50,000 euros would represent, in simplified terms, the additional cost associated with achieving a higher level of energy efficiency.
And that difference completely changes the way the investment should be interpreted.
What exactly is a reference investment?
The short answer would be:
The reference investment is a similar but less efficient alternative that the company could credibly have carried out without receiving the grant.
It does not mean artificially searching for the cheapest machine on the market.
It must be a technically reasonable alternative for that company, that process and that production requirement.
This is an important distinction.
We are not simply comparing two quotations.
We are trying to answer one question:
What would the company reasonably have done if the IVACE grant did not exist?
And, from there, identify what part of the additional investment is genuinely related to achieving greater energy efficiency.
The 200,000 € example explained in thirty seconds
Suppose an industrial company needs to replace a compressor.
A conventional solution suitable for its needs costs 120,000 euros.
The company considers another, more efficient solution costing 160,000 euros.
If the first option constitutes a credible reference investment, the energy efficiency improvement involves an additional cost of:
160,000 € − 120,000 € = 40,000 €
Therefore, although the company will spend 160,000 euros, the analysis of eligible costs could focus on those additional 40,000 euros linked to achieving greater efficiency.
Naturally, each application must be analysed individually and it must be verified which items actually meet the requirements established by IVACE.
What happens if we do not use a reference investment?
The call provides for another possibility.
Eligible costs may be determined without identifying a counterfactual scenario.
In that case, the investment costs directly linked to achieving a higher level of energy efficiency may be considered, but IVACE establishes that the applicable aid intensities are reduced by 50 %.
This point is important because we should not assume that avoiding comparison with a reference investment automatically allows the entire project to be subsidised under the same conditions.
The way the costs are calculated also affects the aid intensity.
Not everything included in a quotation necessarily forms part of the eligible investment
There is a second review that we also need to carry out.
Even if we have correctly determined which part of the investment corresponds to the energy efficiency improvement, we still need to check which items are eligible.
The IVACE Grants include, among others, certain costs directly associated with the project such as equipment and auxiliary installations, pipes, electrical lines, valves and connections, assembly and commissioning, technical projects, site supervision, strictly necessary civil works, transport, technical assistance and certain legalisation costs.
By contrast, items such as VAT, financial expenses, in-house personnel, buildings and land, second-hand equipment, or dismantling the existing installation and crane services for its removal are excluded.
In addition, the call only considers projects with an eligible investment exceeding 10,000 euros.
That is why I would not start by calculating “how much grant will I receive?”
When we analyse a project at AGB Ingeniers, I believe it is more useful to follow a different order.
First, we need to understand what the company actually wants to do.
Then, determine whether the investment would have been made anyway without the grant.
Next, assess whether there is a technically credible reference alternative.
Only then can we correctly define which part of the action is related to the increase in energy efficiency.
After that, we can talk about aid percentages.
Doing it the other way around can lead to incorrect expectations.
A company may initially think it has a 200,000-euro eligible project and later discover that the cost specifically associated with the energy efficiency improvement is much lower.
The opposite may also occur: an action designed exclusively to reduce energy consumption may have a much more direct relationship between the investment made and the eligible cost.
The supplier's quotation does not replace the technical analysis
This is another point that I consider important.
A quotation tells us how much a machine costs.
It may tell us its power, performance, estimated consumption or technical characteristics.
But normally it does not determine on its own what the eligible investment is under IVACE.
To determine that, we need to understand the baseline situation, the company's needs, the possible alternatives, the energy savings and the nature of the investment.
That is why the analysis should be carried out before submitting the application and, preferably, before the investment decision has been completely finalised.
The right question is not how much the machine costs
When a company asks us:
“The machine costs 200,000 euros, how much grant funding will I receive?”
I would first ask another question:
“What part of those 200,000 euros actually represents the additional effort required to achieve greater energy efficiency?”
This apparently small difference in how the question is framed can completely change an application.
And, with only a few weeks remaining before the call closes, it is a calculation that should be clarified as soon as possible.
Frequently asked questions about the reference investment under IVACE 2026
If a machine costs 200,000 euros, is the full 200,000 euros eligible for funding?
Not necessarily. It will depend on the nature of the investment and whether there is a less efficient reference alternative that the company could have implemented without the grant.
What is a reference investment under IVACE 2026?
It is a similar investment with lower energy efficiency that could credibly have been carried out without receiving the grant. The difference in cost compared with the more efficient solution may determine the eligible cost.
Can the full cost of an investment be eligible?
Yes, for certain clearly identifiable actions intended solely to improve energy efficiency and where there is no less efficient counterfactual investment, the eligible costs may correspond to the total eligible costs.
What happens if no reference investment is identified?
IVACE allows costs to be determined without a counterfactual scenario, but in this case the applicable aid intensities are reduced by 50 %.
Is VAT part of the eligible investment?
No. VAT and, as a general rule, licences, fees, taxes and other levies paid are not considered eligible investment.
What is the minimum eligible investment?
Projects must exceed 10,000 euros of eligible investment.
Until when is the IVACE 2026 call open?
The deadline is 29 October 2026. If the available budget is exhausted beforehand, IVACE states that subsequent applications may continue to be registered until that date on a provisional reserve list.