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The study, commissioned by accountancy firm Smith & Williamson and conducted by Bristol Business School, polled the views of more than 100 finance directors, predominantly from small to mid-tier companies across the UK.
The paper's prime aim was to establish levels of awareness of enhanced capital allowances (ECAs).
It claims that the low take-up rate is due to a lack of knowledge about tax breaks and because businesses must go through a complex application process in order to secure the benefits.
Fewer than 50% of businesses were aware that ECAs existed — and more respondents (45%) knew about allowances for thermal insulation than for those on plant and machinery (36 per cent). Only 14% were aware of allowances on the decontamination of land.
Of those businesses that were aware of ECAs but failed to take advantage of them, 13% stated that they had been discouraged from applying because the process was 'too complex'.
Others (50%) believed the allowances were 'not relevant', while some (37%) stated that this type of investment was 'not a priority for their business'.
Mike Lea, partner at Smith & Williamson, said: 'The research has confirmed what we had suspected: there is a worrying lack of awareness of the green tax breaks available, but also a poor number of businesses taking advantage of them.
'There seems to be a sizeable information gap and lack of clarity around the ECAs. This is something that needs to be addressed both by businesses and the Government.'
He added: 'Both the Government and the opposition have put the green agenda and the simplification of tax structures high on their list of policy priorities.
'Rather than using tax as punitive measure to encourage companies to be more green, they should actively promote green tax incentives and make applying for them as simple as possible for time-poor small to mid-tier businesses.
'By not taking up such allowances, businesses are also missing an opportunity to reduce their tax bills and increase their profitability, all of which combines to have an adverse impact on UK plc.
'Businesses are literally wasting tens of thousands of pounds every year by not using the environmental tax allowances.'
