Belgian government energy measures come into force on Friday

Belgian government energy measures come into force on Friday
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A whole series of measures to soften the impact of rising energy prices on customers and businesses in Belgium will come into force on Friday, including the reduced VAT rate on gas, solar panels and boilers.

A recent survey from various media outlets showed that almost half of all people living in Belgium are afraid of not being able to pay their energy bills as a result of the ongoing energy crisis, which was exacerbated by Russia’s invasion of Ukraine.

In previous weeks, the government has discussed and approved a package of measures to reduce the cost of energy, which will come into force on Friday. Prime Minister Alexander De Croo has already said the measures are "no miracle cure" but are necessary until a long-term solution is found.

The European Commission on Friday also outlined options for mitigating high energy prices, namely with common gas purchases and minimum gas storage obligations.

Reduced VAT

After reducing the VAT on electricity bills from 21% to 6% from 1 March, a measure that will remain in force until the end of September, the government announced it would also be lowering the VAT on natural gas to the same extent, from 1 April 2022. This reduction will also apply to heating networks.

The discount may not show up on advance bills yet, as suppliers need time to implement the measure, but will be settled later in the final invoice, as assured by sector federation Febeg following the lowering of VAT for electricity.

From Friday, a 6% VAT rate will also apply to the purchase and installation of solar panels, heat pumps and solar water heaters. This measure is already in place for homes that were built more than ten years ago, but it will now be extended to newer homes until the end of December 2023.

This reduction is part of the overall raft of measures implemented by the government and is specifically aimed at helping individuals and households make their homes more energy-efficient, as well as to reduce energy dependency on fossil fuels.

"For many families, stepping into the energy transition is still the very last thing on their minds. But it is precisely the way to structurally reduce the energy bill," said Finance Minister Vincent Van Peteghem.

"That is why we must not scare people off today. We must guide them: where are we going and how do we go about it? With these measures, we offer them direction and clarity, and that includes clear conditions."

The conditions for benefiting from the VAT reductions can be found on the website of FPS Finance.

Alternative fuels

From Friday, petrol station owners who offer three or more types of fuel in their petrol station must post notices from April with the average cost per 100 kilometres for each type of fuel, as part of the European Union's incentive to encourage customers to switch to more eco-friendly cars that run on alternative fuels.

Belgium previously announced it will freeze the price of train tickets, meaning it will not implement the 4.5% increases planned for July 2022 to ensure public transport remains accessible. Instead, the national railway operator, SNCB will be compensated for the corresponding amount of €13 million in 2022.

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“More than ever, the train is the solution for green and cheap mobility and it must remain so,” Mobility Minister Georges Gilkinet said. “That way, we can compete even better with the car, which is becoming more expensive due to rising fuel prices.”

Other measures, including lower excise duties on diesel and petrol as well as an extension of the broad social rate have already come into force.

The government has also asked the National Bank of Belgium to analyse the impact on the various sectors in more detail and will consult with social partners about what policy measures can be taken, including with regard to energy bills, based on the findings of this analysis.

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