Flemish tax reform seeks to reduce electricity costs and enhance climate initiatives

Flemish tax reform seeks to reduce electricity costs and enhance climate initiatives

Flemish Government to Shift Taxes from Electricity to Gas in Bid for Green Transition

Starting in 2028, the Flemish government will redirect 362 million euros in taxes from electricity bills to those for natural gas and fuel oil as part of an initiative to lower electricity costs and enhance the region’s green transition. This measure, outlined in Flanders’ updated Energy and Climate Plan, aims to motivate residents to switch to electric vehicles and heat pumps, thus minimizing greenhouse gas emissions. The announcement was made on Sunday by Flemish minister-president Matthias Diependaele (N-VA) and various other ministers, reports 24brussels.

This adjustment is part of the Flemish Energy and Climate Plan (VEKP), which seeks to reduce emissions by 40 percent by 2030 relative to 2005 levels. Currently, emissions have decreased by approximately 33 percent, but to meet EU targets, a reduction of 47 percent is necessary.

Diependaele expressed pride in the plan during its presentation, emphasizing the collaborative effort involved. “If we want to tackle the climate challenges, we will have to do it together,” he stated, noting that coalition partners prioritize both climate commitments and economic and social considerations.

Climate minister Melissa Depraetere (Vooruit) described the package as “strong and ambitious.” A significant component of her portfolio involves eliminating 360 million euros in electricity levies, supported by a 180 million euro offset financed through ETS2 emissions trading to ensure fairness for gas users.

Support for Vulnerable Households and Small Businesses

“The price of electricity is high in Flanders. We are among the highest,” Depraetere noted. “Expensive electricity makes it less attractive to switch to an electric car.” She highlighted the need to stabilize the total energy bill for average gas consumers.

Additionally, a “renovation booster” for social housing will offer interest-free loans to low-income families, along with extra subsidies for heat pumps. The overall social climate initiative allocates nearly 1 billion euros for vulnerable families and small businesses.

Agricultural and Mobility Commitments

In the agricultural sector, minister Jo Brouns (CD&V) announced that 500,000 tonnes of CO₂ will be absorbed by other sectors. A comprehensive, technology-neutral strategy will be developed alongside industry stakeholders. Support will also be provided for greenhouse horticulture. Brouns emphasized the importance of realistic and feasible measures, stating, “No unachievable demands or expensive obligations.”

Mobility minister Annick De Ridder (N-VA) highlighted plans for sustainable transport options that maintain Flanders as a logistics hub. By the end of the year, a new Bicycle Master Plan will be presented, alongside an evaluation of a uniform battery check for used electric vehicles. Adjustments to the kilometre charge for trucks will align with EU regulations, while support for micro-enterprises will facilitate the introduction of 500 additional zero-emission trucks by 2030.

De Ridder also plans to address cycling gaps, encourage cities to green their logistics, and roll out an investment plan for shore power by early next year. The industrial sector will gain improved access to ecological support and greening assessments, with Diependaele underscoring the virtue of the ecoboost loan of up to 150,000 euros for self-employed individuals and SMEs, alongside the “Climate Leap” initiative that finances impactful green investments through competitive tenders.

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