Belgium is today an outsider compared to other European countries, with high excise duties on electricity and low on gas. The result is that, according to figures from energy regulator Creg, a kilowatt hour of electricity was 3.8 times more expensive than a kilowatt hour of gas in the first half of this year. In Germany, for example, it is 3.2 times more expensive, in the Netherlands only 2 times more expensive.
This has consequences for the energy transition, where the European member states – within Belgium, these are the regions – have committed to reducing CO₂ emissions from home heating. This requires the introduction of heat pumps, which consume electricity but produce a multiple of the electricity consumed in the form of heat.
Due to the energy crisis, heat pumps have gradually become more popular in Belgium, but taxation still stands in the way. Due to the skewed ratio between electricity and gas, the payback time of a heat pump is very long, if not endless.
Gift to regions
The federal government has now decided on a measure during the budget consultations to slowly make that relationship healthier. Half of the excise duties on electricity will be abolished in three steps between 2028 and 2032. The loss of income for the state is recovered from the gas bill.
In concrete terms, this means that a family with an average consumption of 3,500 kilowatt hours per year pays 83 euros less excise duty on electricity per year. Depending on their consumption, families will see these excise duties reflected in their gas bill. The intervention is a gift to the regions, which now have to subsidize heat pumps to make them more attractive, even if VAT remains at 6 percent.
However, the measure comes very late. The regions have European targets to achieve by 2030. The federal measure concerns only half of the excise duties on electricity and will not be fully implemented until 2032. By comparison, in Germany the ratio between excise duties on electricity and those on gas is also skewed. The German government is now considering almost immediately eliminating 95 percent of all electricity taxes to promote heat pumps.
Level playing field
To give heat pumps a level playing field, according to energy consultant Ruben Baetens, electricity may be approximately 2.5 times more expensive than gas, given the efficiency of heat pumps. This ratio does not yet appear to have been achieved with the agreed reform. “A reform by 2032, and then only at the federal level, is a non-decision for me,” he says.
The reform of the energy bill last spring makes it possible to implement a shift in excise duties. This was not possible during the negotiations on the tax reform this summer, but it is now possible. The Greens in particular wanted to go further than has now been decided, but with the elections approaching that was not an option. After the energy crisis, some parties were terrified of cutting the energy bill.
The decision must be incorporated into a Royal Decree during this term of office.