EIA and Energy Taxes

Changes to EIA and Energy Taxes from 2024

Timothy Majoor,
Johan Loo
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On Budget Day, the government announced several modifications in the realm of the Energy Investment Allowance (EIA) and energy taxes. What changes should you consider from 2024? We have outlined them for your reference.

Reduction in the Energy Investment Allowance (EIA)

If your company invests in energy-efficient assets and technologies, please take note of these two alterations in the Energy Investment Allowance (EIA) from 2024:

  1. Reduction in Deduction Percentage
    Starting from the fiscal year 2024, there will be a reduction in the deduction percentage. You will only be able to deduct 40 percent (instead of the previous 45.5 percent) of your investment costs from your taxable income.
  2. Extension of the EIA
    The 'horizon clause' (end date) for the EIA has been extended to January 1, 2029. This extension also applies to the VAMIL and MIA.

Under what conditions can you apply the EIA?

The EIA is a fiscal deduction scheme that offers immediate financial benefits for investments in energy-saving assets and sustainable energy. However, your investments must meet certain conditions: 

  • Your investment must be a minimum of 2,500 euros per asset.
  • The asset must not have been previously used.
  • The asset must be listed on the RVO energy list. Assets that are not on the energy list but still save energy or fossil fuels and meet specific savings criteria may also qualify for the EIA. You cannot apply both the EIA and the environmental investment deduction to a single investment.
  • Costs of an energy audit can also be included under certain conditions.

Changes in Energy Taxes

To promote energy efficiency and sustainability, a number of changes in energy taxes have been announced for businesses and specific sectors. These taxes increase the costs of your energy consumption and are intended to motivate you to use less energy. Here is an overview of the key updates.

Greenhouse Horticulture: Abolition of Reduced Rates and Exemptions

The plan is to abolish the reduced rate for greenhouse horticulture and to limit the exemption from energy tax for the use of natural gas in electricity generation. These reduced rates will be gradually phased out between 2025 and 2030. This supports the energy transition and increases government revenue.

Please note!

The European Commission must still approve the gradual reduction of the reduced gas rates. If this does not happen, the government will abolish the reduced rates directly from 2025! The government is also ending the exemption from energy tax for metallurgical and mineralogical processes. This is intended to further encourage sustainable practices in greenhouse horticulture and industry.

Greenhouse Horticulture: Introduction of CO2 Tax

In addition to the changes in energy tax, the government proposes to introduce a CO2 tax for the greenhouse horticulture sector from 2025. This is aimed at ensuring the tightened residual emission target of 4.3 million tons by 2030.

Limitation of Electricity Generation Exemption

From 2025, the government will gradually limit the exemption from energy tax for the use of natural gas and electricity for electricity generation and partially abolish the exemption for electricity. To prevent operators of medium-sized installations from being obligated to pay tax as a result, a different treatment applies to them.

Splitting of the First Bracket

Starting from January 1, 2024, the first brackets for gas and electricity in energy tax will be split. Currently, the first gas bracket ranges from 0 to 170,000 m3.

The amendment sets the boundary between the new first and new second brackets at 1,200 m3. The government proposes to adjust this boundary to 1,000 m3. This provides significant financial advantages to many households and encourages reduced gas consumption. At present, the government is not changing the rates of the brackets. Therefore, the new first and second brackets will remain equal on January 1, 2024, and there will effectively be a single rate for consumption up to 170,000 m3.

Prepare Thoroughly for These Changes!

These new measures in energy taxation primarily affect specific sectors. Therefore, we advise you to prepare thoroughly! Our specialists are ready to provide you with guidance on this matter.

Contact one of our specialists