My energyThe federal government has announced a tax shift for energy as part of the national energy and climate plan. By partly shifting the excise duties on electricity towards natural gas, the energy transition should be given a boost. Koen Vanthournout, senior researcher at VITO and EnergyVille, suggests Mijnenergie.be the impact on your energy bill and examines the extent to which a tax shift encourages investments in sustainable energy.
By Kurt Deman, in collaboration with Mijnenergie 20-10-23, 18:10 Last update: 20-10-23, 18:36 Source: Mijnenergie.be
“There is a great scientific consensus that the future is electric and renewable,” says Vanthournout. “That is why the government is encouraging electric cars and heat pumps, including with subsidies and renovation obligations. But for consumers, consumption costs still have the greatest influence on their decision-making process. And that’s where the problem lies: in all situations, natural gas appears to be cheaper than electricity.”
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50 percent tax shift
“A discrepancy arises between what the government wants to achieve and the distribution of the levies: 31 percent of the electricity bill of an average Flemish family is levies; for gas it is only 16 percent. So gas is actually subsidized compared to electricity,” says Koen Vanthournout.
The federal government wants to do something about this with a tax shift for energy. In concrete terms, she plans a shift of 50 percent from excise taxes on electricity to excise taxes on fossil fuels natural gas and propane. This intervention will be implemented step by step, with adjustments in July 2028, July 2030 and July 2032.
Savings of 85 euros, but…
“Excise duties are part of the levies on your energy bill,” Koen points out. “In total, these levies represent approximately 16 percent of the electricity bill and 9 percent of the natural gas bill. A family with average consumption pays an annual electricity bill of 1,325 euros according to October energy prices. Excise duties amount to approximately 173 euros. At current energy prices, a tax shift of 50 percent will result in a saving of approximately 85 euros on electricity costs in 2023. The natural gas bill will increase to compensate.”
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Is that sufficient for a real transition?
The question is of course whether this measure is sufficient to convince more people to choose a heat pump. Vanthournout lets the figures speak for themselves: he calls it a partial correction with a distant future horizon. The expert also acknowledges that the transition from natural gas heating to a heat pump is less obvious for families with lower incomes. “We also see the same phenomenon when choosing an electric car. I therefore do not view a tax shift as a panacea, but as part of a package of measures that stimulate and facilitate the shift towards renewable energy.”
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Don’t forget the Flemish levies
Koen Vanthournout also points out the Flemish levies on the energy bill. “These include public service obligations (PSOs) and allowances. These represent 6.6 percent of the cost of electricity on the bill, compared to 0.7 percent of the cost of natural gas. You can question that ratio, but also the fact that such costs for public lighting and subsidies for insulation are part of our energy bill at all.”
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2023-10-20 16:10:00
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