Excise duties on electricity and natural gas: Simplifications in the pipeline for environmentally friendly production methods

The Belgian Chamber of Representatives is currently discussing a draft law containing various fiscal and financial provisions (Dutch | French). The bill provides, inter alia, amendments to the Program Law of 27 December 2004 (Dutch | French) ('the Program Law), to limit the scope of the concepts of 'distributor' and 'end-user' – and the associated formalities. More specifically, it targets situations where electricity is produced in an environmentally friendly manner and for trade that takes place before supply to the end user. An administrative relaxation for natural gas is also provided to the benefit of the so-called 'traders'.

Broad definition of ‘distributor’ under current legislation

To date, the definition of 'distributor' – as included in the Program Law – is defined in a broad way, so that any person who sells or cedes electricity (including to himself), without further distinction, is obliged to register as a distributor for excise purposes. The status of distributor also means that any supply of electricity to an end user (including to himself) in principle entails the obligation to submit a declaration for consumption.

In addition, the consumer of electricity produced from a.o. sun, wind, water or cogeneration, i.e. the person who generated the electricity himself or a third party to whom it was supplied, must also register as an 'end user' if he wishes to benefit from the exemptions for the consumption of green electricity provided for in Article 429, §2, b) and d) of the Program Law.

The current wording of the Program Law therefore has far-reaching administrative consequences for self-generators of green electricity, while that electricity is in fact exempted from excise duties in the intended cases. In practice, the administrative requirements are not always rigorously complied with. Even more so, the Administration had already announced in a Circular Letter (Dutch | French) that the persons concerned did not have to take any steps to apply for the required permits.

Draft bill aims to abolish the registration obligation for self-generators and consumers of electricity

The aim of the current draft law is to create further clarity and, above all, legal certainty, by formally abolishing the registration (as distributor and/or as end user) and declaration obligations for self-generators and consumers of electricity. The simplification applies provided the electricity is produced in an environmentally friendly manner and is not passing through the transmission or distribution network.

Furthermore, the so-called 'traders' who sell electricity and/or gas to other parties that are not the end-users, will no longer be obliged to register as a distributor neither.