New low-carbon transition financing instrument to be launched in Flanders

On 31 May 2024, the Flemish government decided to launch a new funding initiative for industries in the Flanders region of Belgium, designed to provide optimised financial support for companies to invest in energy-efficient and carbon dioxide (CO2)-saving projects through the use of electric boilers and heat pumps. The first call for submissions will be a pilot, launched in the form of an auction where priority will be given to the projects that are most subsidy-efficient in reducing CO2 emissions. Following the auction, the allocation of funds will follow the concept of a two-sided “contracts for difference,” with the support varying year-on-year according to the differences in costs and benefits. The flow of money over the duration of the contract period may be distributed from government to company, or vice versa. Eligible projects must meet a number of criteria, including a minimum size requirement and a demonstrable contribution to reducing CO2 emissions.

Eligibility criteria

For the pilot call, available financial support is limited to a specific range of technologies, namely large-scale electric boilers and heat pumps. The conditions are as follows:

Electric boilers

A minimum installed thermal capacity of two megawatts is required. The heating system must be a steam system or have a supply temperature on the user side of at least 100 degrees centigrade. 

Heat pumps

For an enclosed heat pump, the heat pump must have a thermal capacity of at least 500 kilowatt thermal (kWth) and a coefficient of performance (COP) value of at least 2.3. For an open heat pump, the heat pump must have a thermal capacity of at least 500 kWth and a COP value of between 2.3 and 12.

For both electric boilers and heat pumps, the heat generated may not be used to heat commercial buildings.

Timing and budget

A total support budget of EUR 70 million is foreseen for the pilot call over the 10-year support period (EUR 7 million per year). The maximum support per project is EUR 2 million per year.

Pre-registration for the pilot call is expected to open in July 2024 for a limited time, allowing the Flemish Agency for Innovation and Entrepreneurship (VLAIO) to carry out an informal analysis of the admissibility of the proposed projects. A final project proposal will only be allowed to be submitted for those projects that have been pre-registered, with an expected final submission deadline of November 2024 at the latest.

Selection of the successful projects will be based on the final ranking after evaluation of the final proposals.

How can Deloitte Belgium’s Gi³ team assist?

If you are looking for opportunities to fund your project, Deloitte Belgium’s experienced Gi³ team can provide complete assistance with:

• Compliance assessments for projects against auction requirements;

• Assistance with cost calculations/analysis for strategic options for bidding price points; and

• Project scoping, detailed viability analysis, and drafting of the application file.