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21.10.2022

Energy crisis: subsidies

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Flanders

Companies with an operating loss in the fourth quarter of 2022 are eligible for energy support from the Flemish government provided they meet a number of strict conditions.  Energy-intensive enterprises can count on increased support. It is expected to be repeated for the first quarter of 2023. 

 

How much is the support? 

  • The standard support is 25% of the energy surplus cost of the fourth quarter of 2022, limited to 80% of the operating loss and up to EUR 500,000. 
  • For energy-intensive companies*, the support is 30%, limited to 80% of operating loss and up to a maximum of EUR 4,000,000.   
  • Energy-intensive enterprises operating in one or more particularly affected sectors, as defined in the European Temporary Crisis Framework**, receive 35 %, limited to 80% of operating loss and up to a maximum of EUR 7,500,000.   

The eligible energy incremental cost is calculated as the product of, on the one hand, the difference between the unit price paid by the company as a final consumer with an external supplier during the fourth quarter of 2022 and twice the average unit price paid by the company as a final consumer with an external supplier for energy expenses in 2021, and, on the other hand, the volume consumed for this energy during the fourth quarter of 2022. 

Eligible additional cost will be calculated per month in accordance with monthly billing.  

In application of Europe's temporary crisis framework, the quantities of natural gas and electricity used to calculate the additional cost must not exceed 70% of consumption in the same month in 2021. 

(*) Energy-intensive companies are those whose energy expenditures represented at least 3% of sales achieved during calendar year 2021, as inferred from the financial statements or income statement. 

(**) These are the following sectors : production of metals, chemical and fertilizer subsectors, paper industry, textile industry, synthetic fibers and glass fibers, refineries, glass industry, manufacture of wood panels, manufacture of ceramic tiles and manufacture of mineral wool (insulation).

 

Who can call on the support? 

Only those companies that meet all the conditions listed below are eligible for the aid: 

  • The company must have incurred at least EUR 7,500 (excluding VAT) in electricity and gas expenses at its Flemish sites by 2021. 
  • The company must incur an operating loss (negative EBITDA) in the fourth quarter of 2022. That loss must be attested by an approved external auditor, an approved auditor or a certified public accountant. 
  • The company may not pay dividends during the period from Oct. 1, 2022 to Dec. 31, 2023. 
  • A company with a NSSO employment of more than 10 people may not put more than 35% of its workforce on temporary unemployment during the fourth quarter 2022 due to increased energy costs. 
  • A company under the scope of an energy policy agreement must subscribe to it and comply with its terms.   

For the increased support (30% or 35%) is subject to the additional condition that the additional cost must be at least 50% of operating loss. Energy-intensive companies that do not meet this requirement can well still fall back on the standard support. 

 

Who will be excluded from this measure? 

The following companies are expressly excluded from support: 

  • Companies in the legal state of dissolution, cessation, bankruptcy or liquidation; 
  • Companies that had negative equity in both fiscal year 2019 and fiscal year 2021; 
  • Companies that were not yet incorporated on Oct. 1, 2021; 
  • Credit and financial institutions; 

In addition, there are a number of cumulation provisions. For example, energy support in 2023 is not cumulative with the Strategic Transformation Support Whether the SME Growth Grant. 

 

When and how can you apply for the support? 

The support measure itself has yet to be approved by Europe. Once approved, will the support must requested be at VLAIO, where they are currently working out the concrete modalities. The start of the online submission period is scheduled from the end of November 2022. 

 

Do not hesitate to contact us here contact us with questions.

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Wallonia

A budget of EUR 175 million was made available to provide direct support to companies affected by the sudden increase in energy prices.

Per quarter, the following modalities apply:

Category % support support ceiling terms
Non-energy-intensive businesses within the meaning of the temporary aid framework 25% EUR 500,000.00 Decrease in operating result compared to the reference period of year n-1 and implementation of an energy audit within 3 years
Energy-intensive enterprises (=where the purchase of energy products is at least 3% of production value) 30% 4,000,000.00 EUR Eligible costs are at least 50% of the operating loss.
The support shall not exceed 80% of the operating loss in the period concerned.
Highly energy-intensive companies (e.g., aluminum, fiberglass, pulp, fertilizer, hydrogen and chemical companies) 35% 7,500,000.00 EUR

 

It will be granted for the fourth quarter of 2022 and for the first quarter of 2023 if the temporary framework is extended.

The aid rate is applied to the difference between the invoice for the relevant period (quarter) and twice the invoice for the corresponding period of the previous year.

Example:

  • Invoice quarter 4 2021: EUR 3,000
  • Invoice quarter 4 2022: EUR 10,000
  • ➜ calculation base = 10,000 EUR - (3,000 EUR X 2) = 4,000 EUR
  • ➜ support is 25% of 4,000 EUR, i.e., 1,000 EUR.

In addition, the grant is subject to the following further conditions :

  • Annual energy bills must exceed EUR 7,500 by 2021;
  • The company may not claim economic unemployment of more than 35% over the previous year's reference period;
  • The company may not pay dividends to shareholders in the year in which it receives the aid, and the aid granted may not be valued in connection with the payment of any dividend relating to the fiscal year in which the aid is granted.

 

Do not hesitate to contact us here contact us with questions.

Would you like a conversation about the right approach for your business?  Then make an appointment here with our pro experts!