Executive summary


Belgium’s energy policy is focused on transitioning to a low-carbon economy while ensuring security of supply, lowering costs for consumers, increasing market competition and continuing integration with the European energy system. The federal government is committed to phasing out most nuclear electricity generation by 2025 and has developed a capacity remuneration mechanism that aims to ensure security of electricity supply. In light of the Russian invasion of Ukraine and goals to reduce fossil fuel dependency, the federal government decided in March 2022 to take the necessary steps to extend 2 GW of nuclear capacity by ten years, and introduced a EUR 1.2 billion package to accelerate energy transition and protect consumers from high energy prices. Belgium is also working with France, Germany and the Netherlands to ensure that security of gas supply is maintained as production from the Groningen gas field is phased out.

Since the IEA’s last energy policy review in 2016, Belgium has made progress on its energy transition. From 2010 to 2020, the share of renewable energy in Belgium’s total final energy consumption increased from 6% to 12%, driven by growth in renewable electricity generation, mainly from wind and solar photovoltaics (PV), and an increased use of bioenergy, mainly for industrial and building heating and for transport. Progress on renewable energy has been especially pronounced for offshore wind. In 2021, Belgium had the sixth-highest offshore wind capacity in the world and is planning for a major expansion of offshore wind deployment.

Belgium faces notable challenges as it continues to push for its energy transition. In 2020, fossil fuels (mainly oil and natural gas) accounted for 71% of its energy supply. Most fossil fuel demand comes from industry and transport, but Belgium’s buildings also have a notable demand for gas, while oil covered 33% of residential building demand in 2020. Because of the high share of fossil fuels in its energy supply, Belgium has seen only limited reductions in greenhouse gas (GHG) emissions in recent years. From 2011 to 2019, energy-related GHG emissions fell by just 3.5 million tonnes of carbon dioxide (Mt CO2) to reach 90 Mt CO2. More aggressive policies are needed to reduce Belgium’s fossil fuel dependency and accelerate emissions reductions, especially given that the nuclear phase-out will increase the carbon intensity of electricity generation. 

Energy and climate policy

Responsibility for Belgium’s energy and climate policy is divided between the federal government and the regional governments of Flanders, Wallonia and the Brussels-Capital Region. The federal government is responsible for electricity transmission and large-scale generation; transport of natural gas and oil; nuclear energy; security of energy supply; price policy; consumer protection; the national rail system; transportation fuels; offshore energy; and energy research, development and demonstration (RD&D) related to its competences. Regional governments are responsible for renewable energy (except offshore energy), energy efficiency and GHG emissions (except for federal buildings and vehicles), distribution of electricity and natural gas, regulation of retail energy markets, vehicle registration, public transportation, urban and rural planning, and energy RD&D related to their competences.

Belgium has a wide range of energy and climate targets for 2030 aiming for energy transition and achievement of European Union (EU) targets. GHG emissions from Belgium’s energy-intensive industrial facilities and large electricity generation plants are regulated under the EU Emissions Trading System (ETS). Belgium’s National Energy and Climate Plan (NECP) sets 2030 targets for a 35% reduction of non-ETS GHG emissions versus 2005 levels; for primary energy demand less than 42.7 million tonnes of oil equivalent (Mtoe) (compared to 49.1 Mtoe in 2019 and 43.9 Mtoe in 2020); for final energy demand less than 35.2 Mtoe (compared to 35.8 Mtoe in 2019 and 33.3 Mtoe in 2020); for renewable energy to reach 17.5% of gross final energy consumption, 37.4% of electricity generation, 11.3% of heating and cooling demand, and 23.7% of transport demand; and to increase total RD&D spending to at least 3% of gross domestic product (GDP).

The EU-wide 2030 GHG emissions reduction target has been increased from 40% to 55%. Belgium will therefore have to increase its targets for emissions reduction, energy efficiency and renewable energy. Belgium should update its NECP with increased targets and additional measures to support the EU-wide 55% reduction target. The federal and regional governments are in the process of developing a burden-sharing agreement to divide responsibility for Belgium’s 2030 targets. The burden-sharing agreement should account for the increased EU-wide GHG target and should be concluded in a timely manner to give clarity to all stakeholders involved in its implementation.

Belgium supports EU carbon neutrality by 2050 and under EU requirements has adopted its own Long-term Strategy for energy and climate (LTS2050). The LTS2050 aims to put Belgium on a path that supports the Paris Agreement and EU 2050 carbon neutrality, but it does not include a clear target for national climate neutrality by 2050. Belgium should update its long-term strategy to include a clear commitment and path to 2050 carbon neutrality.

Key measures

The NECP is Belgium’s main energy and climate policy document, defining the measures the federal and regional governments will implement to help achieve Belgium’s 2030 targets. The NECP’s measures are focused on reducing energy demand and increasing the deployment of renewable energy, especially for electricity generation and transport. Achieving the targets for electricity generation (reduced emissions and an increased renewable energy share) are promoted mainly through the ETS and programmes that require electricity suppliers to obtain green certificates linked to electricity generated from renewables.

The federal government established a dedicated offshore wind zone covering 225 square kilometres (km²). As of 2021, 9 offshore wind farms with a total capacity of 2.26 gigawatts (GW) had been built in the offshore wind zone. Belgium is developing a second offshore wind zone of 281 km² and a planned capacity of up to 3.5 GW. The federal government is developing competitive bidding procedures to drive cost-effective deployment in the second offshore wind zone. Belgium’s transmission system operator (TSO) developed a modular offshore grid to connect offshore wind projects to the onshore grid. This offshore grid will be expanded and upgraded to connect projects developed in the second offshore wind zone. The federal government is examining options to further increase offshore wind generation, including repowering the first offshore wind zone and creation of a third offshore wind zone.

Renewable energy in transport is promoted mainly through a federal biofuels blending mandate that requires all companies selling road transportation fuels to achieve a certain share of biofuels by energy content in their annual fuel sales (9.55% for 2020 and 2021). The NECP proposes annual increases to reach 13.9% by 2030. Reductions in transport emissions and energy demand are also promoted through vehicle taxation that favours the purchase of low-emission vehicles and electric vehicles (EVs). There are also numerous measures to reduce transport emissions and energy demand through modal shifts away from private cars to public transport, walking and biking.

Regional governments have responsibility for reducing buildings emissions and their energy demand and for increasing renewable heating and cooling. There is a wide variety of measures, including direct financial support, loans and tax deductions for renovations; building codes; energy performance certificates; and information platforms for consumers. There is a notable focus on transitioning away from oil-based heating, with regional programmes favouring heat pumps and renewables. The federal government also contributes by setting appliance efficiency standards.

Reductions of industry emissions and energy demand are mainly driven by the ETS and voluntary agreements between regional governments and industry. The voluntary agreements vary by region, but in general focus on audits to identify cost-effective energy efficiency measures, with companies receiving tax relief or other incentives if these measures are implemented. The voluntary agreements focus on energy-intensive industrial facilities, but there is an increasing effort to include small and medium‑sized enterprises (SMEs).

In 2018, the federal government published a report on the results of a national debate on carbon pricing for non-ETS sectors. The report detailed the impact of three carbon-pricing options on fossil fuel prices and on emissions from transport, buildings, non-ETS industry and other sectors, but so far no decision on carbon pricing has been taken. Under EU directives, Belgium developed an inventory of fossil fuel subsidies and is committed to eliminating fossil fuel subsidies.

The federal government aims to reform federal taxation to make it more climate- and environmentally friendly, following the polluter-pays principle and sending price signals supporting decarbonisation. In support of this reform, the federal government will carry out a study in consultation with the regional governments to be published in 2022. Proposals for fiscal reform based on this study will be made by late 2023. Belgium should consider the reform of federal taxation as an opportunity to eliminate fossil fuels, introduce broader carbon pricing and better align energy prices (especially for electricity) with its energy transition goals.

To address energy poverty and ensure energy access, Belgium has a social tariff that results in reduced gas and electricity bills for residential consumers that meet certain socio‑economic requirements. The federal government automatically notifies energy suppliers which of their consumers qualify for the social tariff. All energy suppliers must provide the social tariff to their qualifying consumers. In 2020, 9.7% of electricity consumers (around 470 000 consumers) and 10% of gas consumers (around 295 000 consumers) received the social tariff. There are additional federal and regional programmes to address energy poverty. 

Electricity market reform

Electrification is a central aspect of Belgium’s push for energy transition. However, Belgium’s low heating oil and gas prices and high electricity prices significantly limit the incentive for electrification. In 2019, Belgium’s retail gas prices were among the lowest in Europe, and electricity prices for households were the third-highest among IEA member countries, while the retail electricity price for industry was the sixth-highest. Under the current tariff structure, home heating with electricity is 50% more expensive than heating with natural gas or fuel oil, even though electric heating is more efficient and less polluting.

A key reason for Belgium’s high electricity prices is the high level of charges that are not associated with electricity generation, transmission or distribution. The high cost of electricity limits its ability to compete with other energy carriers and reduces the incentive for consumers and businesses to invest in electrification of building heating, transport, industrial processes and other key areas. A change in the tariff structure is needed to ensure that electricity prices align with the energy transition goals. Lower electricity prices also improve the situation of vulnerable households and help foster industrial competitiveness.

In 2019, Belgium had the highest consumer switching rate for electricity in Europe. However, Belgium’s electricity market remains highly concentrated, with limited competition. In 2019, just one supplier had a 72% market share at the wholesale level, while just four suppliers dominated Belgium’s retail electricity markets. More effort is needed to remove barriers to competition and ensure that new companies and innovative services can enter the market.

There are also notable concerns over the time required to obtain permits for the construction of transmission infrastructure and generation facilities, especially onshore wind and large-scale solar PV. Timely project permitting is essential, especially given the need to quickly develop new generation and transmission capacity to ensure a secure electricity supply during and after the nuclear phase-out, and to support the strong deployment of renewable energy needed to meet the energy transition goals.

Belgium has also made progress on energy security. The infrastructure projects supporting a secure gas supply after the Groningen phase-out should be complete several years ahead of schedule. However, Belgium lacks a national strategy and plan for decarbonising the gas sector, including mid- to long-term targets for low-carbon gases such as biomethane and hydrogen. More clarity is needed on the decarbonisation of the gas sector, especially as the nuclear phase-out is expected to result in the deployment of new gas‑fired electricity plants.

Covid-19 response

Belgium is still assessing the impact of the Covid-19 pandemic on its energy policies and markets. Several measures to address the impacts of the pandemic on the energy sector have been implemented. In 2020, eligibility for the social tariff was temporarily expanded to all consumers with a gross income below EUR 20 000, which significantly increased the number of consumers receiving it. In addition, the deadline for requesting payments from the Social Heating Fund were extended and the government expects the number of households receiving these payments to increase. The regional governments also took a variety of steps to protect vulnerable consumers and extended the deadlines to apply for zero-emission vehicle grants, to repay loans for building energy efficiency measures and to obtain building energy performance certificates.

In response to the pandemic, the European Commission approved Belgium’s EUR 5.9 billion National Recovery and Resilience Plan. More than half of the plan’s funding contributes to Belgium’s climate and energy goals, including EUR 1 012 million for building renovation, EUR 672 million for modal shifts in transport and EUR 100 million for the development of an offshore energy hub. Several measures support investments in production, transportation and the use of hydrogen produced from renewable energy, with a goal for Belgium to reach at least 150 megawatts (MW) of electrolysis capacity by 2025. The plan also supports a legal framework for carbon capture, utilisation and storage (CCUS), including cross-border infrastructure for CO2 transportation.

The European Commission provided an overall positive endorsement of Belgium’s plan and noted that it should have a positive economic impact and drive public and private investments in areas relevant for Belgium’s energy and climate goals. However, the Commission pointed out that the plan contains limited investments in renewable energy and indicated that additional funding and measures beyond what is detailed in the plan are needed to achieve Belgium’s 2030 renewable energy targets.

Key recommendations

The government of Belgium should:

  • Update the National Energy and Climate Plan with new targets and measures that support the European Union’s 55% emissions reduction target and provide long-term certainty to stakeholders for making the necessary investments for decarbonisation.
  • Agree on long-term climate and energy targets at a national level for the period 2030‑2050, including a national 2050 carbon neutrality target, as part of a stable regulatory framework to provide clarity to investors and consumers.
  • Ensure measures addressing energy poverty foster the use of renewable energy and energy efficiency improvements, enable a just transition that protects vulnerable households, and make them part of the energy transition.
  • Use the reform of taxation to create appropriate price signals to drive decarbonisation across the entire economy and to support electrification.
  • Ensure that infrastructure planning, approval and permitting processes allow for the timely expansion of transmission and distribution systems needed to support a rapid and sustained renewables deployment, especially for the second offshore wind zone.