Are you an SME or a large enterprise located in Flanders? Do you want to know what subsidies you are entitled to at each stage of your climate strategy? Then keep on reading! In this article, we will demonstrate why money should not be considered as a barrier to action, and give you the necessary tools to accelerate your climate transition and inspire change. We would like to thank Geert Spapen, CEO of A-Chief for his clarification on this topic.
What are the existing support schemes to accelerate climate transition?
The main support scheme to accelerate the climate transition in the Flemish Region is currently the Ecology Premium support schemes (In Dutch: ecologiepremies). The objective of this scheme is to encourage companies and businesses to organise their production process in an environmentally friendly and energy-efficient way. These Ecology premiums consist of two regimes: the Ecology Premium Plus (EP+) and the Strategic Ecology Support (E-STRES).
Ecology Premium Plus (EP+)
If you are a SME, medium or a large company and you want to become more energy-efficient and plan to invest in high performance ecological technologies to achieve this goal, you can benefit from the EP+ framework. This regime covers 15 to 55% of the extra cost of the investment, depending on the scope of the enterprise and technology
To be eligible, the technology you plan to invest in must be listed in the EP+ limitative technology list (LTL). This list contains the most performing technologies (cooling, warming/heating processes, lighting, water use, etc.) that contribute to achieving the Kyoto commitments, the EU ambitions, and the Flemish environmental objectives. It was expanded in early January 2023 to make more sustainable technologies and more companies eligible. You can find the latest version of the list here (January 3rd, 2023).
A concrete example: a manufacturing society can benefit from EP+ subsidies if it wants to reduce its heating consumption by integrating in its production process a technology like an absorption refrigeration system that uses low-quality heat (e.g., hot water or residual heat).
Do not forget to check in the LTL whether you are eligible for the technology you plan to invest in. Indeed, some very specific technologies like water fogging processes can only be used by a certain category like SMEs and not medium or large companies.
Strategic Ecology Support (EP-STRES)
SMEs, medium, and large companies that plan to conduct strategic ecology projects requiring cutting-edge green technology can benefit from the EP-STRES regime.
The EP-STRES support amounts to a maximum of EUR 1,000,000 per three years. The support percentage (from 20% to 40% on the accepted extra cost of the essential components) depends on the performance (type of investment, eco-class) of the technology and the size of the company (SME or LE).
These technologies have a unique business-specific nature and do not appear on the limitative technologies list (LTL). In a way, the EP-STRES can be considered as a complement of the EP+. To benefit from the EP-STRES, you will have to prove the strategic character of your investment projects through various conditions.
A concrete example is the case of the Wimble Manufacturing Belgium, famous for the production of Pringles and being a branch of Kellog’s. In 2021, the company decided to integrate several specific technologies in its production processes to become more energy-efficient and reduce its impact. To help the company achieve this objective, the Flemish Government granted 1 million euros under the EP-STRES.
GREEN Investment Subsidy
If you cannot access neither the EP+ regime, nor the EP-STRES because your technology is not included in the LTL or not considered cutting-edge, you still can access the GREEN investment subsidy. Just like the EP+ regime, the GREEN Investment Subsidy provides support to SMEs and large companies investing to green their production process or to reduce their overall energy consumption.
The aid amounts to a maximum of EUR 1,000,000 per three years and the percentage of support (from 20% to 40%) depends on the eco-class of the investment and on the size of the company (SME or LC).
A concrete example for this regime is the case of a steel company who invests in a plant to produce green hydrogen. The electrical energy for this hydrogen comes from solar panels. For the engineering, investment and installation costs, the company can receive an investment aid under the Green Investment Subsidy.
SME Growth Subsidy
Beyond the EP schemes and the GREEN Investment Subsidy, there is also the SMO Growth Subsidy (in Dutch : kmo-groeisubsidie duurzaam ondernemen). One specificity however : Only SMEs can have access to this support scheme. The SME Growth Subsidy amounts to:
- -50% of the consultancy cost through one or more service provider(s), with a maximum of 25,000 euro
- -50% of the wage cost of one strategic profile with a maximum of 25,000 euro.
If a SME plans to have recourse to external advice (consultancy) or to hire specific employees to elaborate a growth strategy, it can benefit from the SMO Growth Subsidy. Let’s take the example of a manufacturing company who wants to make its production process circular by fully recycling a composite to reuse it as raw material. If this company wants to recruit a Circular Business Developer, it can ask for investment support granted under the SME Growth Subsidy. Concretely, this person (also called strategic employee) can be responsible for reviewing the whole production process or exploring new development opportunities generated by the newly created raw materials.
How do I know if I can benefit from these Ecology premiums?
As a SME, medium, or large company, you must fulfil some basic criteria:
- You need to realise investments in the Flemish Region
- You need to carry out an acceptable main activity (NACE code)
- You need to be an acceptable legal form (Article 2 Companies Code)
- You must not be a non-profit organisation.
Besides these “basic criteria”, you need to fulfil criteria very specific to the regimes you are applying to. If you apply for a subsidy under the EP+, the most important criteria will be if the technologies you plan to invest in are listed in the LTL. If you apply for a subsidy under the EP-STRES, your investment program must reach the minimum acceptable investment amount of EUR 3 million in order to be accepted. You can find more information here.
How to calculate the exact amount of my subsidy?
The amount of your ecology premiums depends on several factors:
- The size of your company (SME, medium, or large company)
- The type of investment and technologies you invest in (environmental and energy)
- The ecoclass and ecology number to which the investment belongs.
The amount of the subsidy granted under the EP+ and EP-STRES highly depends on these two factors. Under the EP+, each eligible company can receive up to 55% of the extra cost of the investment in effective ecological technologies.
However, as explained before, the amount of the subsidy under the EP+ is determined by the performance of the technology. This performance is expressed in an ecology number and indicates to what extent this technology contributes to the Kyoto Protocol and the environmental objectives of the Flemish Authorities.
In other words, as illustrated in the picture, the higher the ecology number of the technologies you invest in, the higher the amount of your subsidy under the EP+ will be. You can find more information regarding the amount of EP+ subsidies here.
How do the existing support schemes apply to my climate strategy?
In Tapio’s vision, climate strategy consists of three pillars: understand, act and engage.
The pillar “Understand” is about realising the importance of your environmental impact by visualising your main sources of emissions. As we say in Dutch “Meten is weten’ (EN: Measuring is Knowing). This is the first essential step of your climate strategy before undertaking any concrete actions. Indeed, you can’t reduce what you don’t understand.
However, according to Geert Spapen, CEO at A-Chief, there are no subsidies or support schemes, neither at the federal nor at the regional level, specifically dedicated to understanding your carbon footprint or even making a carbon report. Such actions are rather undertaken at the municipal level through local initiatives. For example, the City of Mechelen supports companies that want to have their carbon report drawn up by a specialised partner and is ready to reimburse up to 50% of their invoice for this service with a maximum of €2,500. The City has already taken some actions in 2013 to visualise its impact in order to become energy efficient and reduce its environmental impact.
Since such initiatives vary from one city to another, do not hesitate to ask your municipality or city for further information. No matter if you are a city or a company, Tapio can help you to estimate your carbon footprint and set up ambitious goals and action to reduce your impact and inspire your stakeholders.
The pillar “Act” refers to the reflection process where you set ambitious reduction targets to reduce your environmental impact. Reducing your footprint can be done at different steps of your value chain or your production process such as:
- Products and services (making your products, packaging, etc.)
- Energy consumption (reducing your heating and electricity consumption)
- Logistics (supply of your goods upstream and downstream)
- Mobility (measures put in place to encourage soft mobility for your employees)
- Waste sorting
The actions to be taken vary from one company to another. For one company, reducing its impact will go through reducing its heating consumption. For another, it will be through reducing the emissions associated with logistics. Let yourself get inspired by the experiences of our clients.
By visualising your main emission sources, you will be able to consider areas of reduction within your production process that you had not thought of before and that are potentially covered by support schemes. For example, if you plan to reduce your energy consumption by implementing a specific technology, you can benefit either from the EP+ or the EP-STRES provided you fulfil the conditions. Another example specific to SMEs : if the reduction of your impact goes through hiring strategic employees, you can benefit from the SME Growth Subsidy.
The pillar “Engage” is about inspiring your partners and your stakeholders to hit the path of decarbonation. By pursuing an ambitious reduction strategy, you contribute to shaping a low-carbon ecosystem. As already discussed in the article on subsidies in Wallonia or in Brussels, it is difficult to identify a specific support scheme for “getting your stakeholders on board” with the climate transition. There are however various formulas for stimulating reflection on climate solutions and raising awareness among your employees, such as collective coaching or initiatives. An energy audit or a carbon footprint assessment is generally used to raise awareness of your impact. However, they can also be an opportunity to ask questions to your service provider about e.g. how to structure or communicate more effectively on your climate actions towards your partners.
“First sow and then reap”
For Geert Spapen, CEO of A-Chief, the current support schemes surely do contribute to accelerate climate transition. However, climate transition and sustainable business won’t be achieved overnight. Substantial investments will first have to be made before one can enjoy tangible benefits. The advice is to introduce sustainability step by step. In other words, “first sow, then reap”.
Companies will not escape the imperatives of the ecological transition. Twenty years ago, measuring its environmental impact was a marginal issue. Today, it has become a top priority. For the CEO of A-Chief, companies that cling to their model will sooner or later face exorbitant financial costs. A topic that we already addressed in a previous article. Customers’ fears about the transition are still palpable. There are several reasons for this: lack of knowledge about existing investment aids, additional costs or a lack of support within the company itself.
However, as the A-Chief CEO points out, the ecological transition favours the emergence of new sectors and new business models that open the door to new opportunities that can eventually be transformed into a new source of revenue in the long term.
If they can do it, so can you !
For Geert Spapen, every organisation and business must act, no matter the sector. As he points out, the car industry and steel industry started to completely review their business models. If the biggest GHG emitters can do it, there is no reason why smaller companies should not follow the same path.
To start your journey towards a decarbonised ecosystem, you don’t need to rush in by tackling a lot of actions at the same time. As argued by Geert Spapen, start with the basics by implementing small impactful actions.
By the way, there are plenty of actions you can already implement to initiate change at your level and onboard all your stakeholders. Tapio is your dedicated climate partner. Together, we can help you to take the first step towards climate transition by estimating your carbon footprint and proposing a tailor-made reduction plan. Reach us out to discover the perfect offer that fits your needs.