Environment and Climate Regulation Comparative Guide -

1 Legal framework

1.1 Which legislative and regulatory provisions govern environment and climate regulation in your jurisdiction?

In Belgium, environmental law is strongly based on and inspired by European regulations and directives, especially the environmental, climate and waste regulations and directives (eg, the Environmental Impact Assessment Directive, the Seveso Directive and the EU Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals). They are transposed into regional legislation.

There are three regions in Belgium. Urban planning law and environmental law are regulated by region in many respects – this is the case, for instance, for all regulations concerning permits and zoning plans.

1.2 Which bilateral and multilateral instruments on environment and climate regulation have effect in your jurisdiction?

European regulations and directives based on the Treaty on the Functioning of the European Union and the Espoo Convention, and the transposition thereof.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have? To what extent do they cooperate? What are the mechanisms for cooperation?

Each level of authority has an enforcement mechanism. For building and environmental infringements, enforcement is possible at the local (municipal) level. Identifications can be made by competent officials or the public prosecutor. The enforcement process may be judicial or administrative.

Enforcement is also possible at the regional level. The principle is that each level can independently intervene in relation to environmental regulations that are in the public domain, based on the principle of subsidiarity.

1.4 What is the regulators' general approach to environment and climate regulation/action?

More repressive and less preventive. Often, action is taken only on the basis of complaints from neighbours, individuals or competitors, except for flagrant breaches.

Shutting down companies is usually a measure of last resort. The preference is to impose fines and bring activities into line with the law where this is legally and practically possible.

2 Environmental protection

2.1 What are the key features of the regulatory regimes that protect the following environmental assets in your jurisdiction? (a) Air; (b) Soil; (c) Fresh water; (d) Sea water; (e) Flora and fauna; and (f) Natural habitats and scenic landscapes.

The regions have the main responsibility for environmental protection. They have competence for air and soil protection, nature conservation and protection, and water protection, among other things. The federal government has competence for the protection of the marine environment and the import, export and transit of alien plant and animal species, among other things.

(a) Air

The European environmental quality standards for air are laid down in regional legislation. Guide values are set for ozone concentrations, among other things. In order to comply with the limit values, the regional authority must draw up action plans containing relevant measures.

(b) Soil

Soil decontamination and protection are regulated at the regional level. The main goals of the legislation are:

the prevention of soil contamination;
the identification of potential sources of contamination;
the organisation of investigations to establish the existence of contamination; and
the determination of methods for the remediation of contaminated soil.

The legislation distinguishes between historical soil contamination, new soil contamination and mixed soil contamination. An important role is played by soil decontamination experts.

(c) Fresh water

The relevant regional legislation is designed to protect surface waters in the three regions against pollution. The main goals are:

the protection of aquatic ecosystems and wetlands; and
the mitigation of risks and impacts of floods and droughts.

(d) Sea water

At the national level, the Marine Environment Act protects the marine environment of the Belgian North Sea. The law provides for marine spatial planning in the sea areas under the Belgian jurisdiction. The law:

establishes the legal framework for the preservation, restoration and development of nature in the Belgian North Sea; and
protects the Belgian North Sea from marine pollution.

The Flemish region also has a number of extraterritorial powers at sea that fall under its material competence, such as dredging and sea fishing.

(e) Flora and fauna

Fauna and flora are regulated regionally. Regional legislation specifies:

which species of animals and plants are protected in the given region; and
the legal consequences that attach to this protected status – for example, it lists a series of acts that are prohibited in relation to protected species.

It is also possible for the competent authority to establish species protection programmes.

(f) Natural habitats and scenic landscapes

The regional regulations focus on area-specific and species-specific protection measures.

An important protection mechanism is the appropriate assessment obligation or habitat test. On the basis of a habitat check, the competent authority will examine whether a plan, programme or project that requires a permit could have a significant impact on the natural characteristics of a special area of conservation.

A nature check obliges the regional government, when granting an environmental permit, to ensure that ‘avoidable damage' is actually avoided, either by refusing the permit or by imposing permit conditions.

2.2 What are the key features of the regulatory regime that protects against environmental nuisances (eg, noise, odour and light pollution) in your jurisdiction?

In order to prevent or mitigate environmental nuisance, regional regulations set out environmental quality standards, which define the quality level that different environmental elements must meet at a given time.

Two types of environmental quality standards apply. ‘Basic' environmental quality standards apply everywhere, irrespective of the location of the environmental element concerned. Environmental quality standards can also be regionally differentiated in the form of ‘special' environmental quality standards. These determine the quality requirements to be met by a particular part of the environment in areas that require special protection, either because of the use to which they are put (eg, nature reserves) or because of the functions they fulfil (eg, bathing or drinking water).

The government must adequately translate its environmental quality policy into a source-oriented approach and impose this on operators through detailed permit conditions.

2.3 What are the consequences of breach of these regulatory regimes?

Breach of the regulatory regimes can be sanctioned by criminal and administrative law. Each region has set out criminal penalties for breach of the various permitting obligations. The level of fines and prison sentences may differ. The court may also impose restorative measures. Administrative enforcement is also possible. Administrative enforcement can take the form of administrative measures or an administrative fine.

3 Climate change/action

3.1 What are the key features of the regulatory regime governing greenhouse gas emissions in your jurisdiction?

The federal climate policy aims in particular to achieve Belgium's reduction targets for greenhouse gas emissions. The main emissions reduction measures taken at the federal level concern taxation, energy and transport. They are part of the National Energy and Climate Plan 2021–2030, which includes policies and measures of the federal and regional authorities. The federal measures concerning greenhouse gas emissions are identified in the federal section of the National Energy and Climate Plan.

3.2 What emissions trading regimes are operational in your jurisdiction and what are their key features?

The burden sharing between the federal state and the regions under the Kyoto Protocol stipulated that the federal government had to purchase a total of 12.3 million emissions allowances as its contribution to achieving Belgium's Kyoto targets. Each emission allowance represents a reduction of 1 tonne of carbon dioxide.

The federal government has fulfilled its commitment through various procurement initiatives, but always according to the same guiding criteria:

a strong emphasis on the contribution to sustainable development of the project from which the carbon credits are purchased, such as renewable energy and energy efficiency projects;
the promotion of an even geographical spread of projects by providing additional financial support for projects from least developed countries; and
the price for an emission credit in function of its contribution to sustainable development, the security of supply and the prevailing market price.

3.3 How prominently does renewable energy feature in the energy mix in your jurisdiction? What regulations and other measures have been put in place to promote the use of renewable energy?

In Belgium, the promotion of renewable energy is mainly a regional competence.

In recent years, the share of energy from renewable sources has risen sharply and has contributed to the security of supply and the climate. The share of renewable energy grew significantly in 2020. In absolute figures, total renewable energy production has increased by 31%. Wind energy, and more specifically wind energy from offshore wind turbines (ie, those installed at sea), is particularly notable. This can be explained by a growing investment in this energy source by various Belgian actors. In terms of promoting renewable energy, Belgium has shown particular interest in offshore wind turbines. Projects are led by cooperatives of citizens or established institutions. In 2020, for example, two new offshore wind farms commenced operations. Solar energy is also doing well, although the exact extent of the increase depends on the season.

For the production of electricity, Belgium has introduced a system of green certificates and guaranteed minimum prices to support the development of energy production from renewable sources.

Nuclear energy accounted for about one-third of the energy mix in 2020 (31.7%), compared to 41.4% in 2019. The share of gas in the energy mix, on the other hand, increased from 23% of the mix in 2019 to 27.8% in 2020. The share of gas in the energy mix therefore remains stable, as in previous years.

3.4 What regulations and other measures have been put in place to promote greater energy efficiency in your jurisdiction?

The first and foremost policy objective is to substantially increase energy efficiency in all sectors. The three biggest consumption sectors are industry, residential and transport. In addition to improving energy efficiency, parallel efforts must be made to promote the development of renewable energy. Energy services and technologies will be digitally controlled and intelligently interconnected.

3.5 What other initiatives have been rolled out in your jurisdiction to combat climate change and its effects? How are those effects typically manifesting in your jurisdiction at the present time?

The federal government is taking action to adapt to climate change, with the aim of reducing the harmful effects of climate change and inducing as many benefits as possible. These measures are part of the National Adaptation Strategy and have led to the approval of a federal contribution to a National Climate Adaptation Plan.

The regions are also developing a policy to support green heat. In order to support the establishment of power plants that produce energy from renewable sources, the federal government uses tax instruments (ie, tax deductions for businesses and tax credits for individuals). The regions have also set up a number of systems through which they provide investment aid to companies and grants to individuals.

In order to promote the development of biofuels in the transport sector, the government introduced tax-exempt biofuel quotas and a blending requirement. All of these measures are supported by large-scale information, training and awareness campaigns in order to optimise the use of biofuels by companies and citizens.

3.6 What impact is Covid-19 likely to have on climate action in your jurisdiction?

In response to COVID-19, Belgian scientists and companies came together to devise a transition plan for Belgium with a focus on renewable energy. Plan Sophia involves more than 200 measures spread across 16 areas. The aim is to immediately initiate the transition to a sustainable economy in order to avoid new systemic crises.

The plan states that Belgium should finalise a clear long-term framework for the energy system by 2030. This framework should be formally adopted under the different Belgian levels of competence. The framework should at least:

define the essential milestones – including, for example, a nuclear exit and the phase-out of fossil fuels;
be based on the support mechanisms for energy efficiency and for the development of renewable energy; and
endorse major infrastructure projects, including the mutual link between energy transport and public transport.

4 Environmental permits and approvals

4.1 What environmental permits and approvals are required in your jurisdiction, and when are these typically required?

Environmental permits are regulated at the regional level. The environmental permits and approvals that are required vary from region to region.

Generally speaking, in relation to the three regions, an environmental permit is needed for:

construction works (eg, structural works, function changes, division of housing units);
land parcelling;
the exploitation of facilities or activities with a potential impact on the environment; and
retail activities.

However, the regional lists of activities that require a permit may differ (to a limited extent).

A permit must be obtained before the acts to which the permit relates are performed.

4.2 What is the process for obtaining environmental permits and approvals? If a permit or approval is refused, can the decision be appealed?

The processing of permit applications is primarily a matter for the local or regional administration. In most cases, there is an administrative possibility of appeal. In the last resort, a jurisdictional appeal can be lodged. As environmental permits are regulated at the regional level, the specific processes for obtaining environmental permits and the competent authorities differ from region to region.

4.3 What is the duration of environmental permits and approvals?

Environmental permits are usually granted for an unlimited period in the Flanders Region, but there are exceptions. In the Brussels Capital Region and the Walloon Region, environmental permits are always granted for a limited period, although in principle an extension may be requested once this has expired. However, the expiry periods should not be overlooked before the permit is implemented. The grounds for expiry of the permit and the expiry periods differ from region to region.

4.4 What, if any, requirements and restrictions apply to the transfer of environmental permits and approvals?

In case of a change of operator, environmental permits must be taken over by the new operator. This can be done by reporting the transfer of operations to the competent authority. The procedures for doing so differ from region to region. Building permits attach to the property and should not be formally taken over by the new owner.

4.5 What ongoing rights and obligations apply to the holder of an environmental permit or approval?

After obtaining a permit, a number of obligations rest on the holder. For example, the permit holder must:

post the permit on the site;
report the commencement works to the competent authority;
comply with and implement the conditions and charges imposed in the licence, where applicable; and
implement the permit within a specified period (expiry period). If the deadline expires prior to implementation, a new application is required. Expiry periods differ from region to region. In certain cases, the expiry period may be suspended. An extension is also possible in certain cases.

4.6 What are the consequences of breach of an environmental approval or permit?

Breach of an environmental permit (or acting without the required permit) can be sanctioned by criminal and administrative law. Each region has determined the criminal penalties for the various permitting obligations. The levels of fines and prison sentences may differ. The court may also impose restorative measures. Administrative enforcement is also possible, although not in combination with criminal convictions (so-called ‘non bis in idem'): administrative measures such as cease-and-desist order can be imposed, as well as administrative fines and/or administrative enforcement measures, possibly in combination with a penalty payment.

5 Waste management

5.1 How is ‘waste' defined and regulated in your jurisdiction? Does the regime vary depending on the type of waste involved?

Waste management is regulated at the regional level. The regional regulations are strongly rooted in EU law and therefore do not differ significantly. ‘Waste' is defined as "any substance or object which the holder discards, intends or is required to discard". Certain materials are explicitly excluded from this definition.

General rules on waste management apply and the regional regulations stipulate who bears responsibility for the costs. The measures are based on the universal waste management hierarchy and thus promote, in the following order, prevention, reuse, recycling, incineration (including recuperation) and removal. However, the measures must also guarantee the overall best results for both the environment and general health, meaning that deviations from the hierarchy are possible.

The applicable regime varies depending on the type of waste involved. The respective regional authorities have issued a list of waste materials with reference to the corresponding EURAL Code. In general, a distinction is made between industrial waste, household waste, hazardous waste and special waste. Upon implementation of EU Directive 2018/851, bio-waste will also have its own regime.

5.2 What key rights and obligations apply to waste operators in your jurisdiction? What are the consequences of breach?

Operators that collect, deal in and transport waste must be registered as such. When waste is collected and transported, selectively sorted waste must remain separate; the operator can refuse to collect the waste if it is not. The disposal of waste and preparatory operations prior to disposal are subject to a permit requirement. The recovery of waste and preparatory operations prior to recovery are subject to a permit or reporting requirement. Specific conditions may apply in different sectors. Waste operators that operate a dump or incineration plant are subject to environmental contributions, taxes and fees, to reduce waste dumping and incineration.

Waste collectors and dealers must keep a register of collected and traded waste. Waste processors must keep a register of processed waste materials and the processing method (eg, dumping, incineration with energy recuperation, other incineration, recovery and recycling).

The possible consequences of any breach include administrative prohibition orders, fines, imprisonment and – for environmental taxes – warrants and legal mortgage.

5.3 Are any producer responsibility regimes applicable in your jurisdiction?

In order to promote the most useful application of waste in light of the waste hierarchy, an extended producer responsibility obligation exists. As this regime is based on the EU Waste Framework Directive, the regimes are alike across all Belgian regions. Each natural or legal person that professionally develops, manufactures, treats, processes, sells or imports products (a ‘producer') bears responsibility. The regulations contain waste-specific provisions in this regard. Extended producer responsibility includes:

operational and financial responsibility for the collection and processing of waste;
take-back and acceptance obligations;
obligations concerning the disclosure of information; and
obligations concerning the promotion of eco-efficiency and eco-design.

6 Hazardous substances

6.1 What are the key features of the regulatory regime governing hazardous activities and substances in your jurisdiction?

The regulatory regimes governing hazardous activities and substances in the Belgian regions are modelled on EU legislation.

The EU Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (1907/2006) (REACH) has shifted responsibility from public authorities to industry with regard to:

the assessment and management of the risks posed by chemicals; and
the provision of appropriate safety information.

REACH applies to a broad range of companies (manufacturers, producers, importers and even downstream users) in a wide range of sectors. Companies must:

collect and assess information on the properties and hazards of substances; and
register their substances with the European Chemicals Agency for:
- evaluation;
- authorisation of the most concerning substances; and
- restriction of the production, use or commercialisation of those substances that constitute an unacceptable risk for human health or the environment.

Different safety sheets and chemical cards are developed to work safely with hazardous substances. Material safety data sheets contain information on the composition and risk of a product, and on (first aid) measures in case of incidents. The REACH cooperation agreement between the federal and regional authorities allows for coordinated action in order to guarantee coordinated implementation, enforcement and scientific support.

The classification of a hazardous substance is based on the hazard class, hazard category and hazard indications, as set out in the Classification, Labelling and Packaging Regulation (1272/2008). This EU regulation aligns the EU system on the classification, labelling and packaging of chemical substances and mixtures with the Globally Harmonised System.

6.2 What key rights and obligations apply to operators of hazardous sites in your jurisdiction?

SWA3 – the cooperation agreement between the federal and regional authorities implementing the EU Seveso Directives – controls major accident hazards involving dangerous substances and requires industrial establishments to report to the national authorities. Operators of Seveso sites must inform the coordinating authority regarding the quantity of the hazardous substances that they work with. The agreement contains different obligations for upper-tier and lower-tier sites, corresponding to more or less stringent requirements respectively. An essential obligation for upper-tier sites is the production of a safety report. All Seveso operators bear a general duty of care and demonstration, which obliges them to:

take all measures necessary to prevent major accident hazards; and
be able to demonstrate that these measures are adequate and effective.

The (regional) environmental and permitting legislation also includes several requirements regarding the risk management of sites working with hazardous substances (eg, construction requirements, safety distancing requirements, fire safety requirements).

Federal legislation on welfare at work regulates workplaces with hazardous substances and imposes specific obligations on employers in this regard (eg, risk analysis).

6.3 What reporting requirements apply to environmental accidents in your jurisdiction?

In case of environmental incidents, damage or imminent threat thereof, despite preventative measures, operators must self-report to the competent authorities and provide all necessary information. When there is a risk of cross-regional damage, information must be exchanged between the regions in order to take the necessary measures.

For Seveso sites, contingency plans and protective measures must be prepared in advance in order to respond efficiently in case of accidents and emergencies. In the event of a major hazard incident, operators must immediately inform the 112 Centre and the Coordination and Crisis Centre of the federal government. The latter will warn Internal Affairs, the work safety minister and the inspection authorities, among others. The operator will provide the Coordination and Crisis Centre and the inspection services with the following information:

the circumstances of the accident;
the hazardous substances involved;
the emergency measures that have been taken; and
all relevant information which allows for the evaluation of the consequences for human health, the environment and property.

6.4 What is the process for investigating environmental accidents in your jurisdiction?

Pursuant to the EU Environmental Liability Directive, the competent authorities in the Belgian regions can oblige operators that have caused an environmental accident to:

report additional information on the accident and the damage caused; and
take the necessary mitigating and corrective measures.

They can give instructions to operators and even to take the necessary measures themselves (at the expense of the operator). Designated supervisors that ensure compliance with the environmental legislation can exercise their general supervision rights if an environmental violation is suspected (eg, right to access, right to take samples).

For Seveso sites in particular, regional inspection teams will monitor whether operators are compliant with the requirements. They have agreed on a coordinated inspection system and inspection plan covering all Seveso sites. The inspection teams will:

collect all information necessary for a full analysis of the technical, organisation and managerial aspects of the accident;
take the appropriate steps to ensure that the operator takes all necessary corrective actions;
make recommendations for future preventive measures; and
ensure that the operator takes all necessary urgent measures as well as medium and long-term measures.

6.5 What are the potential consequences of breach of the regulatory regime governing hazardous activities and substances – both for operators themselves and for directors, managers and employees?

Persons that breach the regulatory regime governing hazardous activities and substances can face administrative prohibition orders, fines and/or imprisonment. Both natural and legal persons can be held responsible under both the administrative and criminal sanctioning framework. There is no specific corporate liability scheme for environmental violations, but natural persons within corporate entities can be held liable in person according to the general liability principles. In practice, often both the corporate entity and natural persons within the corporate entity are found responsible for the environmental breach and are prosecuted accordingly.

If the operator of an establishment fails to take adequate measures to prevent major hazard accidents and to minimise the consequences, the permitting authority will prohibit the further operation and exploitation of the establishment.

7 Contaminated land

7.1 What are the key features of the regulatory regime governing contaminated land in your jurisdiction?

Anyone that has caused soil contamination will be held liable and may be subject to administrative or judicial proceedings in order to remedy the contamination.

Contamination generated prior to a specific date (which is different in each of the three Belgian regions) is qualified as ‘historic'. In practice, the obligations resulting from the existence of historic pollution are less severe than those resulting from the existence of ‘new' pollution (ie, pollution caused after this specific date).

In Flanders and Brussels, any transfer of land which is considered to be possibly contaminated (according to the regional soil inventories) will in principle be subject to the execution of investigation and remediation obligations prior to the transfer of land.

In the three Belgian regions, some grounds for exemptions to the obligations of remediation are available (eg, the so-called ‘permit defence' and the ‘state-of-the-art defence').

Decisions ordering the remediation of soil contamination are taken by the regional authorities. These decisions may be subject to an administrative appeal.

7.2 Who bears the liability for the clean-up of contaminated land? Can such liability be excluded or subcontracted/delegated?

The person that bears liability for the clean-up of contaminated land is the person that has caused the soil contamination. If that person cannot be identified (or is insolvent), the operator of the contaminated land will be held liable. If there is no (solvent) operator, the owner of the land will be held liable.

Under Belgian law, it is possible for parties to agree on a way to adjust the liability regime (eg, the purchaser of contaminated land can undertake to proceed to the clean-up instead of the seller which has caused the pollution).

In Wallonia, agreements between parties on the transfer of soil liabilities are not binding on public authorities. In other words, the party that is held liable for soil contamination pursuant to the contract may not be the same party held liable towards the authorities pursuant to the applicable regulations.

7.3 How is liability determined in cases where multiple parties have contributed to the contamination?

Several parties may be held jointly liable towards the authorities in case of contamination caused by multiple parties. Determination of the liability of each party will then depend on its contribution to the contamination. If necessary, a soil expert will be appointed by a court, at the request of a party, in order to provide an opinion on the respective contribution of each party to the soil contamination.

Depending on the origin of the contamination and the types of activities carried out by each party on the land, it will be possible in some instances, to determine how each party has specifically contributed to the pollution.

7.4 Can individuals bring proceedings against polluters, landowners and/or occupiers where they have been affected by contamination? If so, which court/tribunal is competent to deal with such proceedings?

Individuals can bring proceedings against polluters, landowners and/or occupiers where they have been affected by contamination. The competent court is usually the court of first instance at the place where the pollution has occurred (or, alternatively, where the polluter has its registered office).

8 Reporting, auditing and disclosure

8.1 Are any public registers of environmental information maintained in your jurisdiction? If so, what are they, who can access them and how? What possibilities exist for third parties to access environmental information and what is the process for doing so?

Yes, all urban planning information (eg, applicable regulations, permits granted (construction and environment)) is retained by the municipality. In principle (with the exception of criminal law), most of this information is available under the regulations governing public access.

Third parties can access this information by requesting a town planning extract. This is usually done digitally (by email or by submitting an online form at the municipality).

The same applies to soil contamination. There is a public authority in each region that makes an inventory of the soil of the entire region (this process is ongoing). When selling land, it is obligatory to request a soil certificate.

Some of the information can be consulted online (eg, soil information, applicable zoning regulations, heritage inventory).

Information on construction and environmental infringements is not fully available to third parties. This information is covered by the confidentiality of the criminal investigation.

8.2 What environmental reporting requirements apply to companies in your jurisdiction?

In the context of real estate transactions, regulations that trigger reporting requirements apply. In principle, notaries must report all information about the condition of the soil and any construction or environmental infringements. For example, a property transfer cannot proceed immediately if it is found that there is serious soil contamination that requires remediation.

8.3 Are companies in your jurisdiction subject to environmental audit requirements?

Yes, so-called Class 1 companies (annex to the Project/Environmental Impact Assessment Directive). These include facilities such as:

oil refineries;
power plants (nuclear, thermal); and
blast furnace plants for metal production.

Companies with establishments for major accident hazards involving dangerous substances (Seveso Directive) are obliged to have environmental audits conducted. In principle, these are conducted approximately every three years. For new companies, this must be done within two years of commencing operations.

8.4 When and how must environmental issues be disclosed (eg, in the event of the potential sale of land or a merger or acquisition)?

Real estate transactions trigger a requirement for the disclosure of environmental issues. The information duties are stronger and mandatory in the case of asset deals than in share deals, where contractual freedom is much broader. However, this mainly takes place between the parties only; there is in general no obligation to disclose to the government. Most of the information that parties must disclose to the authorities (soil certificate, urban development extract) is also known to the authorities themselves.

The environmental and urban development regulations are public order regulations and breaches are punishable under criminal law. In principle, therefore, everyone is subject to an obligation to report or remedy construction and/or environmental offences.

9 Tax

9.1 What environmental and climate taxes are applicable in your jurisdiction?

As Belgium is a federal country, with power divided between the federal state and the Flemish, Walloon and Brussels Capital Regions, each of these entities, together with the local authorities, can issue legislation imposing climate taxes. Environmental and climate taxes can thus be federal, regional or local, and can deviate significantly depending on the region in which a company is based. Although there is a large variety of environmental and climate taxes, the contribution of environmental and climate tax revenue to Belgium's total economic output is marginal, as this comprises only around 2% to 3% of Belgian gross domestic product (according to Eurostat).

The most significant types of environmental and climate taxes are as follows:

taxes on energy sources;
taxes on energy consumption;
taxes on the transportation of energy and goods; and
taxes on pollution.

Regarding taxes on energy sources, the federal tax on nuclear power is the most important federal environmental tax and is imposed on the operators of Belgian nuclear power plants. As these power plants are scheduled to close in 2025, we expect that an alternative for taxation will be imposed by the federal government in the future.

Regarding taxes on energy consumption, the most important taxes are the federal value added tax (VAT) and regional taxes imposed on:

energy products for transport purposes (eg, unleaded petrol, diesel, liquefied petroleum gas, gas, kerosene; and regional taxes on cars and trucks using the road);
energy products for stationary purposes (eg, light and heavy fuel oil, natural gas, coal, coke, biofuels, electricity consumption and production, heat consumption and production); and
greenhouse gases (eg, carbon content of fuels, emissions of greenhouse gases).

Finally, other significant taxes are imposed for:

the transportation of electricity via the grid (regional); and
pollution (waste, soil contamination, air pollution) (mostly regional and local).

9.2 Are any exemptions or incentives available?

The approach to taxation in Belgium is notoriously unsophisticated: in recent years, taxes have primarily been levied to close gaps in the budget.

More recently, however, several tax exemptions and incentives have been introduced in an effort to change consumption patterns and we have slowly begun to notice a (small) shift in the tax burden. Due to the diverse nature of the environmental tax legislation, we cannot provide a general list of exemptions or incentives. However, the following are some good examples which reflect this shift towards green taxation, based on the principle that less pollution will be rewarded:

Households that produce their own solar energy receive a discount on the tax for their use of the electric grid; in future, this incentive will be higher for households that can spread their use of electricity across the day and not during peak times.
Important investments relating to the environment and climate (eg, replacing and/or renovating old energy-inefficient buildings or installing enhanced technology) are subject to a more favourable VAT rate (6% instead of 21%).
In relation to electric or hybrid cars, an important tax incentive is granted in the deduction of costs and depreciation (100% instead of 50% for other types of cars), as well as a complete exemption from road taxes.

9.3 What strategies might parties consider to mitigate their environmental and climate tax liabilities?

The first strategy is to consider smart investments in order to prevent or avoid potential high taxes or environmental penalties. For example, in the Flemish Region, from 2025, serious penalties – which may become stricter from year to year – may be imposed if:

a building does not provide the requisite number of electrical charge points; or
an office/residential building does not meet the energy efficiency requirements.

Drawing up a smart investment schedule could help you to avoid unpleasant surprises. Smart investments can also help to reduce tax liabilities as they may allow for a more interesting depreciation scheme to be used, affording major tax benefits.

Another good strategy for companies is to identify the region in which their specific activities will be taxed most favourably. Given Belgium's federal structure, many environmental and climate taxes are regional or local. The differences both in taxation itself and in the enforcement of environmental and climate tax legislation can be significant, depending on whether a company is based in Flanders, Wallonia or the Brussels Capital Region.

10 Insurance

10.1 What types of environmental insurance arrangements are put in place in your jurisdiction? Is there any mandatory environmental insurance in your jurisdiction? How sophisticated is the environmental insurance market? What, if anything, is excluded from insurance cover?

Environmental insurance arrangements in Belgium are becoming increasingly common. As from 1 July 2018, building contractors and architects are obliged to insure their professional liability for a period of 10 years, starting from acceptance of the building works (mandatory). Recently, some insurance companies have started offering insurance against appeals on environmental permits (ie, an insurance policy for building promoters and landowners that covers risks linked to the cancellation or suspension of an environmental permit) (not mandatory).

10.2 What are the ‘green finance' arrangements in your jurisdiction? To whom do they apply? What, if any, obligations do they impose? Who is responsible for monitoring, enforcing and reviewing such arrangements in your jurisdiction?

There are different sources of green finance in Belgium, including – most significantly – funding opportunities. In addition to (limited) funding provided through European structural and investment funds, finance in Belgium is available in the different regions from local governmental resources for various activities. In addition, energy services companies facilitate access to finance for energy efficiency investments through energy performance contracting.

Green certificates are another source of financing which aim to promote low-carbon power generation by providing producers of electricity from renewable energy sources with green certificates for the power generated.

Funding also comes from sustainable investing. In the context of sustainable investing or environmental, social and corporate governance (ESG) investing, the sustainability of a company is assessed based on its ESG label. Certificates and labels relating to the sustainable and green character of investments are awarded by entities such as Forum Ethibel, a non-profit organisation involved in the rating, independent monitoring and certification of financial products. The use of this label may fall under the rules on the information obligations of financial institutions. Under Belgian law, the Financial Services and Markets Authority can take action, including the imposition of administrative penalties, against financial institutions that do not comply with the information obligations set forth in the Act of 2 August 2002 on Financial Supervision. If a product uses the ESG label but is in fact not compliant with the quality standard, clients and competitors can bring legal action. Belgian law also provides for the possibility for consumers and small and medium-sized enterprises to initiate class actions.