Commission Endorses Belgium’s €5.3 Billion Modified Recovery And Resilience Plan, Including A REPowerEU Chapter – EQ

In Short : The inclusion of a REPowerEU chapter demonstrates Belgium’s commitment to investing in renewable energy sources and transitioning towards a greener economy. This chapter will likely focus on bolstering renewable energy infrastructure, improving energy efficiency, and promoting sustainable practices across various sectors.

In Detail : Today, the Commission has positively assessed Belgium’s modified recovery and resilience plan, which includes a REPowerEU chapter. The plan benefits from €5 billion in grants and €264 million in loans and covers 40 reforms and 119 investments.

Belgium’s REPowerEU chapter, worth €726 million, includes four new reforms, 17 new investments, as well as seven transferred investments from the original plan, and one scaled-up investment to help deliver on the REPowerEU Plan’s objective to make Europe independent from Russian fossil fuels well before 2030. The chapter focuses on promoting energy efficiency in buildings, decarbonising industry, accelerating the deployment of renewable energy, increasing the production and uptake of renewable and fossil-free hydrogen, and decarbonising road transport.

In addition, Belgium has proposed changes to 63 measures in its original recovery and resilience plan.

Belgium’s changes to the original plan are based on the need to factor in:

• objective circumstances hindering the fulfilment of certain measures as originally planned, including the very high inflation experienced in 2022 and supply chain disruptions caused by Russia’s war of aggression against Ukraine;
• the request to take up €264 million in RRF loans; and
• the downward revision of its maximum RRF grant allocation, from €5.9 billion to €4.5 billion, as a result of the June 2022 update to the RRF grants allocation key, which reflects Belgium’s comparatively better economic outcome in 2020 and 2021 than initially foreseen.
• To finance the modified plan, Belgium has requested to transfer to the plan a part of its share of the Brexit Adjustment Reserve, in line with the REPowerEU Regulation, amounting to €229 million. Belgium has also requested a loan of €264 million. These funds, added to Belgium’s RRF and REPowerEU grants allocation (€4.5 billion and €282 million respectively) make the approved overall modified recovery and resilience plan worth €5.3 billion.

A boost to Belgium’s green transition

The modified plan has a strong focus on the green transition, allocating 51% of the available funds to measures that support climate objectives, well above the required target of 37%.

The measures included in the REPowerEU chapter contribute significantly to the green dimension of the plan.

For example, the reform of the appeal procedures of the Council of State aims at accelerating the deployment of renewable energy in Belgium by removing administrative bottlenecks linked to investments in renewable energy, which should ultimately help boost the share of renewable energy. Another measure supports the equipment of social housing in Wallonia with heat pumps and solar panels. A call for projects for the decarbonisation of industry foresees financial incentives for investments in the energy transition of industries in the Walloon region and in the development of new industries for green technologies. A new investment will offer subsidies to companies in Flanders investing in research and development activities related to the production of innovative technologies in the field of solar energy, as well as to companies investing in the electrification of port infrastructure in Flanders. Among the new mobility measures, an additional investment in charging infrastructure for busses in the Brussels-Capital region will allow for reduced emissions from urban public transport.

Reinforcing Belgium’s digital preparedness and social resilience

The Belgian plan’s digital ambition remains strong, maintaining 27% of its total allocation to the digital transition despite the downward RRF allocation revision. The measures included in the plan promote the digital transition in a range of areas, including cybersecurity, connectivity, public administration and public services, education, health and culture.

The modified plan’s social dimension also remains substantial, with the social and educational measures remaining largely unchanged. Despite the decreased financial contribution, the modified RRP continues to focus heavily on building social resilience, with measures oriented towards employability, including of vulnerable groups, and enhancing skills. The modifications to reforms concerning education and employment of vulnerable groups mainly address unexpected implementation issues such as extended stakeholder negotiations or unexpected legal difficulties, but do not lower the ambition of the plan.