Premiums, investment aids: how the Walloon Region can help you to implement your climate strategy

Picture fom  Nattanan Kanchanaprat de Pixabay

Are you an SME or a large company located in Wallonia? Do you want to know what subsidies you are entitled to from the Walloon Region at each stage of your climate strategy? This article is for you. The energy crisis and the recession are quick to reinforce the conviction of some business leaders that the climate transition necessarily means a loss of profitability.  However, there are support schemes developed by the Walloon Region to enable you to pursue each stage of your strategy and accelerate the climate transition. 

Where do the existing mechanisms come from? 

In 2004, the Walloon Government developed a series of incentives to encourage companies carrying out an investment programme with the objective of environmental protection or sustainable energy use (SEU) in the Walloon Region. According to Hélène Delforge, subsidy advisor at GS Subsides, these two support schemes, as well as the (energy) audits that we will detail below, are the main mechanisms currently used by Walloon companies to accelerate their climate transition. 

Which support schemes am I entitled to at different stages of my climate strategy?

Your climate strategy is your action plan to achieve your transition to a low-carbon economy. In our vision, your strategy is built around three pillars: understand, act and engage. 

• UNDERSTAND 

 "Understanding" means measuring your carbon footprint (estimation in 2 minutes) and understanding it by visualising your main sources of emissions. This is the first essential step of your climate strategy. The result of a carbon report will guide you in the implementation of actions to reduce your footprint. 

In addition to the two aids discussed in this article, another mechanism that SMEs use to calculate their impact is internal (energy) audits. These make it easier to identify energy-intensive assets (machines, equipment, etc.). As Hélène Delforge points out, these audits are particularly advantageous for SMEs. Indeed, these audits can be financed by the Walloon Region up to 75% for SMEs.In other words, for an audit costing 6,600 euros, you will receive 5,000 euros in subsidies and will have to pay "only" 1,600 euros. 

You can have direct access to our platform and expertise through our partner Smart2Circle, directly eligible for this type of mission and certified as a service provider by Chèques-entreprises.

To raise awareness of your carbon footprint, you can also benefit as an SME from the Chèque-Économie circulaire (EN: Circular Economy Voucher). This aid, approved in December 2022 and co-financed by the ERDF, applies to all consultancy services. In concrete terms, this Chèque-Économie circulaire aims to support the company in its reflection on eco-design, the improvement of its synergy with other companies in the exchange or sharing of certain goods or materials, or the optimisation and improvement of its industrial or organisational processes. The intervention rate is 75% with a threshold of €45,000 excluding VAT over 3 years. You can consult the following article for more information. 

• ACT

The pillar “Act” is about taking steps to reduce your footprint by setting ambitious reduction targets. 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
• etc.) 

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 sources of emissions through our platform, you will be able to consider areas of reduction within your production process that you had not thought of and that are potentially covered by the environmental protection and EDU investment aids. We will come back later on to the eligibility criteria that your investment programme must meet. A concrete example of GS Subsidies: a carpenter's workshop investing in new heating systems for its production process can be granted a 30% premium for a biomass heating system if the latter is fuelled by part of its waste.

• ENGAGE

The pillar “Engage” is about inspiring your stakeholders and your sector. By pursuing an ambitious reduction strategy, you contribute to shaping a low-carbon ecosystem. It is difficult to identify a specific support scheme for "getting your stakeholders on board" with the climate transition. 

However, there are various formulas for stimulating reflection on climate solutions, such as collective coaching.  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: for example, on how to structure or communicate more effectively on your climate actions towards your partners.

How can I know if I am eligible for this type of aid?

To be eligible for investment aid, you must have a place of business in Wallonia (place of business, activity headquarters, branch office, etc.) and carry out an investment programme aimed at promoting (1) environmental protection or (2) sustainable energy use (SEU). 

The amount of aid will vary according to several factors: (1) the category of the company, (2) the location of the investment and (3) the type of investments planned. For more information, please contact GS Subsides or consult the brochure of the Walloon Public Service. The effectiveness of this aid depends largely on your profile. As Hélène Delforge points out, this aid currently concerns manufacturing companies,  i.e. a very restricted profile. For the expert, this aid is currently less relevant for other sectors of activity such as consultancy firms, even though technically there is nothing to prevent them from receiving it. 

In terms of legal personality, your company must be : 

• either a natural person who is a trader or self-employed, or associations formed by such persons; 
• or one of the commercial companies listed in Article 2, § 2, of theCompanies Code(FR: Code des sociétés), including agricultural companies; 
• or a European Economic Interest Grouping.  

Legal persons governed by public law and non-profit organisations are excluded from this aid.

You must also ensure that your activity is not included in the NACE BEL 2008 list of activities excluded from this type of aid. This includes, among others

• Extraction activities (mining, peat, radioactive material, hydrocarbons)
• Production, distribution and treatment activities (electricity, gas, steam, waste)
• Passenger and freight transport activities (maritime, coastal, inland waterway, air)
• Wholesale and retail trade in motor vehicles, motorbike accessories
• Certain services (real estate development, radio, press, film activities, television broadcasting, etc.)
• Certain professions (architecture, surveyors, artists, entertainment, gambling)
• Etc. 

To be eligible for investment aids (environmental protection & EDU), you will need to ensure that your investment programme meets the minimum investment thresholds for eligibility, which are :

• Minimum €20,000 (excluding VAT) for an SME;
• Minimum €25,000 (excl. VAT) for a large company;

Finally, the SPW (FR: Service public de Wallonie) recommends you to submit your application before any firm commitment linked to the investments (purchase order, etc.) and that you clearly indicate the amount of aid required for the project. Last but not least, you must not be a company in financial difficulty. 

How can I make my investment programme eligible?

In order to be eligible for aid specifically aimed at environmental protection, the investment made must aim to exceed existing or future EU standards. Your ability to anticipate the change in these standards is crucial to qualify for this aid.  The investments eligible for this specific aid include

• investments made by an SME, allowing early adaptation to future Community standards, provided that the investments are made and completed more than 3 years before the date of entry into force of the standard;
• investments made by a small enterprise, allowing early adaptation to future Community standards,  provided that the investments are made and completed between 1 and 3 years before the date of entry into force of the standard.

To be eligible for specific aid for the sustainable use of energy (EDU), the investment made must cover : 

• the reduction of energy consumption in the production process ;
• the development of energy from renewable energy sources;
• the development of high-efficiency cogeneration facilities.

 This category also covers investments made to reduce energy consumption in your production process. In other words, an investment in an air/water heat pump, or in the production process: insulation work on the production line, or improvements in energy recovery or storage, etc. This is the example of the carpenter’s workshop we mentioned earlier.

Is there any practical information I should be aware of while applying ? 

The grant is subject to a long procedure. In this respect, Hélène Delforge recommends not underestimating the length of the subsidy applications, which can easily be spread over three years. The main obstacle to the granting of these subsidies is  the lack of rigour on the part of the applicant companies. This is due to the fact that the file is not always entrusted to the administrator and passes through too many hands, resulting in an application that does not meet the criteria.

As mentioned above, to avoid unpleasant surprises and to be sure that all the conditions are met, the SPW Economy recommends you to obtain an authorisation to start your investment programme before honouring your first investment-related commitments (purchase order, etc.). It advises you to submit an application for an Enterprise Passport before submitting your application for aid. 

Once you have obtained the start-up authorisation, you have a maximum of 6 months to complete the application form for investment aid. 

How can the existing schemes be improved? 

The investment support scheme for environmental protection and EDU is not sufficient on its own to accelerate the climate transition. However, it can always be improved. One avenue to explore, according to Hélène Delforge, would be the creation of a bonus enabling a company to be rewarded for reducing its energy impact.  Another avenue of reflection raised: the development of a bonus for companies in the most polluting sectors. In other words, identifying the sectors in need of renewal and multiplying the levers of action for companies in these sectors, notably via a targeted bonus. 

Fortunately, according to Hélène Delforge, young companies have a flexible model and are also more aware of the existence of these mechanisms than more mature companies. But for the advisor, too many companies still make the mistake of not adapting their activities to the new challenges of today. Some business leaders persist in believing that climate transition is synonymous with deprivation of freedom and loss of profitability , a mindset that contributes to maintaining inaction. 

Let’s act together

As you probably know, inaction is not part of Tapio's vision. Democratising climate action also means informing you about the available support schemes that can help you to make the difference. Let's be clear: the amount of this aid alone will not be enough to ensure your climate transition. However, in combination with other mechanisms, they will help you to make each step of your climate strategy a little more concrete and ensure the long-term sustainability of your business. 

You can't reduce what you don’t understand. Visualising your main sources of emissions is essential in your climate approach. Any questions ? Estimate your carbon footprint or start discussing with one of our experts. 

This article was written in collaboration with Hélène Delforge, subsidy advisor at GS SUBSIDES.

Founded in 1998, the company has processed more than 14,200 files for an amount of aid received by its clients of more than 300,000,000 €.

Sources

• Décret relatif aux incitants régionaux en faveur des grandes entreprises, March 11, 2004, Wallex, available at:https://wallex.wallonie.be/contents/acts/20/20193/1.html?doc=3770&rev=3099-8724(Accessed on December 13, 2022).
• “Une aide financière pour les investissements réalisés en Wallonie” available at:https://www.1890.be/solution/une-aide-financiere-pour-les-investissements-realises-en-wallonie#:~:text=l'investissement-,Une%20aide%20financi%C3%A8re%20pour%20les%20investissements%20r%C3%A9alis%C3%A9s%20en%20Wallonie,une%20exon%C3%A9ration%20du%20pr%C3%A9compte%20immobilier(Accessed on December 12, 2022).
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• “Aide à l'investissement. Environnement et Utilisation durable de l'énergie, brochure explicative”,version août 2022. Service public de Wallonie, available at:http://forms6.wallonie.be/formulaires/BrochureENV-UDE.pdf(Accessed on December 12, 2022). 
• “Investissement environnementaux et utilisation durable de l’énergie, Guide des aides publiques”, available at:https://www.guideaidespubliques.be/proceed/pdf?postid=375(Accessed on December 13, 2022)
• VERHEYE, S. “Les aides à l’investissement en pratique”, Cellule environnement, January 24, 2019, available at:https://environnement-entreprise.be/article/aide-a-linvestissement-environnement-et-utilisation-durable-de-lenergie/(Accessed on December 13, 2022).
• THIRY, I., “Les aides à l’investissement en faveur de la protection de l’environnement et de l’utilisation durable de l’énergie”, Département de l’Investissement, available at:https://api.1890.be/wp/wp-content/uploads/2018/09/Présentation_UDE-ENV-UDE2020-GNV_février_2020.pdf(Accessed on December 13, 2022).