Netherlands

NL-7:Energy Investment Allowance (EIA)

Policy Description

Energy Investment Allowance (EIA) is a tax relief programme which gives a direct financial advantage to companies that invest in energy-saving equipment and sustainable energy.

Description

Energy Investment Allowance (EIA) [1] is a tax relief programme which gives a direct financial advantage to companies that invest in energy-saving equipment and sustainable energy. Entrepreneurs may deduct 44% of the investment costs for such equipment (purchase and/or production costs) from their company's pre-tax profits, over the calendar year in which the equipment was purchased. Investment costs up to a maximum of EUR 113 million may be reported per calendar year.

Annually the ministry publishes a Technology Eligibility List, a list of the technologies that are eligible for the fiscal scheme. The Energy List [2] is updated on an annual basis. Technologies that reached a certain market share of which the costs decreased substantially are taken off the list.  Companies can also fill a request to put a specific energy saving technology on the list. If the technology meets certain criteria it will be integrated in the list.

 

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Economic, Incentives & Subsidies

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 1997

Policy Linkages

Supports Long-Term Agreements on Energy Efficiency Effort Defining
Supports Permits under the Environmental Management Act Supporting Measure
Supports Long-term Agreement on Energy Efficiency for EU ETS enterprises (LEE) Effort Defining

Agencies Responsible

Ministry of Economic Affairs
Ministry of Finance
AgentschapNL

Primary Objective: Energy

Objective

Stimulate investments in energy efficient technologies

Target Group

In principle any company

Driver of energy consumption or emissions affected by policy: Technology implementation rate (of efficient technologies)

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Quantitative Target? no

Progress Monitored? yes

Verification Required? no

Enforced? no

Requirements on the Target Group

  • Report investments within three months of purchase to AgentschapNL [3]
  • Permits: If a building permit or Public Works and water Management Act (Wbr) permit is compulsory for an investment, this permit must have been issued by the competent authority at the application time for EIA via the IRWA. For investments in sustainable energy, such as solar energy, wind energy and energy from biomass for which an environmental permit is required, the application must have been issued before applying to the EIA.

Support by Government

N/A

Implementation Toolbox

A technology eligibility list is provided to support implementation of the Energy Investment Allowance.

Complexity of Implementation

Government

Requires only a check on eligibility of measures against an existing technology list, whether measure has been implemented.

Target Group

Only reporting on the implementation of the measure.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions Not Applicable Medium
Estimated costs/benefits for industry Negative, reduces industry costs Negative, reduces industry costs
Estimated cost for government Not Applicable Not Applicable
Other Benefits
General Benefits Industry increases its energy efficiency and reduces its CO2 emissions, which provides benefits for the environment and economy, improving competitiveness
Specific Benefits • Reduced costs on energy efficiency equipment due to tax relief; • Increased implementation of energy efficiency equipment.

References & Footnotes

References

[1] Energie Investerings Aftrek http://www.senternovem.nl/eia/

[2] AgentschapNL (2012). Energy and companies, Energy list 2012, http://www.agentschapnl.nl/content/brochure-energie-en-bedrijven-energielijst-2012

[3] AgentschapNL eLoket (AgencyNL digital portal) : http://www.agentschapnl.nl/organisatie/eloket

Footnotes

(*1) the national energy agency has undergone various mergers and name changes in the last decade, from Novem (the Dutch agency for Energy and Environment), to SenterNovem to currently AgenctschapNL (AgencyNL), see: http://www.agentschapnl.nl/

Other Useful Resources

Dutch Investment Tax Boosts Renewable Energy and Energy Efficiency

by Ulrika Lomas, Tax-News.com, Brussels, 23 July 2012. Alluding to figures contained in its EIA annual report, the ministry explains that as a result of the tax reduction, companies in the Netherlands invested almost EUR1.5bn (USD1.8bn) in renewable energy and energy efficiency last year, 45% more than in 2010. The ministry says that the investments resulted in energy savings and carbon dioxide reductions equivalent to the emissions of 330,000 households.