Belgium Spends Over 10 Billion Euros Backing Fossil Fuels

Belgium devotes more than 10 billion euros a year to supporting fossil fuels, according to a federal review published as the government scrambles to find roughly the same sum to shore up its budget. The fifth federal inventory of fossil fuel subsidies — a near 200-page spending review drawn up by several federal departments — identifies billions in potential savings that experts say could help close the deficit while advancing the country’s climate goals.

According to RTBF, direct fossil fuel subsidies alone reached about 10.8 billion euros for reference year 2024, equivalent to 1.7 percent of GDP. The figure is being presented as a catalogue of options for the coalition government of Prime Minister Bart De Wever, which is searching for about 10 billion euros to correct the federal accounts through 2031.

A Spending Review Landed at a Budget Crossroads

The report was requested by the government to analyse public spending and identify possible savings. It was produced jointly by SPF BOSA (Stratégie et appui), SPF Finances, SPF Santé, SPF Economie, the Federal Planning Bureau and the Finance Inspectorate. As the official BOSA publication page notes, the review assesses the budgetary cost of these measures along with their economic, social and environmental effects, and develops a range of reform options.

Subsidies take the form of tax, parafiscal or budgetary mechanisms: excise reductions, sectoral exemptions, preferential VAT rates, derogations and reimbursement schemes. Beyond the 10.8 billion euros in direct subsidies, the inventory adds 225 million euros in indirect subsidies, 3.1 billion euros in environmentally harmful subsidies and 1 billion euros in support channelled through international sectors.

The headline number varies by methodology. L’Avenir reported the broader accounting puts the grand total at over 15 billion euros, while the environmental federation Canopea cites an annual figure of 13 billion euros. The differences reflect scope — direct versus total versus industry-specific — and differing reference years.

The report nonetheless notes a downward trend: subsidies were estimated at 2.4 percent of GDP in 2021, falling to 1.7 percent in 2024, a drop of 0.7 percentage points over four years.

The Reform Avenues — Led by Company Cars

The single largest identified saving concerns Belgium’s long-contested company car regime. Experts describe the favourable tax treatment of corporate vehicles as an “inefficient use of public funds” that mainly benefits middle and upper income groups, with fuel cards encouraging over-use. They recommend a gradual reform aligning the tax and social treatment of company cars with other forms of remuneration.

The estimated payoff is substantial: 2.8 billion euros by 2030, plus about 700 million euros more from targeting fuel cards. A 2025 Federal Planning Bureau study had put the annual shortfall at 3 to 5 billion euros, RTBF noted.

Other avenues include the professional diesel advantage, a partial excise refund to transporters that returned 558 million euros in 2024 and which experts suggest phasing out. Aligning the reduced excise rate on gas for energy-intensive companies with the rate applied to electricity over three to five years could yield up to 450 million euros a year. Phasing out the gasoil exemptions enjoyed by rail and inland waterway transport could bring in up to 24 million euros.

The report notes the European Commission has already flagged several of these schemes — professional diesel, company car fuel cards, the reduced excise on heating oil and the reduced VAT rate on natural gas — as having “limited economic efficiency” that does not favour climate and energy-renovation objectives.

A Catalogue, Not a Blanket Cut

The experts stress that the inventory is not a call to abolish support indiscriminately. “Given budgetary difficulties and the efforts needed to meet climate objectives, reforms of fossil fuel subsidies are desirable,” the report states. But “the objective is not to indiscriminately remove all existing support, nor to weaken exposed households or economic sectors. It is rather to distinguish what must be transformed and reformed from what must be abolished.”

The report argues that social aid should be maintained where it effectively protects vulnerable households, but should evolve toward technologically neutral forms with reassessed targeting. Economic supports, it adds, should be reserved for situations where they are “justified, proportionate, temporary and compatible with a transition trajectory,” and should be reformed so they no longer rest on fossil fuels.

Political Reality Check

The proposals face a difficult path. Scrapping the company car regime is, in the words of VRT NWS, a “balloon that never really was one” — few coalition parties regard it as politically or electorally realistic, even as it represents the largest single saving identified.

The budget debate is unfolding against a broader hunt for revenue. VRT reported the De Wever government is weighing measures including a reform of corporate tax for the non-profit sector, a possible VAT increase, savings in healthcare, and contributions from the wealthiest households — alongside the announced reduction in labour charges, which in steady state would cost more than 4 billion euros.

Civil society has seized on the fossil fuel findings. “The federal government spends 13 billion euros annually in the form of subsidies to fossil fuels,” Canopea wrote, arguing that company cars, professional diesel advantages and fuel cards “represent on their own a sum of 3 to 6 billion euros for a tax advantage that remains a social and environmental aberration.”

According to RTL Info, Greenpeace Belgium’s Elodie Belleflamme called for that money to be redirected toward investment: “Our request is very simple. It is to recover this large pool of money to reorient it toward industries, toward households, but to allow them to make investments” rather than consume fossil fuels.

SPF Finances, which manages part of the aid system, defended it on competitiveness grounds. “The high cost of energy in Europe weighs heavily on the competitiveness of our businesses,” it told RTL. “It is essential to preserve our competitiveness while pursuing the energy transition.”

What to Watch

The spending review lands as both a fiscal and a climate document. Belgium has committed, notably in the COP context, to establishing a roadmap to phase out fossil fuels, while the federal administration has estimated additional investment needs at 25 billion euros a year for the environmental transition.

The immediate test is political. With the budget conclave set to conclude by the end of September, the government must decide whether a catalogue of billions in fossil fuel support becomes a source of savings — or remains, as critics contend, a missed opportunity.