Lower energy consumption and C02 emissions thanks to tax break

A tax credit from the Dutch government encouraged businesses to invest almost €1.5 billion in sustainable energy and energy saving measures in 2011. This is 45% more investment than in 2010, and represents a saving in energy and CO2 emission reduction equivalent to the energy use and emissions of 330,000 Dutch households.

The results were published today by the Ministry of Economic Affairs, Agriculture and Innovation (EL&I) in its annual report on Energy and Investment tax allowances (EIA), carried out by AgentschapNL.

Most applications were from businesses wishing to invest in low-energy premises, including features such as heat pumps, insulation, low-energy lighting and ventilation. Entrepreneurs invested most money in sustainable energy generation, most noticeably major investments in wind energy, bio-energy and solar energy

The tax credits for entrepreneurs in 2011 totalled €116 million, with businesses paying an average of 25% tax on profits. The EIA allows 41.5% of the cost of investment in energy-saving technology and sustainable energy to be deducted from profits. The net profit then amounts to approximately 10% of the total investment.

The government’s objective is to produce more energy from sustainable sources. Generating more energy sustainably will reduce CO2 emissions and make the Netherlands less dependent on imported energy. Without this tax credit the cost of generating sustainable energy in innovative ways would be considerably higher than the cost of traditional technologies.