27 nov 19

Next Belgian government may ban ICE company cars

Six months after the last elections in Belgium, there is still no new government in sight. A report written by the leader of the negotiations, Paul Magnette (PS), contains a proposal to ban all company cars that aren’t zero-emission starting in 2023. How realistic is this?

What’s in the proposal?

Belgium has a taxation framework that is favourable to company cars, leading to no fewer than 660.000 people driving one (on a total population of 11 million). Consequently, many Belgians prefer to drive to work rather than taking public transport or cycling to the office. In spite of the possible benefits for congestion and the environment, no politician has so far dared address this issue.

The report Mr Magnette wrote as part of his coalition negotiations with other party leaders, and which was leaked to the press on Monday, contains a chapter on sustainable development. In it, he proposes that companies shall only be able to benefit from fiscal advantages of benefit cars for zero-emission vehicles.

The report aims to transition to a fully zero-emission company car fleet by 2030 but it lacks details on how that could be achieved.

Is the proposal realistic?

In the newspaper L’Echo, Miel Horsten, CEO, ALD Belgium and president of Renta, the country’s federation of leasing and rental companies, said: “If you take into consideration fiscal regulations and energy consumption, an electric vehicle is a viable alternative for ICE vehicles.”

In the newspaper De Standaard, Ronnie Belmans, CEO of Energyville, says the electricity grid can cope with 600,000 new electric vehicles. “If 600,000 company cars drive on electricity, that represents 2.5 to a maximum of 4% of total electricity use. That’s negligible.”

In the same newspaper, Mathias Bienstman of Bond Beter Leefmilieu, a non-governmental environmental organisation, points out charging behaviour could be an issue. “If everyone starts charging their vehicle when they get home, that can lead to problems.” He posits this requires the introduction of smart meters and smart charging infrastructure.

Importantly, Mr Bienstman applauds the proposal for the environmental benefits. As company cars cover more distance than the average vehicle, electrifying all company cars could half the country’s CO2 emissions. He also mentions an important spill-over effect, as company cars become available on the private market at the end of their leases. The substantial increase in electric vehicles should also boost EV infrastructure, which benefits all EV drivers.

How likely is this proposal?

After the elections on 13 June 2010, Belgium was left in a government-less limbo for 541 days, beating a world record until then held by Cambodia. Once more, the elections held on 21 May 2019 have not yet resulted in a new government.

This gridlock can be explained by the divergence between the leading political party in the Dutch-speaking Northern half of the country (conservative regionalists) and that in the French-speaking Southern half (socialists), who have difficulty finding, or indeed agreeing to look for, common ground. Coalition talks are ongoing but appear to go nowhere and there appears to be little sense of urgency.

However, a new federal government without Mr Magnette’s socialist party is mathematically impossible, whereas one without the Dutch-speaking Flemish regionalists is an option. But will Mr Magnette and his PS be courageous enough to push through this proposal?

Photo: Paul Magnette, party leader, PS

Authored by: Benjamin Uyttebroeck