Subsidy SME entrepreneurs rising energy costs

It is the topic of almost every day, rising energy costs are keeping minds busy.

In October, the government announced a scheme to assist SME entrepreneurs with rising energy costs. The scheme which goes named under the name TEK (gemoetkoming Energiekosten) is expected to be opened in the 2nd quarter of 2023 and will apply retroactively from November 2022.

The TEK allowance is a temporary scheme for companies with relatively high energy costs. In short, the scheme means that an entrepreneur can receive an allowance of 50% of the increased energy costs, with a maximum allowance of €160,000.

Conditions TEK:
To qualify for the allowance, the following conditions must be met:

• The company is registered with the Chamber of Commerce;
• Annual energy consumption is > 5,000 m3 of gas or > 50,000 kWh of electricity;
• At least 7% of turnover consists of energy costs;
• The company qualifies as an SME.
  o The annual turnover does not exceed € 50 million;
  o A maximum of 250 employees are employed;
  o Balance sheet total maximum of € 43 million.

If the above conditions are met, the company receives the label energy-intensive SME.

Based on this label, it is therefore possible to receive an allowance of up to 50% of the energy cost increase. To calculate the cost increase, threshold prices are taken into account. The threshold price for gas is now €1.19 m3 and for electricity €0.35 per kWh. The total maximum allowance is €160,000.

A small account example:
A baker has a gas consumption of 15,000 m3 and an electricity consumption of 30,000 kWh. Current energy prices are:

• € 2.52 per m3 of gas
• € 0.67 per kWh electricity

The allowance is calculated taking the threshold prices into account as follows: 15,000 m3 x (€2.52 -/- €1.19) + 30,000 kWh x (€0.67 - €0.35) = €29,950 The allowance herein is therefore 50% and amounts to €14,775.

Bridging measures
Given that the scheme is not expected to open until the 2nd quarter of 2023, there have been calls from various industry associations to start paying advances already as entrepreneurs are already struggling with their high energy bills. However, our economic affairs minister announced last week that there is no money for advance payments. Instead, our minister referred to a number of bridging measures.

• Tax deferral If the company has liquidity problems due to rising energy costs, tax deferrals can be applied for. As of 1 October, the Tax Administration's tax deferral policy has been relaxed to support energy-intensive SMEs. The way to get tax deferral will be assessed on a case-by-case basis.

• Financial sector assistance The government is in discussions with banks and other financiers about supporting energy-intensive SMEs. For instance, companies that are fundamentally sound can get help through extra liquidity (bridging finance). There will also be more focus on financing for sustainability.

Whether the above measures can still contribute in time to entrepreneurs already struggling with their energy bills will have to be seen. With the upcoming Christmas spirit, let's hope we have enough bread to share together.