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Domestic market overview

Production

What is the extent of oil and gas production in your jurisdiction?

In 2014 total primary energy production in Belgium – consisting almost exclusively of nuclear energy and renewables – accounted for 12.5 million tonnes of oil equivalent, which corresponds to approximately 24% of total primary energy consumption. With no indigenous oil or gas production, Belgium relies heavily on imports for its energy consumption. Natural gas is imported primarily from the Netherlands (44.9%), Norway (34.5%), the United Kingdom (10.3%) and Qatar (8.2%). Crude oil imports mainly come from OPEC members (44.2%), Russia (36.2%), Norway (8.5%) and the United Kingdom (5.5%).

While Belgium has no domestic oil production, it has a significant oil refinery sector. In 2015 the sector had a distillation capacity of approximately 40 million tonnes, of which 79.8% was used.

Due to its geographic location, Belgium is an important hub for gas flows in Northwest Europe and has one of the best interconnected systems in the region, in terms of both upstream and downstream gas flows. Approximately 80 billion cubic metres (bcm) transit the country annually, with domestic consumption reaching approximately 17 bcm per year.

Consumption

How does domestic energy consumption break down with respect to oil and gas, as well as imports and exports?

In 2014 20.7 million tonnes of oil equivalent oil products were consumed, compared to 9 million tonnes of oil equivalent natural gas products. This amounts to approximately 50% and 25%, respectively, of national energy consumption for that year. In 2015 the demand for natural gas increased by 9.6% compared with 2014. Combined net imports of crude oil and oil products totalled 29.37 million tonnes of oil equivalent in 2014 versus a total net import of 12.74 million tonnes of oil equivalent for natural gas.

Trends

What are the current trends and future prospects for oil and gas supply and demand in your jurisdiction, and what policies has the government adopted to address these?

Historically, demand for natural gas in Belgium has been stable. The demand for oil products in Belgium is high and has remained fairly constant in recent years. With regard to oil demand, no significant changes are expected in the near future, as the domestic petrochemical industry and transport and logistics sectors ensure demand security. Two noteworthy trends are:

  • the increasing investment in renewable energy capacity; and
  • the proposal for a nuclear phase-out, which could potentially lead to natural gas being used as a transitional resource.

Belgium’s geographical location makes it a prominent trading centre for oil and natural gas. The Zeebrugge port area is an important trading hub for liquefied natural gas (LNG) and natural gas, while Antwerp has strong petrochemical and refineries industries.

Another ongoing trend is the diversification of oil and gas supply. While electricity supply security has been a cause for concern, Belgium performs well in securing oil and gas supplies. For gas, this is due to a high degree of pipe-to-pipe integration with neighbouring countries combined with an ongoing policy of gas supply diversification. Examples include the capacity expansion of the Zeebrugge LNG liquefied natural gas terminal and a new interconnection between the Dunkirk LNG terminal in France and the Belgian transmission grid. 

Regulatory overview

Regulation

What are the primary laws and regulations governing the oil and gas industry in your jurisdiction?

Belgium is a federal state. Energy competences are divided between the Flemish, Walloon and Brussels-Capital regions and the federal state.

With regard to the exploration and exploitation of oil and gas, the primary laws are the Flemish Regional Act of May 8 2009 on deep subsoil and the Walloon Regional Act of July 4 2002 on quarries. However, the scope of these regional acts is not limited to oil and gas, and the lack of indigenous oil or gas production means that their application in that regard remains limited.

The (Federal) Gas Act of April 12 1965 is the primary legislation for all activities relating to the transportation of gaseous products through pipelines. The following laws are also relevant:

  • the Royal Decree of April 3 2003 on invoicing electricity and gas;
  • the Royal Decree of May 14 2002 on transportation licences for gaseous and other products by way of pipelines; and
  • the Royal Decree of December 23 2010 on the code of conduct concerning access to the natural gas transportation network, storage capacity for natural gas and liquefied natural gas installations.

Several EU instruments concern the gas industry, such as:

  • the EU Gas Directive (2009/73/EC) on the common rules for the internal market in natural gas;
  • EU Regulation 715/2009 on conditions for access to the natural gas transmission networks;
  • EU Regulation 994/2010 on measures to safeguard the security of gas supply; and
  • the EU Regulation on Energy Market Integrity and Transparency (1227/2011) on wholesale energy market integrity and transparency.

The Programme Contract of October 1 2006 on the maximum sales price scheme for oil products is the most important legal instrument for the oil industry. Further, EU Directive 2009/119/EC obliging EU member states to maintain minimum stocks of crude oil and petroleum products was implemented in the Act of January 26 2006 on the storage of strategic oil reserves.

Offshore oil and gas exploration and exploitation are subject to the Act of June 13 1969 on the exploration and exploitation of non-living resources in territorial waters and on the continental shelf.

What government bodies are charged with regulating the oil and gas industry and what are the extent of their powers?

Belgium has four energy regulators: one at federal level and three at regional level. The federal regulator, the Commission for Electricity and Gas Regulation (CREG), has a general advisory role as regards the organisation and operation of the gas market and a supervisory role regarding the application of relevant laws and regulations. CREG’s powers include:

  • the permanent monitoring of the gas market, in terms of both market functioning and prices; and
  • ensuring the transmission system operator’s compliance with the relevant laws and regulations.

Regional regulators (the Flemish Regulator for the Electricity and Gas Market (VREG), the Walloon Commission for Energy (CWaPE) and Brussels Gas Electricity (BRUGEL)) have powers to regulate and supervise the gas market in their respective regions, which includes the power to ensure compliance with technical regulations and approve the tariff proposals of gas distribution system operators.

As an EU and an International Energy Agency member state, Belgium has a duty under the Agreement on an International Energy Programme of November 18 1974 to hold one-quarter of its annual net imports of oil products as strategic stocks. Belgium’s strategic reserves are held by the public law company APETRA, which is fully owned by the federal state.

Exploration and production

Rights

Who holds the rights to oil and gas reserves in your jurisdiction?

Minerals in Belgian subsoil are generally owned by the landowner of the surface area above – except in specific cases concerning hydrocarbons and mining activities. Exploration for and the exploitation of oil and gas are conducted on the basis of a licence or concession. The applicable regime depends on the area concerned, as the regions and federal state have their own legislation.

The Flemish Regional Act of May 8 2009 on deep subsoil states that all hydrocarbons – including oil and natural gas – which are naturally present in deep subsoil (ie, at least 100 metres deep) are the property of the Flemish region. When hydrocarbons are extracted under an extraction licence, ownership is transferred to the licence holder subject to a payment to the Flemish region. Landowners are required by law to allow licence holders to conduct exploration and exploitation activities on their land. However, they are entitled to compensation for any damages that they may suffer and for the loss of enjoyment of their rights.

The Walloon Regional Act of July 4 2002 on quarries stipulates that quarries can be exploited only by holders of an environmental permit. In the absence of an agreement with the landowner regarding the exploitation of the area in question, the Walloon government may, in certain cases, grant to any company which so requests the necessary exploitation rights, regardless of whether the landowner agrees. The Walloon government, the provinces, the municipalities and public bodies can, in some cases, also expropriate and acquire land in the public interest where it is necessary for the purpose of quarry exploitation.

The Brussels-Capital region has no specific legislation regarding oil and gas exploration and extraction. Therefore, the Royal Decree of April 7 1953 on the regulation form and manner of investigations of applications for obtaining an exclusive licence to explore or extract petroleum and flammable gasses – which was repealed for the Flemish and Walloon regions – still applies. All licence applications must be directed to the competent minister for the mining industry.

Under the Act of June 13 1969 on the exploration and exploitation of non-living resources located in territorial waters and on the continental shelf, a concession must be obtained before offshore exploration and exploitation activities can be undertaken. The relevant procedure is set out in the Royal Decree of September 1 2004 on this matter. Further, a specific licence is required for the offshore exploration and exploitation of hydrocarbons on the basis of the Royal Decree of October 30 1997 on the granting of exclusive licenses for the exploration and exploitation of hydrocarbons on the continental shelf and in territorial waters.

Is there a distinction between surface and subsurface rights?

As a general rule, land ownership in Belgium encompasses both surface and sub-surface rights. However, it is possible to achieve horizontal ownership unbundling both above and under the ground, through building rights for a maximum of 50 years.

What rules and procedures govern the grant of rights for exploration and production purposes (eg, through licences, leases, concessions, service contracts, production sharing agreements)?

The federal state and the regions have their own specific legal regime in place for granting exploration and exploitation licences.

In the Flemish region, a separate licence from the government is required for the exploration and exploitation of oil and gas. An exploitation licence can be obtained only on the basis of the results achieved under an exploration licence.

The relevant procedures are set out in the Decision of the Flemish Government of July 15 2011 on the implementation of the Flemish Regional Act of May 8 2009 concerning deep subsoil, which reviews the formalities that should be fulfilled and the information and documents to be provided. The extraction of hydrocarbons is based on an extraction plan which also requires approval from the Flemish government.

In the Walloon region, the applicable rules and procedures can be found in the Walloon Regional Act of July 4 2002 on quarries and the Walloon Regional Act of March 11 1999 on environmental permits, which cover the relationship with landowners and the required environmental permit, respectively.

In the Brussels-Capital region, the Brussels-Capital Regional Act of June 5 1997 concerning environmental permits designates installations for the extraction of oil or natural gas, oil and gas storage facilities and crude oil refineries as Class IA establishments, which require a preliminary environmental impact assessment.

What criteria are considered in awarding exploration and production rights (eg, are there any restrictions on the participation of foreign investors/companies)?

In the Flemish region, such criteria are listed in the Flemish Regional Act of May 8 2009 concerning deep subsoil and include:

  •  the applicant’s technical and financial capabilities;
  • the environmental impact of the envisaged activities;
  • the potential lack of efficiency and sense of responsibility shown by the applicant in the context of a previous licence; and
  • the possible interference with other licensed subsoil activities, where appropriate.

Licences must or can be refused for a number of reasons. For example, a licence must be refused when a similar licence has already been granted for the area to which the licence application applies. A licence can also be refused if the Flemish government deems it necessary for national security reasons – for example, when:

  • a state from outside the European Economic Area or one of its citizens has de facto control of the applicant; or
  • it is unlikely that the exploration or exploitation of hydrocarbons in the area in question is economically or technically feasible.

The Walloon Regional Act of July 4 2002 on quarries and the Royal Decree of April 7 1953 stipulate no specific criteria for awarding exploration and production rights for the Walloon or Brussels-Capital regions.

The Royal Decree of September 1 2004 sets out the procedure for awarding offshore exploration and production rights. However, it contains no substantive criteria for assessing applications.

Joint ventures

Are there any special legal provisions applicable to joint ventures?

No specific legal provisions apply to joint ventures regarding oil and gas exploration and production. 

Third parties

Can exploration and production rights be transferred to third parties?

Licences granted on the basis of the Flemish Regional Act of May 8 2009 concerning deep subsoil can be transferred to third parties subject to prior written approval from the Flemish government. 

For licences granted on the basis of the Walloon Regional Act of March 11 1999 on environmental permits, when an installation is (partially) operated by a party other than the environmental permit holder, that party must make a joint notification to the competent authority together with the original environmental permit holder. The transferee must confirm in writing that it will: 

  • comply with the existing permit’s conditions; and
  • accept any additional conditions. 

As regards the Brussels-Capital region, the Royal Decree of April 7 1953 states that the (partial) transfer of a licence is subject to the same procedure and requirements as the original licence application

Fracking

Is hydraulic fracturing (‘fracking’) permitted in your jurisdiction?

No specific legislation has been adopted regarding hydraulic fracturing in Belgium. However, in 2014 the Flemish government adopted a moratorium on the exploration and production of hydrocarbons (eg, shale gas) using hydro-fracturing, as it considered that it did not have enough technical and scientific expertise on the subject. Regulation is expected in the future.

Transport and storage

Legal framework

What is the general legal framework governing the transportation and storage of oil and gas resources in your jurisdiction?

The transmission of gas is a federal competence. This includes the transmission of natural gas from production installations and neighbouring countries to distribution system operators and major industrial end users. The primary legislation regarding gas transmission is the Gas Act of April 12 1965. Several royal decrees have been adopted to implement the Gas Act, most notably the Royal Decree of May 14 2002 on transportation licences for gaseous products by way of pipelines and the Royal Decree of December 23 2010. Transmission tariffs are regulated and approved by the federal energy regulator, the Commission for Electricity and Gas Regulation (CREG).

Gas distribution is a regional competence and covers the transportation of gas to most end users.

In the Flemish region, the relevant legal instruments are:

  • the Flemish Regional Act of May 8 2009 on general energy policy provisions; and
  • the Flemish government decision of November 19 2010 on general energy policy provisions.

Distribution tariffs must be approved by the Flemish energy regulator VREG.

Gas distribution in the Walloon region is primarily governed by the Walloon Regional Act of December 19 2002 on the organisation of the regional gas market, supplemented with several implementing decisions. Distribution tariffs in the Walloon region must be approved by the Walloon Commission for Energy.

Finally, in the Brussels-Capital region the Ordinance of the Brussels-Capital region of April 1 2004 on the organisation of the gas market in the region is the main legal instrument for gas distribution. The distribution tariffs must be approved by the Brussels energy regulator BRUGEL.

Belgium has no specific rules and procedures on oil transport. Oil is mainly transported through inland waterways, to which general shipping legislation applies.

As regards oil storage, the Strategic Oil Reserves Act contains certain obligations concerning the storage of strategic oil reserves managed by the publicly owned company APETRA.

Transportation

How is cross-border transportation of oil and gas resources regulated?

The gas transmission system operator, Fluxys Belgium NV, has a statutory duty to provide sufficient cross-border capacity to integrate European infrastructure and meet economically reasonable and technically feasible requests, considering security of supply concerns.

Belgium has 18 cross-border gas interconnection points that connect the national gas transport network with neighbouring countries. It is also connected with the United Kingdom through a bi-directional interconnector pipeline, operated by Interconnector (UK) Ltd.

The Port of Antwerp is Belgium’s main oil trading sea port. Crude oil is also supplied to Antwerp through the Rotterdam-Antwerp Pipeline, which transports approximately 30 million tonnes annually. Belgium is also connected with other western European countries through the North Atlantic Treaty Organisation’s Central European Pipeline System (CEPS) network. Cross-border petroleum transport through the CEPS is regulated through international agreements.

Are there specific provisions governing marine and ground transportation of oil and gas resources?

Natural gas is imported through offshore and onshore pipelines. Offshore pipelines include one which imports gas from Norway through the Zeepipe terminal and another which imports gas from the United Kingdom through the Interconnector terminal. Both pipelines are the subject of international agreements between the governments of the respective countries.

Offshore pipelines are, as a rule, subject to:

  • the Act of January 20 1999 on the protection of the marine environment and the organisation of marine spatial planning in sea areas under Belgian jurisdiction;
  • the Act of June 13 1969 on the exploration and exploitation of non-living resources in territorial waters and on the continental shelf; and
  • the Royal Decree of September 7 2003 establishing the procedure for licensing and authorisation of certain activities in sea areas under Belgian jurisdiction.

Onshore transportation of oil and gas is subject to:

  • the Gas Act of April 12 1965;
  • the Royal Decree of May 14 2002 on transportation licences for gaseous and other products by way of pipelines;
  • the Royal Decree of December 23 2010 on the code of conduct concerning access to the natural gas transportation network, storage capacity for natural gas and liquefied natural gas installations;
  • the Flemish Regional Act of May 8 2009 on general energy policy provisions;
  • the Flemish government decision of November 19 2010 on general energy policy provisions;
  • the Walloon Regional Act of December 19 2002 on the organisation of the regional gas market; and
  • the Ordinance of the Brussels-Capital region of April 1 2004 on the organisation of the gas market.

Liquefied natural gas (LNG) is transported by LNG vessels to the LNG terminal and regasification facility in the Port of Zeebrugge, which serves as the gateway for LNG supply in Northwest Europe. Operation of the terminal is governed mainly by Chapter 6 of the Royal Decree of December 23 2010.

The transport of LNG and oil by vessels and tankers is subject to treaties including the International Convention for the Prevention of Pollution from Ships (MARPOL Convention), which requires oil tankers to have double hulls. Compliance is monitored by the Federal Agency for Mobility and Transport’s ‘corporate flag state governance II programme’.

Construction and infrastructure

How are the construction and operation of pipelines, storage facilities and related infrastructure regulated?

In general, the construction and operation of pipelines, storage facilities and related infrastructure require an urban planning and environmental permit, in line with regional requirements.

Further, the construction and operation of underground pipelines for the transport of natural gas requires a transport licence from the federal energy minister, in line with the procedure foreseen in the Gas Act and the Royal Decree of May 14 2002. The licence encompasses the right to construct and operate transport installations and related infrastructure. If construction affects private properties, a declaration of common use can be granted by royal decree.

With regard to the construction and operation of offshore pipelines, the Act of June 13 1969 on the exploration and exploitation of non-living resources in territorial waters and on the continental shelf provides that for the construction of certain pipelines a licence must be obtained before construction and the pipeline’s route must be approved by royal decree. Further, a licence may be required under:

  • Article 25 of the Act of January 20 1999 on the protection of the marine environment and the organisation of marine spatial planning in sea areas under Belgian jurisdiction; and
  • the Royal Decree of September 7 2003 establishing the procedure for licensing and authorisation of certain activities in sea areas under Belgian jurisdiction.

What rules govern third-party access to pipelines and related infrastructure?

Third-party access to the natural gas transmission network is subject to the provisions of the Gas Act and the Gas Transmission Network Access Regulation. Under the Gas Act, customers and holders of supply licences have access to transmission networks, storage facilities and liquefied natural gas facilities at the tariffs approved by CREG. The Gas Transmission Network Access Regulation introduces a range of criteria for providing access and pricing thereof. The Royal Decree of May 14 2002 also contains obligations for transmission network operators with regard to third-party access.

Access to distribution networks is subject to payment of regulated tariffs, which are approved by the regional regulators.

There is no regulated third-party access regime applicable to oil other than general competition law. Abuse of dominant position is prohibited by Article 102 of the Treaty on the Functioning of the European Union and its Belgian counterpart, Article IV.2 of the Code on Economic Law.

Trading and distribution

Regulation

How are oil and gas resources traded in your jurisdiction and what (if any) regulations and procedures apply to oil and gas sales, distribution and marketing activities, both nationally and internationally?

Gas and oil trading is fully liberalised, with the exception of pricing.

Natural gas volumes are traded at two natural gas hubs: Zeebrugge Beach and Zeebrugge Trading Point (ZTP). The following products are traded via the ICE Endex Exchange:

  • Belgian ZTP gas daily futures;
  • Belgian ZTP gas futures;
  • Belgian ZTP gas spot; and
  • Belgian ZTPL gas spot.

Is oil and gas pricing regulated in your jurisdiction?

The end-user price of natural gas consists of regulated and non-regulated components. The tariffs charged by the transmission and distribution system operators for access to and the use of their systems are determined by the relevant regulator. The commodity component of the gas price is not regulated. 

For most petroleum products, prices are fully regulated. The Programme Contract of October 1 2006 between the federal state and the Belgian Petroleum Federation introduces maximum price calculation methods for various oil products. Prices are monitored and calculated by the federal government on a daily basis and published on its website.

Occupational health and safety and labour issues

Health and safety

What health and safety regulations and procedures apply to oil and gas operations (upstream, midstream and downstream)?

The Act of August 4 1996 regarding the welfare of employees stipulates strict provisions concerning:

  • company welfare policies;
  • the installation of organisational entities; and
  • surveillance by external services for technical surveillance in the workplace.

This act is implemented by several royal decrees, the vast majority of which are relevant to oil and gas operations. The decrees generally impose risk analysis and particular preventive measures for factors such as:

  • ventilation;
  • work in thermic or hyperbaric environments; and
  • health and safety regulation.

Lastly, the EU Seveso II Directive (96/82/EC), implemented by the cooperation agreement of February 16 2016, imposes safety and prevention measures and inspection programmes. Inspections are partially executed by the Inspectorate for Welfare at Work and, more specifically, the Division for the Supervision of Chemical Risks.

Labour law

Are there any labour law provisions with specific relevance to the oil and gas industry (eg, with regard to use of native and foreign personnel)?

Like any other industry, the oil and gas sector must comply with Belgian labour law, in particular, the Labour Act of March 16 1971 and the Act on Workers Agreements of July 3 1978. Sectorial rules, set out in binding collective bargaining agreements, are also increasingly important for the oil and gas industry. 

What is the state of collective bargaining/organised labour in your jurisdiction’s oil and gas industry?

The oil and gas sector has a significant number of collective bargaining agreements on a variety of topics. The collective bargaining agreement of October 15 2016 concerning employees in the petroleum industry and trade is particularly relevant. It stipulates a maximum average working week of 38 hours with 12 days’ compensation for overtime. Further, minimum hourly wages and specific premiums are established for several functions, in addition to general premiums, such as:

  • the end of year premium;
  • the fidelity premium;
  • the polluting activity premium; and
  • the shift work premium.

Environmental protection

Authorisation

What preliminary environmental authorisations are required before commencing oil and gas-related activities?

The main authorisation required is an environmental permit. In the Flemish region, the rules and procedures for obtaining an environmental permit are set out in the Flemish Regional Act of June 28 1985 on environmental permits. From February 2017, the urban planning and environmental permit will be combined into a single environmental permit under the Flemish Regional Act of April 25 2014.

The Walloon Regional Act of March 11 1999 on environmental permits is the relevant legislation in the region. For certain projects that require environmental and urban planning permits, a single permit can be obtained.

The Brussels-Capital Regional Act of June 5 1997 on environmental permits is in force in that region. The environmental and urban planning permits are not integrated, but applications can be simultaneously examined for certain mixed projects.

Environmental protection rules regarding offshore oil and gas exploration and exploitation activities are set out in Article 25 of the Act of January 20 1999 on the protection of the marine environment and the organisation of marine spatial planning in sea areas under Belgian jurisdiction (the Marine Protection Act). Article 25 of the act requires authorisation and a licence for industrial oil and gas activities. The required authorisation and licence is granted on the basis of Royal Decree of September 7 2003 establishing the procedure for licensing and the authorisation of certain activities in sea areas under Belgian jurisdiction.

Requirements

What environmental protection requirements apply to the operation of oil and gas facilities?

The most significant environmental protection requirements are the general, sectorial and project-specific environmental conditions contained in an environmental permit.

Generally applicable rules concern:

  • the prevention of soil and water contamination;
  • the prevention of air, noise and light pollution; and
  • the disposal and removal of chemicals, energy use and the emission of greenhouse gasses.

Activities in the oil and gas sector can also be subject to additional sector-specific environmental requirements, such as specific water and atmospheric emission limits for refineries.

Offshore oil and gas activities are also subject to specific conditions of the Act of June 13 1969 on the exploration and exploitation of non-living resources in territorial waters and on the continental shelf and the Marine Protection Act.

Consequences

What are the consequences of failure to adhere to the relevant environmental regulations and to what extent can operators be held liable for environmental damage?

Non-compliance with the relevant environmental provisions can lead to:

  • suspension or withdrawal of the environmental permit in question;
  • closure of the installation; or
  • administrative penalties.

Non-compliance with environmental regulations may also be an environmental offence, subject to criminal penalties, including imprisonment and fines.

In principle, the operator is liable for the costs associated with the prevention and remediation of environmental damage. However, an operator is not generally required to bear the costs where it can prove that environmental damage or imminent threat of such damage is due to:

  • an act of a third party, despite appropriate security measures being taken; or
  • the result of compliance with an order or instruction of a public authority.

Taxes and royalties

Taxes

What taxes (direct and indirect) and/or royalties apply to oil and gas activities in your jurisdiction (including upstream, midstream and downstream activities)?

Companies active in the oil and gas sector are subject to direct and indirect taxes, the most important of which is corporate income tax (set at a maximum rate of 33.99%). The supply of oil and natural gas is also subject to 21% value added tax (VAT) if the place of supply is located in Belgium. Article 14bis of the VAT Code sets a specific rule to determine the place of supply of natural gas supplied by a distribution system. This varies according to whether the gas is supplied to a taxable dealer or the final customer that effectively consumes the goods.

As upstream oil and gas activities are non-existent in Belgium, there are no specific taxes in this respect. However, Belgian law provides royalty compensation for certain oil and gas exploration activities. For instance, compensation for the federal state is provided for in the concession granted to offshore exploration activities.

Since January 1 2016, common excise duties in the gas sector have been set at zero. However, in principle, natural gas purchased for personal use is subject to a federal energy contribution.

Crude oil that is not used for heating or as motor fuel is not subject to excise duties. Oil used as fuel and the most common fuel-oil derivatives are subject to a rate of excise duties, which depend on their classification. Further, the costs of strategic oil reserves held by APETRA (a public limited company that manages Belgium’s strategic oil stocks) are compensated with a duty as described in the Act of January 26 2006 on the storage of strategic oil reserves. The state levies a soil sanitation charge (the BOFAS tax) and a duty for the quality control of mineral oil products (the FAPETRO tax).

Some oil and gas installations may be required to pay additional environmental taxes, such as the regional wastewater disposal tax. 

Imports and exports

What taxes and duties apply to oil and gas imports and exports?

In addition to the indirect taxes mentioned above, oil and gas imports from outside the European Union are subject to customs duties. These tax rates depend on the type of product and are defined in the Integrated Tariff of the European Community (TARIC) database. Certain oil and gas products fall within the scope of Section V (mineral products) Chapter 27 of the EU Combined Nomenclature.

Decommissioning

Regulation

How is the decommissioning of oil and gas facilities regulated?

Oil and gas refineries must be decommissioned in line with the Best Available Techniques Reference Document for the Refining of Mineral Oil and Gas.

As regards the decommissioning of offshore installations, Belgian law provides for a general prohibition on dumping in Belgian sea areas, which is subject to a few exceptions. The dumping prohibition is set out in Article 16 of the Act of January 20 1999 on the protection of the marine environment and the organisation of marine spatial planning in sea areas under Belgian jurisdiction. In addition to the prohibition on dumping, Belgian law also provides for a general obligation to remove disused installations and structures in Belgium’s exclusive economic zone and territorial waters. The removal obligation is set out in Article 39 of the Act of April 22 1999 on Belgium’s exclusive economic zone in the North Sea.

Dispute resolution

Disputes

How are oil and gas disputes typically resolved in your jurisdiction?

Commercial disputes between market players in the oil and gas industry fall under the competence of the relevant local commercial court. Appeals against decisions of the different energy regulators are brought before the Brussels Court of Appeals. If no other court is competent, the Council of State, Belgium’s supreme administrative court, decides on applications for the annulment of an administrative body decision.

Mediation and arbitration are not uncommon and can be contract-based or imposed by law. Pursuant to the Gas Act of April 12 1965, the federal Ombudsman’s Service for Energy is responsible for mediation between end users and natural gas providers. Energy regulators also have mediation and dispute resolution competences. The federal regulator, the Commission for Electricity and Gas Regulation, is responsible for disputes involving the gas transmission system operator, and regional energy regulators are responsible for disputes involving gas distribution system operators.

Belgium is also party to several international agreements in the oil and natural gas sector, such as the Energy Charter Treaty, which often include alternative dispute resolution mechanisms.

Anti-corruption measures

Dishonest practices

What regulations and procedures are in place to combat bribery, fraud, collusion and other dishonest practices in the oil and gas sector in your jurisdiction?

Fraud in the oil and gas sector can take the form of household fuel being sold as diesel or fuel mixing or it can relate to excise duties and value-added tax (VAT).

To tackle this fraud, some sector-specific procedures apply. To guarantee that petroleum products comply with product standards, the Fund for Petroleum Products Analysis controls samples on their composition. Non-conformity is communicated to the Directorate General Economic Inspectorate of the Federal Public Service Economy, which can address suspected fraud, including closure of the fraudulent sales point. VAT fuel carrousels are increasingly being tackled via the parallel warning system, whereby information is exchanged between Belgium and the Netherlands.

Anti-money laundering provisions can be found in the Criminal Code of June 8 1867 and the Act of January 11 1993 on preventing use of the financial system for money laundering and financing terrorism.

Further, the Criminal Code stipulates criminal penalties for bribing Belgian or foreign officials and criminalises private corruption, such as offering advantages to a company director.

Anti-competitive collusion between competitors can be penalised by the Belgian Competition Authority on the basis of Article IV.70 of the Code of Economic Law or Article 23 of EU Regulation 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty on the Functioning of the European Union.

Law stated date

Correct as of

Please state the date of which the law stated here is accurate.

November 25 2016.