Tradable green certificates in Flanders (Belgium)

The paper provides details on green certificate systems in Belgium. The Flemish region has established a system and the Walloon region is preparing a slightly different one. The lack of uniformity and consequently of transparency in one country emphasises the need for more EU leadership in the field. The main part of the article analyses the established Flemish system. Green certificates are complementary to other instruments that promote renewable electricity, e.g. direct subventions on the feed-in price of green electricity or direct subventions on capital investments. Certificates execute a forcing effect on the actual development of green power if the imposed shares of green power in total sales are significant and if the fine level is at the height to enforce the quota. If the fine is too low the incentive effect turns into a financing tax effect. When the green certificate system does the job it is designed for, i.e. operating at the edge of the RES-E development and organise the transition from a non-sustainable to a sustainable power system, certificate prices will be high and reduce end-use consumption of electricity. A segmentation of the RES-E sector along the various RES-E technologies is a necessity to keep any certificate system affordable, effective and efficient. One can segment the tradable certificate market or one can assign a different number of certificates to a different RES-E technology project. Both solutions require an intensive follow-up of cost structures and of other policy measures (subventions), but given the infant state of understanding and experience segmenting markets may be best in the nearby years.