Government of Spain cuts VAT on gas from 21% to 5% from October

Moncloa Palace, Madrid

The Council of Ministers has approved additional energy measures to enable domestic consumers and industry to cope with the consequences of the reduction of natural gas from Russia to the European Union. These initiatives are in addition to those already taken to reduce excess profits of energy companies to support industry, to provide relief to vulnerable consumers and to the so-called Iberian Mechanism.

5% VAT reduction and other measures

The Third Vice-President of the Government of Spain and Minister for Ecological Transition and Demographic Challenge, Teresa Ribera, has highlighted that the VAT charged on natural gas bills will be temporarily reduced from 21% to 5%, which is the minimum authorised by EU legislation. This tax measure will run until 31 December and will also apply to the purchase of pellets, briquettes and firewood.

The initiative comes on top of the progressively approved tax cut on electricity, which has also left VAT at 5%, set the electricity tax rate at 0.5% and suspended the 7% tax on generation, a measure that has brought savings of more than 10 billion euros to consumers.

Teresa Ribera has stated that depending on how events evolve, the tax reductions could be extended into next year.

Reactivation of cogeneration

Industrial cogeneration plants may temporarily waive their regulated remuneration to enter the scope of application of the Iberian Mechanism.

The third vice-president explained that these plants are present in sectors such as pulp and paper, ceramics and agro-industry and account for 20% of the country's gas consumption and 20% of the industrial Gross Domestic Product. In her opinion, adopting this measure will mean that half of the cogeneration, which stopped its activity due to the rise in prices on the energy markets, will be operational again, and will not only stop demanding electricity from the system, but will also be able to supply it.

Ribera said that the measure will save gas because a cogeneration plant produces heat and electricity more efficiently than a combined cycle plant, which will result in energy savings of up to 10%. In addition, the closed cogeneration plants returning to activity will bring savings of up to 1.2% of the daily demand for natural gas.

Active demand response

The Executive has agreed to the creation of a new rapid demand response mechanism that will increase the flexibility and security of the electricity system. This service is similar to the so-called interruptibility mechanism, i.e. the availability of industrial plants to stop at specific times and be paid for doing so, as explained by Ribera.

The measure will make it possible to resolve significant differences between generation and consumption that arise in the hourly period immediately prior to supply or at the time of the supply itself. The third vice-president underlined that it will allow retailers and direct consumers to reduce their consumption in exchange for an economic benefit.

Renewable energy generation

The legislation adopted today includes other measures that will facilitate the roll out of renewable energies. In this regard, more flexible criteria are established for determining the capacity of electricity transmission networks and administrative procedures for generation projects are simplified.

Moratorium on mortgages on La Palma

Teresa Ribera has announced that citizens of La Palma affected by the eruption of the volcano will be able to request a moratorium on the payment of their mortgages if they didn't request it within the deadlines that were initially established.

Contribution of 30 million euros

The Minister for Ecological Transition also announced that the Government has approved a voluntary contribution of 30 million euros to the United Nations Adaptation Fund on Climate Change, which finances projects and programmes to help developing countries adapt to the harmful effects of climate change.

Water supply to Andalusian towns

The Executive has authorised emergency water works totalling 12.7 million euros to guarantee the supply to several Andalusian towns at risk of drought.

Ribera detailed that some are committed by the Andalusian Regional Government and declared to be of general state interest, while others are allocated for investment to guarantee supply.

New COVID vaccination campaign to start on 26 September

The Council of Ministers has received the report on the next vaccination campaign against COVID, which will begin on Monday 26 September throughout Spain.

The Minister for Health, Carolina Darias, has announced that the administration of this second booster dose will begin with those aged over 80 and those living in residential homes. This will be followed by those over 60, staff in health and social care centres and those who, for various reasons, have not been able to complete their vaccination schedule. "From then on, we will follow what the Vaccines Committee and the Public Health Commission tell us regarding those under 60", she said.

This new booster dose aims to maintain high vaccination coverage and protection against infection, severe disease, hospitalisation and death.

The new vaccines are adapted to variants and, in particular, offer protection against omicron, which is the most widely circulating strain at the moment. Already authorised by the European Medicines Agency are Pfizer and Moderna adapted to BA.1 and Pfizer adapted to BA.4 and BA.5.

This September, 16 million vaccine doses will be received, and 44 million by December.

Carolina Darias recalled that "vaccines save lives" and that "vaccination in our country has been and continues to be a collective success". So far 93% of the population over 12 years old has been fully vaccinated and 80% of those over 40 have had the first booster dose.

Investments in primary care

The Government has authorised the territorial distribution of 172.4 million euros to develop the Primary and Community Care Action Plan 2022-2023. These funds aim to increase the resolution capacity of Primary Care, promote quality of care and strengthen health promotion and prevention. The Plan is the main element of one of the reforms set out in the Recovery, Transformation and Resilience Plan.

The Minister for Health underlined the Government of Spain's commitment to primary care: "It is a fundamental pillar in achieving the right to health protection for the population while guaranteeing close, equitable and cohesive care throughout the territory".

Carolina Darias listed other investments that will also be directed towards primary care, such as 230 million euros to develop the Digital Health Strategy in this area and 44 million euros for oral health care.

Specific actions

With regard to the 172.4 million euros - whose distribution will be formalised tomorrow at the Interterritorial Council of the National Health System (NHS) - Darias explained that it will be allocated to specific actions, pursuant to the priorities set out in the Action Plan for Primary and Community Care 2022-2023 and defined in a comprehensive plan drawn up by each regional government.

Some examples are the acquisition of equipment to improve the diagnostic and, therefore, decision-making capacity of primary care; the optimisation of administrative processes so that they are carried out more quickly; the reinforcement of community orientation and health promotion; the approach to chronicity in polymedicated patients, and the implementation of strategies already within the NHS, such as palliative care or cancer.

Camino Plan against trafficking and sexual exploitation

The Council of Ministers has approved the Camino Plan to provide economic, employment and social alternatives for victims of trafficking, sexual exploitation and women in prostitution.

The Minister for Territorial Policy and Government Spokesperson, Isabel Rodríguez, detailed that the plan has a budget of 204 million euros, will operate until 2026 and 28 measures, including establishing a system to accredit victims without the need for a complaint or the prevention and discouragement of prosecution in the field of prostitution.

Trafficking mainly affects women and girls, as noted at an international level by the United Nations Office on Drugs and Crime and, in Spain, by the National Intelligence Centre (Centro Nacional de Inteligencia). Its latest report, with data from 2017 to 2021, indicates that 873 victims of sex trafficking and 2,227 victims of sexual exploitation had been identified, that 50% of them were women between 18 and 32, and that one in three was in an irregular administrative situation.

The Camino Plan complements the regulatory framework in this regard, which has been specified in Organic Law 10/22 of 6 September on the Comprehensive Guarantee of Sexual Freedom, in the National Strategic Anti-Trafficking Plan and in the National Plan of Response to the Economic and Social Consequences of the War in Ukraine, where special attention is paid to victims of trafficking and sexual exploitation.

Care for unaccompanied minors in the Canary Islands, Ceuta and Melilla

The Executive will allocate 15 million euros to caring for unaccompanied minors arriving in Spain. The Canary Islands will receive 6 million and the cities of Ceuta and Melilla 4.5 million each for the immediate reception and assistance and information, guidance and psychosocial support for these children.

Isabel Rodríguez acknowledged the efforts made by these territories, the most affected because they are the southern border of the European Union, and advocated that attention to the migratory phenomenon should be "a shared responsibility" nationally and in Europe.

Non official translation