Spain will gradually return to a 21% rate on value-added tax for energy bills over the next six months after lowering it to 5% last year to ease the pain of inflation, Prime Minister Pedro Sanchez said on Wednesday.

He added that energy companies would be able to deduct investments in industrial projects that contributed toward decarbonisation from a 1.2% windfall tax on their profits that was introduced last year.

(Reporting by Belén Carreño; Writing by David Latona; Editing by Charlie Devereux)