The Netherlands wants to reduce carbon dioxide emissions through agreements with major polluters, but this is not yet easy

It is one of the main ways the Netherlands reduces carbon dioxide emissions2 He wants to back off – but it’s been much slower than expected in 2022.

Minister Miki Adriansen (Economic Affairs and Climate, VVD) wanted to sign as many declarations of intent as possible with large industrial emitters about emissions reduction and potential state aid. Also in November, Adriaansens said he expected “four to five” agreements to be signed by the end of this year, in addition to an earlier agreement with steelmaker Tata Steel.

Finally, before the Christmas holidays, agreements were concluded with the plastics manufacturer Dow Chemical in Terneuzen and the Nobian salt and chlorine plant, with large plants in Delfzijl and Rotterdam. In total, the minister made three appointments in 2022.

It was one of the most striking schemes in the Rutte IV cabinet coalition agreement: the so-called “ad hoc agreements” with major emitters. The government wanted to sit around a table with twenty large industrial companies and conclude firm agreements on reducing emissions, in exchange for state support for the transition to sustainable production.

Billions have been earmarked to CO2The Netherlands’ emissions must be cut significantly: for example, Dow and Tata Steel together export about 10 percent of the Dutch total. This also includes refineries, for example, Shell, but also the Yarra fertilizer plant in Sloesskelle in Zeeland.

Foreign headquarters

After many discussions, it is now clear: it seems that making these kinds of agreements is very complicated, which means that they are being done less quickly than planned.

Worked with Dow, Tata and Nobian. For example, the ministry and Nobian agreed in mid-December that the company wants to be climate-neutral by 2030, including using electricity instead of gas to produce salt. It could make a difference of 1 percent to total Dutch gas consumption. Still no amount of government aid – these are declarations of intent that will have to be detailed further in 2023.

Even registering this kind of draft agreement with other companies turns out to be a very complicated process, Adriaansens explained in November in written answers to parliamentary questions – when she was still planning to sign several agreements this year. Many companies still have to think about their sustainability strategy, or need time to “align” things with foreign headquarters. The current “difficult market conditions” also require a lot of time and attention.

According to the minister, time is also needed to take a closer look at what exactly is being agreed upon. The agreements are not ultimately intended to cover “routine maintenance” of plants, or the implementation of “continuing policies.” The ministry also says it has not received any indications that the companies are trying to push all kinds of other cost items under the agreements.

The pace of tailor-made agreements in the House of Representatives has already been criticized. For example, the VVD believed that the plan to complete all draft agreements by the end of 2023 was wildly unambitious. The Party for the Animals (PvdD) is also unhappy with what it sees as “months of negotiations with major polluters on how to make their business operations more sustainable”, according to previous written parliamentary questions. According to PvdD, the companies had plenty of time for this.

Many parties in the House of Representatives agree in principle to support industrial companies. But there is much debate about how far this should happen, and under what circumstances. For example, GroenLinks, PvdA, and alliance partner D66 are wondering if the minister doesn’t want too much. Wouldn’t it be better to have a somewhat stricter view of what can and cannot remain in the Netherlands before companies receive the funds? According to D66, the Netherlands currently has a “disproportionately” large number of energy-intensive businesses.

There is also concern among economists that too many companies may receive the money. Sander de Bruijn of the economic research agency CE Delft pointed this out previously Norwegian Refugee Council He also suggests that a steel or fertilizer plant in northern Scandinavia may in the future be able to produce much cheaper than a plant anywhere else in Europe, given the large amounts of stable green electricity available there – essential for greener plants that need a lot more energy. from electricity.

Also read this recent report on green steel from northern Sweden: Just below the Arctic Circle, a green steel industry is spreading

Some companies may not be able to participate in the transformation, warned Dirk Loerbach, professor of social and economic transformations at Erasmus University. “For example, the Netherlands now has refineries that process oil,” he told NRC in 2021. “This is a limited business.”

Minister Adriaansens estimates that at the moment there are good prospects for a very large part of Dutch industry in a green future – in part because of the country’s favorable logistical location on the sea. In answering parliamentary questions, she referred to a report by the research agency Ecorys, which concluded that in 2050, the competitive position in energy for the Netherlands will be similar to many other countries, such as Germany, the United States and China. But she also wrote: “In the long term, much is uncertain. Energy-intensive companies will also reconsider where it is best to place the installation.”

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