Climate deal makes halving carbon emissions feasible and affordable

By 2030, the Netherlands aims to reduce its greenhouse gas emissions by 49% compared to 1990 levels. The measures to do this are laid down in the national Climate Agreement that the Minister of Economic Affairs and Climate Policy, Eric Wiebes, sent to parliament on 28 June 2019, also on behalf of the Ministers of the Interior and Kingdom Relations, Agriculture, and Infrastructure and Water Management. The measures that were presented will enable the Netherlands to fulfil its commitments under the Paris Agreement and the National Climate Act. The government is confident that the national Climate Agreement will make the country economically stronger and more sustainable, for the benefit of all.

The agreement is based on the principle that reducing carbon emissions must be feasible and affordable for everyone. The government therefore seeks a cost-efficient transition that limits the financial impact on households as much as possible and implements measures to fairly distribute the financial burden between citizens and businesses. Another key element of the deal is that the Netherlands makes optimal use of available time until 2050: measures will be introduced step by step to ensure nothing needs to be rushed. Moreover, we will opt for the most cost-effective and future-proof approach.

Process

The government launched talks on a national Climate Agreement on 23 February 2018, by setting out the political framework with which the Climate Agreement needed to comply. Over the past year more than 100 parties have developed a package of proposals that will enable the Netherlands to nearly halve its carbon emissions by 2030. Talks were held across 5 Climate Agreement sectoral platforms: Buildings, Electricity, Industry, Mobility and Agriculture. From the very start of the talks, the government emphasised the need for cost-effectiveness. The government set a quantified emission reduction target. Two independent agencies evaluated the plan on its potential to reduce emissions and calculated expected cost to society.

Affordable, fair and feasible

The Climate Agreement succeeds in achieving this reduction target in the most cost-efficient way possible to ensure the transition remains affordable. The annual additional costs for the Netherlands associated with the Climate Agreement are less than 0.5% of GDP in 2030. As a society, we should therefore be able to afford this transition.

The government will take measures to shift the financial burden from households to businesses. It will reduce the total tax payable on domestic energy use, so that households with an average energy consumption will see their annual energy bill fall significantly in 2020. The government will also introduce measures, such as a targeted carbon levy, to make industry cleaner with a minimal risk of job losses in the country. This will help businesses become more sustainable while strengthening the Netherlands’ competitive position.

Measures by sector

Buildings

  • Enhancing the energy efficiency of 1,5 million homes and 1 million utility buildings.
  • New buildings will no longer be heated with natural gas; existing buildings need to be improved to enable fossil-free heating as well.
  • Municipalities take the lead in a local, participative approach, to make housing emission free, neighborhood by neighborhood.
  • Energy tax system improved with stronger incentives for energy efficiency and CO2-reduction.

Mobility

  • All new passenger cars to be emission-free by 2030
  • Incentives for electric vehicles through several taxation measures, including in support of the used car market; 1.8 million charging points by 2030
  • Modal shift from car to bicycle / public transport
  • Smart solutions will enable logistics to organise more efficient and sustainable transport

Industry

  • Introduction of a targeted carbon levy, starting at €30 per ton in 2021 and rises to €125-150 per ton in 2030, including the ETS price, on every ton emitted exceeding a fixed reduction path
  • Subsidy scheme for renewable energy (SDE) and CO2-reducing options in industry, such as CC(U)S
  • Funding for innovation aimed at hydrogen and other sustainable fuels

Electricity

  • Phasing out coal-fired electricity generation by 2025/2030, first plant to be closed by 2020
  • Accelerating offshore wind power, also growth of onshore wind and solar energy;
  • Subsidies for additional renewable energy capacity (wind and solar) until 2025; estimated 70% renewable share in electricity production by 2030
  • Introduction of a minimum CO2 price for electricity production

Agriculture & land use

  • Sustainable heating in greenhouse horticulture
  • Reducing methane emissions from livestock through improved processing of manure
  • Carbon storage in soil and vegetation through pilot programmes for climate-friendly land use
  • Incentives for climate-friendly food consumption and reducing food waste

Implementation, monitoring and reporting

The further details and implementation of the agreement will be entrusted to the participating parties, including central government, as much as possible. In this way, the parties themselves will bear primary responsibility for the effective implementation of the Climate Agreement. Sector-specific implementing committees will be set up under the supervision of the relevant ministers. The Minister of Economic Affairs and Climate Policy will set up an overarching progress committee.

Under the newly adopted Climate Act, the government is required to draw up a Climate Plan setting out measures to ensure that the targets stipulated in the act are achieved. The Climate Agreement will be an essential part of the Climate Plan and the Integrated National Energy and Climate Plan (NECP) that Member States of the EU are required to submit to the European Commission. The government aims to submit the Climate Plan and the NECP to the House by the end of this year so that they can be adopted before the year comes to a close. In the Climate and Energy Report (KEV), the PBL will provide its annual forecast in of carbon emissions for the year 2030.