new Dutch coalition government
While the U.S. government is abandoning Obama’s Clean Power Plan and taking the U.S. back to the age of fossil fuels, the new Dutch government has presented an unexpectedly ambitious climate and energy policy. The Netherlands will adopt a Climate Law and a minimum CO2 price and it wants to persuade the EU to increase its CO2-reduction ambition from the current 40% in 2030 to 55%. It also intends to close all its coal-fired power stations by 2030 and to allow only zero-emission vehicles to be sold from 2030 on.
The new four-party government on 10 October, after almost 7 months of negotiations, presented a coalition accord which, in the Dutch tradition, includes all the measures the parties have agreed on for the coming governing period. The climate and energy paragraphs in the accord are very ambitious. Unexpectedly so: up to now, the Netherlands has been a laggard in the EU in its renewable energy efforts. Nor does the new coalition include any green parties – it is made up of two Christian-Democratic and two Liberal-Democratic parties.
To begin with, the coalition has agreed “to take measures that will prepare [the Netherlands] for a [greenhouse gas emission] reduction of 49% in 2030”.
That’s more than the 40% reduction the EU member states agreed on after the Paris Agreement. Indeed, the Dutch government promises that the Netherlands “will take the lead in the EU to get [the EU] target up to 55%”. A decision on a possibly more ambitious EU target is foreseen for 2019, but  “ff the EU as a whole turns out to be insufficiently ambitious, we will seek to work with neighbouring countries to agree on extra efforts in addition to the EU agreement”, the accord notes.
An emission reduction of 49% implies an extra reduction of 56 Mton of CO2 on top of the reductions that are currently foreseen in Dutch energy policy, notes the accord. The coalition has agreed in some detail on how it wants to achieve this goal:
As is shown in the table, the government intends to invest considerably in carbon capture and storage for the industrial sector. In total, the new government will make €4 billion available to carry out the climate and energy plans.
UK example
This by no means exhausts the new Dutch climate and energy plans. Thus, the government will be the first EU country to follow the UK example by establishing a minimum CO2 price in the electricity sector, according to the accord. It will also follow the UK example in adopting a “climate law” that is meant to provide long-term certainty for investors.
In addition, the accord says the government will close “the coal power stations” no later than in 2030, which presumably means all five Dutch coal power stations, three of which have only been built very recently. For more on this, see Gerard Wynn’s articles on Energy Post: The big Dutch coal mistake (part 1) and The Big Dutch coal mistake (part 2). What is more, the burning of biomass in the coal power stations will not be subsidized anymore after 2024.
Reaction from Gerard Wynn, energy finance consultant at IEEFA:
“The coal phaseout plan by the Netherlands today shows that no investment in coal-fired power in Europe is safe. This announcement appears to mandate the early retirement of Europe’s three newest coal plants. The lesson is clear: investors will lose money building new coal power plants in Europe, whether because of coal phaseout plans such as this, or because of the grid impacts of renewables.
Significantly, the Netherlands announcement also highlights the risks to environmental upgrades of existing coal-fired power plants, to comply with recently revised pollution standards to be implemented from 2021, called BREF. Coal phaseout will cut short the opportunity for operators to recoup their investment on such life extension upgrades. Utilities should consider carefully whether to upgrade old, polluting coal power plants, or shut these, and instead invest in more forward-looking, high-return investments in renewables especially solar and wind power.”
The coalition is also taking measures to reduce the use of natural gas, long the mainstay of Dutch energy use and production. Starting four years from now, new houses and neigbourhoods will not be connected to the gas grid anymore. The existing building stock will gradually be made “more sustainable”. For more on the Dutch get-off-the-gas program, which has been under discussion in government circles for some time, see Eline van den Ende’s recent article on Energy Post: A revolution: The Netherlands kisses gas goodbye – but will it help the climate?
Production from the huge Groningen gas field will be reduced from 21.6 bcm (billion cubic metres) in 2017 to 20 bcm in 2021, according to the accord. The area around the Groningen field has been subject to earthquakes over the last few years which have led to a great deal of unrest among the population.
The accord foresees a great many energy efficiency measures in the built environment.
Reaction from Bert Metz, fellow of the European Climate Foundation and former chief negotiator for the Netherlands and the EU to the UNFCCC:
“As one of the first EU countries, the new Dutch coalition government has acknowledged that the EU climate target for 2030 needs to be strengthened, from a 40% to a 55% emissions reduction, to be in line with the Paris Agreement. In that context, the Netherlands themselves will aim for a national 49% emission reduction target, close all coal-fired power plants by 2030 and will only allow zero emission cars by 2030. These are the kind of early actions needed to avoid the worst impacts of climate change, protect the lives of EU citizens and live up to what Europe committed to in Paris.”
Finally, in the transport sector, the accord says “the intention is that no later than in 2030 all new cars will be zero-emission”. The government will adapt its taxation system to facilitate the uptake of zero-emission cars.
It also promises to invest in charging infrastructure, and to prepare the Dutch transport infrastructure for the introduction of self-driving cars.
All in all, the plans represent quite a revolution in the Dutch approach to climate policy. One that goes in the opposite direction of where Donald Trump is taking the U.S.
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Certainly ambitious, and I am curious whence came the technical support for the very specific breakdown of contributions. The CCS contribution is very large, more than 1/3 of the total. There was a recent CCS project (in Rotterdam?), injecting CO2 into a worn-out gas reservoir, which was stopped, I think for financial reasons (?) I presume that the lessons learned there are included in the economic evaluation of the proposed CCS.
Mr. Herb, you’re right. CCS is the cornerstone of the proposed plans. CCS failed in Rotterdam because of financial reasons and a too low ETS price on CO2 (not to mention societal resistance). The yet to be confirmed administration Rutte III hasn’t learned a thing….
Not ambitious at all! The cornerstone of its plans is CCS. We all know it failed in Barendrecht and, recently, in Rotterdam.
CCS did not fail in Barendrecht but was blocked by the population, with firm support from the Greens. Recently the Greens discovered that ambiteous CO2-targets can only be reached with a firm share of CCS. It appeared that their leader didn’t read this part of his parties programm.
In 2020 it will be clear. CCS has to be accepted or the target will not be reached.
Three remarks on CCS in the Netherlands:
1. The ‘plan’ to capture and store 18 Mt per year from the industry, presented by the coalition, is just a first indication of how the industry in the Netherlands should and could reduce CO2 emissions, additionally. If the industry would come up with alternative, cheaper or more clever plan to reduce their emissions it would be no problem. Consequently it might well be that industrial CCS will be less than 18 Mt in 2030 in practice.
2. The Rotterdam Climate Initiative (RCI) published ten years ago, under the leadership of former prime-minister Ruud Lubbers, a CCS implementation plan for the Rotterdam area. In this plan the CCS would start with 1 Mt capture and storage in 2010 (by the ROAD project) and develop up to 20 Mt in 2025. Capture would involve all ‘pure’ CO2 sources from the industry and capture from power plants. This plan was developed with many parties involved
3. In 2014 the Dutch RD&D programme on CCS, called CATO, published a Road Map for CCS in the Netherlands. In this study the potential of CCS was shown. The removal and storage of CO2 would start in 2020 and reach 20 Mt in 2020, 45 Mt in 2030, 60 Mt in 2040 and 64 Mt in 2050.
Based on these studies there is no reason to assume that 20 Mt CO2 emission reduction by CCS in 2030 can’t be achieved in principle.
Sorry, within the CCS Road Map of CATO, developed in 2014, the figure of 20 Mt CO2 would be reached in 2025.
In addition it should be noted that in both plans captured CO2 would come mostly from power plants, not from industrial plants. Therefore gas fired power plants should be taken into account when implementing CCS, as well as (future) bioenergy or biofuels plants .
I agree with Wim Turkenburg: we would applaud new industry initiatives to help reduce greenhouse gas emissions faster and cheaper than expected. However, at this time we don’t see enough of those initiatives to reach our ambitious targets (-49%). CCS needs to be fully implemented and at the same time we need to continue finding better ways to reduce emissions. Sitting back arguing about it for a couple more years will not do us any good.
It would be helpfull if the Greens, in line with their election programm, would stop demonizing CCS.
It would be good also, if you can provide for the economic rationale for CCS and take the much more needed transition of the energy intensive industry into account.
On the request of four ministries of the Netherlands, in April 2017 PBL and ECN published a report to indicate ‘some measures with a large CO2 emission reduction potential in 2030’. For the industry of the Netherlands five options were indicated:
(1) biomass (em. red. 7 Mton; cost 140 €/ton);
(2) recycling (em. red. 2.2 Mton; cost -130 €/ton);
(3) process efficiency (em. red. 5-9 Mton; cost -130 up to +50 €/ton);
(4) CCS process emissions and steel production (em. red. 5-9 Mton; cost 0-50 €/ton);
(5) CCS refineries (em. red. 4-8 Mton; cost 50-90 €/ton);
From these figures one may conclude that 18 Mt CO2 emissions reduction in the industry at least partly requires CCS.
To achieve in total 20 Mt CO2 emission reduction in 2030 by CCS alone, it would be necessary a.o. to capture and store CO2 from gas fired power plants (with a potential, estimated by PBL and ECN, of 6-8 Mt CO2 in 2030, at a cost of 75 €/ton). In addition it will probably be needed to convert natural gas (methane) into H2 and CO2, to start a hydrogen economy applying CCS. In their report, however, this option was not evaluated by PBL and ECN.
The Netherlands has been long been associated with progressive environmental policy. The Coordination Center for Effects (CCE) already issued the first comprehensive report on the acidification of critical soil loads throughout Europe in 1991.
RWE once wanted to pump CO2 from German CCS power plants into depleted gas fields along the Atlantic coast, elevating the dikes as a barrier against rising sea levels. Unless this possibility has since been discounted, it might now be reviewed for storing CO2 from industrial facilities still dependent on fossil fuels.
Coal power phase-out in the Netherlands would probably have little effect on other European countries, where mining helps maintain social stability. Raising CO2 taxes generally exposes the insufficient preparation for a low-carbon society. The Netherlands has neither a domestic coal industry nor any automobile manufacturers that would impede such policies.
A recent Facebook posting shows the Dutch prime minister biking over to have a meeting with the king. In Berlin, anything less than a Mercedes won’t do.
Complying with Paris Agreement would require Germany to reduce its greenhouse gas emissions to zero along a linear path by 2036. If emissions remained unchanged at 800 Gt/a, on the other hand, only nine years now remain before the fossil fuel industry would have to be shut down completely.