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.
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.