Netherlands unveils green growth package to boost energy transition

The Dutch government has approved an Eur11.4 billion ($13 billion) package of measures to accelerate the country's energy transition, while supporting industrial competitiveness, it said April 25.

Measures include extending electricity cost compensation for industry, investing in carbon capture infrastructure, and expanding the power grid to accommodate more wind and solar capacity growth.

Climate and Green Growth Minister Sophie Hermans emphasized the need for realistic and achievable measures to strengthen the Netherlands' energy independence and industrial base while advancing decarbonization goals.

To address bottlenecks in the power grid, the government plan includes taking a more directive approach on 25 high-priority high-voltage projects, streamlining regulations to shorten approval procedures, and investing in sites where grid infrastructure converges.

Dutch grid operator TenneT will also modify its methods to accelerate projects by up to a year, the government said.

The measures are needed to integrate Dutch renewables and provide sufficient capacity for the electrification of new housing developments.

To stimulate Dutch companies to become more sustainable, the Sustainable Energy Production and Climate Transition Incentive Scheme (SDE++) will be reopened in 2026 with a budget of Eur8 billion, it said.

Elsewhere, the government is also committed to developing policies for a mandatory share of green gas and accelerating a CO2-free electricity sector.

In transport, the government wants to make it easier for people to opt for an electric car, for instances via the business leasing market, the statement after a cabinet meeting on climate targets said.

The government will also extend the Indirect Cost Compensation scheme for three years to reduce electricity costs for energy-intensive industries to create a level playing field with international competitors.

CO2 emissions cuts slowed in 2024

A planned national CO2 levy, effectively creating a floor price for EUA carbon allowances linked to Dutch climate targets, would be delayed to give companies more time to implement decarbonization measures, while maintaining the option to extend the levy beyond 2032, it said.

Overall, the government affirmed its commitment to reaching climate neutrality by 2050.

The Dutch climate law also sets a 2030 target of a 55% reduction in CO2 emissions over 1990.

However, CO2 emissions reductions slowed in 2024 with a 37% reduction over 1990 reached based on around 144 million mtCO2e, according to CBS data.

That requires a further decrease of 27% in the next six years with manufacturing, transport and the agricultural sector each emitting more CO2 than the Dutch electricity sector.

Platts, part of S&P Global Commodity Insights, last assessed EUA carbon allowances (nearest December) at Eur66.23/mtCO2e on April 24.

Aramis CCS, new nuclear

In additional specific measures, the cabinet agreed to allocate Eur639 million to state-owned energy company EBN to participate in the Aramis carbon capture and storage project, with an investment decision expected in 2026.

For hydrogen, the Dutch cabinet earmarked Eur2.1 billion to stimulate production and an additional Eur662 million to encourage industrial applications.

The Netherlands set a relatively modest 4% renewable hydrogen obligation to avoid overburdening consumers and is modifying refinery regulations to make green hydrogen more attractive for fuel production.

In a more detailed letter to Parliament, the climate minister also set out next steps for nuclear, seen by the government as an increasingly important role as a reliable, CO2-free energy source.

Cabinet has taken first steps to establish a state participation that will prepare for the construction of nuclear power plants and will inform shortly about the planning, including location and technology choice for new nuclear power plants as well as steps to keep the Borssele nuclear power plant operating for longer, it said.