After four months of negotiations involving approximately 100 parties, the proposal for the main features of the Climate Agreement (voorstel voor hoofdlijnen van een Klimaatakkoord – the “Proposal“) was published on 10 July 2018. This blog outlines the background of the current negotiations in respect of the Climate Agreement in the Netherlands and describes several measures included in the Proposal.

The Climate Agreement

The Dutch government aims to reduce the national greenhouse gas emissions by 49%, based on the emission figures for 1990, by 2030 in order to meet the targets under the Paris Climate Agreement and the EU Revised Renewable Energy Directive. In addition, the Dutch Government announced that it intends to take the lead in raising the European reduction target to 55% by 2030. To achieve these goals, the Dutch Government intends to, among other things, (i) conclude a so-called Climate Agreement (Klimaatakkoord) with several Dutch private and (semi-) public organisations and (ii) adopt the Climate Act (Klimaatwet). The legislative proposal for the Climate Act has recently been sent to Parliament. For a high-level description of this legislative proposal, please refer to our Stibbe-blog d.d. 27 June 2018 (in Dutch – click here).

The negotiations in respect of the Climate Agreement started in March 2018. To streamline these negotiations, the general target CO2 reduction of 49% (or possibly 55%) has been sub-divided into specific (indicative) targets (in megatonnes) per sector. These sectors comprise: (i) electricity, (ii) the built environment, (iii) industry, (iv) agriculture & land use and (v) mobility.

*Including the effects of the circular economy.

**Including 1,5 megaton reduction from land use, which does not count for realising the 49% reduction.

For each of the five sectors a so-called sector table (sectortafel) has been created in which the relevant stakeholders of each sector are represented. These sector tables are the main forum for discussions and negotiations in respect of the Climate Agreement. The Climate Agreement is expected to contain binding commitments by and agreements between the relevant stakeholders of each sector.

The Proposal

On 10 July 2018, the Climate Board (Klimaatberaad), the commission that monitors the overall progress of the negotiations, published the Proposal (in Dutch – click here). The Proposal will be assessed by the Netherlands Environmental Assessment Agency (Planbureau voor de Leefomgeving) and Statistics Netherlands (Centraal Bureau voor de Statistiek) during the remainder of the summer of 2018.

A non-exhaustive overview of some measures and (preliminary) targets included in the Proposal is set out below. The proposed measures are subject to further review by and negotiations between the relevant parties.

Electricity

  • Increasing the production of renewable electricity from 17 Twh in 2018 to 84 Twh in 2030, of which 49 Twh will be produced by offshore windfarms and 35 Twh will be produced by onshore wind and solar farms.
  • No subsidies for renewable electricity after 2025. If necessary, alternative instruments may be used to secure the security of investments after 2025.

The built environment

  • Increasing the tax on gas and decreasing the tax on electricity to stimulate investment in insulation and sustainable heating.
  • 75% of the new housing, to be built between 1 July 2018 and 2021, will be constructed without a connection to the natural gas grid.

Industry

  • Electrification of for example, high temperature boilers and chemical processes.
  • Using carbon capture and storage (CCS) as a possibility to reduce the CO2 emissions in essential sectors in the short term.
  • Compensation for the ‘uneconomic cost’ of the industry transition by a contribution from the government, which may ultimately amount up to EUR 550,000 – EUR 1,000,000 per year.

Agriculture & land use

  • Reducing the methane emissions of the livestock farming equivalent to 1 megaton CO2 by 2030.
  • Reducing food wastage of consumers by 50% in 2030.

Mobility

  • Electrification of cars, vans, freight trains and (eventually) trucks and accelerating the roll-out of charging infrastructure.
  • Zero-emission public transport buses as of 2030.

Overall

  • Accelerating the development and roll-out of green hydrogen. Green hydrogen is expected to be widely used as an energy carrier in the electricity, industry, mobility and built environment sector (especially after 2030).

Way Forward

After the assessment of the Proposal by the Netherlands Environment Assessment Agency and Statistics Netherlands, the government and the other parties involved will decide on whether the Proposal will serve as basis for the actual Climate Agreement. The relevant parties will continue to have detailed negotiations in the second half 2018. The government aims to conclude the final version of the Climate Agreement, possibly on the basis of the Proposal, before the end of 2018.