Netherlands heading towards carbon neutral economy

Updated: Mar 25, 2021

International Energy Agency
The Netherlands’ Climate Agreement shows broad social and political commitment to its energy transition. PHOTO: ImageCollab

The Netherlands is taking a balanced approach to its plans for a rapid transition to a carbon-neutral economy that will support strong growth and energy security, according to a new energy policy report by the International Energy Agency (IEA) released on 23 September. The Netherlands has focused its energy and climate policy on cutting greenhouse emissions with targets to reduce emissions by 49% by 2030 and by 95% from 1990 levels by 2050, to drive this growth.

Dr Fatih Birol, executive director of the IEA, says it adopted a national Climate Agreement in June 2019, developed through a process involving diverse groups from across Dutch society, working together to define policies and measures aimed at achieving these targets. He says the Netherlands’ Climate Agreement shows broad social and political commitment to its energy transition and serves as an excellent example of how collaborative policy-making can lay the framework for ambitious targets.

“The IEA looks forward to supporting the government as it implements its plans and applauds government leadership in supporting electric vehicles through incentives to buy them and significant investments in charging infrastructure. I congratulate the Netherlands for developing a broad policy framework with robust measures to drive emission reductions in all sectors. The balance of ambitious targets and competitive support measures will help drive a cost-effective energy transition,” says the executive director.

Dr Birol says the Netherlands faces notable challenges, which the IEA Report highlights, since its economy remains heavily reliant on fossil fuels and has a concentration of energy and emission-intensive industries. He says it welcomes steps the government is taking to address these challenges which include introducing carbon pricing for industrial emissions and a competitive subsidy program supporting a variety of emission reduction technologies.

“The report highlights new energy security challenges the Netherlands is facing. In line with its climate targets and in response to safety concerns over earthquakes caused by natural gas production, the government plans to end production from the Groningen gas field by mid-2022. Gas from Groningen covers a large share of the Netherlands’ heating and industrial energy demand and is a key source of regional gas supply,” says the executive director.

According to him, the government is taking firm measures to reduce natural gas demand domestically and in cooperation with neighboring countries is taking a lead role in developing a market for low-carbon hydrogen to partly replace natural gas and drive emission reductions in hard-to-decarbonize sectors like industry and heavy transportation. He says this is complemented by support for carbon capture and storage also aimed at lowering industrial emissions.

“The Netherlands has a clear vision for reducing its dependence on natural gas while protecting energy security. In addition, its commendable leadership on low-carbon hydrogen will help drive cost reductions needed for this important technology to play a key role in accelerating clean energy transitions around the world,” says Dr Birol.

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