Policies for a Carbon-Neutral Industry in the Netherlands

image of Policies for a Carbon-Neutral Industry in the Netherlands

This report presents a comprehensive assessment of the policy instruments adopted by the Netherlands to reach carbon neutrality in its manufacturing sector by 2050. The analysis illustrates the strength of combining a strong commitment to raising carbon prices with ambitious technology support, uncovers the pervasiveness of competitiveness provisions, and highlights the trade-off between short-term emissions cuts and longer-term technology shift. The Netherlands’ carbon levy sets an ambitious price trajectory to 2030, but is tempered by extensive preferential treatment to energy-intensive users, yielding a highly unequal carbon price across firms and sectors. The country’s technology support focuses on the cost-effective deployment of low-carbon options, which ensures least-cost decarbonisation in the short run but favours relatively mature technologies. The report offers recommendations for policy adjustments to reach the country’s carbon neutrality objective, including the gradual removal of exemptions, enhanced support for emerging technologies and greater visibility over future infrastructure plans.


Decarbonisation support: a comparison with Germany

This chapter reviews policy instruments aimed at reducing greenhouse gas emissions in German industry and compares the German and Dutch policy landscapes. The German policy mix focuses strongly on energy efficiency and on recycling. Compared with the Netherlands, the German government is more reluctant to develop biomass and CCS. Germany’s innovation funding policies strongly focus on fundamental research and CAPEX support, while the Netherlands provide greater support to demonstration projects and deployment. As a consequence, high operational costs are still a major barrier for large-scale investments in Germany.


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