The Hague remains remarkably silent about the energy crisis: consuming less is not a popular message

“Even if the war in the Middle East is over tomorrow, the consequences of the energy crisis will be far-reaching. We will not return to normal anytime soon.” With these words, reminiscent of the corona pandemic, European Commissioner for Energy Dan Jørgensen urged EU member states to use less fuel on Tuesday. “We are in a situation that could worsen. Reducing our energy demand is necessary.”

But these kinds of alarming reports are not yet heard in The Hague. The government has promised to develop possible measures regarding higher energy and fuel prices and will return to this at the end of April. On Wednesday, officials from the Ministry of Economic Affairs and Climate swore in a conversation with Members of Parliament that the Netherlands will be in a better position than in 2022. “We are more resilient,” they said.

For example, more households and companies have a fixed energy contract, the ministry emphasizes. This concerns 56 percent of Dutch people, compared to only 30 percent at “the low point” in 2023. And the Netherlands consumes almost a third less energy than before the previous energy crisis, after the Russian invasion of Ukraine – through energy savings and sustainability.

Also, officials said, energy prices are not nearly as high as they were then. This is also what experts say: gas prices have now roughly doubled compared to before the invasion of Iran, and in 2022 the gas price was at times ten times higher than before.

At the same time, there is a big difference compared to four years ago. Many more types of fossil fuels and their by-products, such as helium and fertilizer, are now in danger of becoming scarcer due to the closed Strait of Hormuz. European countries, for example, achieve 40 percent of certain processed oil productssuch as diesel and kerosene, from the Gulf region.

“2022 was mainly a gas crisis, now we have several problems,” Jørgensen said on Tuesday. There are no physical shortages now, he said, but problems are already starting to become noticeable, especially with diesel and jet fuels. “We are dealing with a very serious situation,” the European Commissioner warned. To illustrate: European countries have already spent an additional 14 billion euros on their fossil fuel imports in the past thirty days due to the attack on Iran.

The higher energy prices ultimately trickle down to almost the entire economy. Companies are faced with higher production and transport costs, and will pass this on in the long term. And higher inflation will cause workers to demand higher wages, which could fuel inflation. In the conversation in the House of Representatives, officials said that energy-intensive industries, such as heavy industry, construction and transport, are particularly likely to notice price increases quickly.

Less driving and flying

Now that the contours of an expanding crisis are becoming visible, the cabinet’s wait-and-see attitude is becoming increasingly striking. The government wants to present an approach for the “short, medium and long term” at the end of April. In addition to measures to dampen increases in fuel costs, this approach must also provide more clarity about energy savings, sustainability and how the Netherlands will become less vulnerable in the future.

“The European Commission is asking member states to develop scenarios and the cabinet is working on that,” said Minister Stientje van Veldhoven (Climate and Green Growth, D66) on Tuesday after a digital meeting between energy ministers. It sounded active, but in doing so the government postponed the Commission’s emphatic call to reduce energy consumption.

For example, Jørgensen asked member states to consider concrete measures such as lowering the speed limit on highways, encouraging working from home and car sharing, avoiding air travel and encouraging the use of public transport, as the International Energy Agency (IEA) proposed two weeks ago. “The more we can do to save diesel and kerosene, the better,” said the European Commissioner.

In other words: lowering fuel taxes only masks the scarcity on the market; Member States must primarily encourage energy savings.

Maximum prices

But politicians in The Hague are not yet enthusiastic about this. This week it became apparent in the House of Representatives that motions calling for more economical energy use received support in particular from some of the (slightly smaller) left-wing parties. Energy saving is not a topic that parties like to sell to their voters.

For example, only PvdD, GroenLinks-PvdA, Volt and the Christian Union voted in favor of a motion calling on the cabinet to come up with energy-saving measures. There was also no majority in favor of investigating a car-free Sunday (SGP, ChristenUnie, 50plus and PvdD). Only Volt and PvdD voted in favor of lowering the speed limit on the highway.

Instead, politics is leaning towards something else: compensating for increased energy costs. For example, a large majority in Parliament called on Tuesday to investigate whether excise duties could not be lower, if it indeed turns out that the government is now benefiting from higher fuel prices through VAT. The coalition voted divided: VVD was in favour, D66 and CDA against.

The House of Representatives also voted in favor of the plan to find out whether a maximum price at the pump can work and whether middle-income earners can also use the energy emergency fund. The government had already included in the coalition agreement the re-establishment of this emergency fund, which is intended to help people with a low income pay energy costs.

While waiting for political measures, citizens are already responding to the current energy crisis. There is a run on the sale of second-hand electric cars, BOVAG, representative of the Dutch car industry, reported on Wednesday. Sales increased by almost 50 percent compared to February last year. It has previously emerged that the popularity of heat pumps and home batteries has increased significantly since the outbreak of the war in Iran.

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