End of unbridled nitrogen trade, government takes control with new package of measures

Minister Christianne van der Wal after the presentation of her new nitrogen plans.Image Daniel Rosenthal / de Volkskrant

With this, the national government seizes control over the scarce nitrogen space. The provinces and the central government need that space for nature restoration, road and housing construction, helping thousands of farmers without permits and other economic activities. For the past three and a half years, the trading of nitrogen space has been left to the free market, allowing crafty entrepreneurs to make big profits and scarce space to be used efficiently.

A few weeks ago there was great commotion in the Provincial Council of Gelderland, because Rijkswaterstaat had ‘secretly’ bought out six Gelderland farmers in order to free up nitrogen space for the construction of a ring road in Utrecht.

The Utrecht States members were angry because of a rumor that Schiphol was ‘shopping’ for farms in that province to collect nitrogen rights for aviation. Two years earlier, the province of North Brabant secretly bought farms in Drenthe, Zeeland and North Holland to enable the construction of an industrial estate in Moerdijk.

Nitrogen banks

The cabinet wants to work out the priority right to nitrogen space in the near future together with the provinces and the sectors involved (including the farmers). The space released, including that of peak loaders (companies and farmers that cause a relatively large amount of nitrogen precipitation in nature reserves), is stored in several nitrogen banks.

There will be two national nitrogen banks. In one, the government reserves space for ‘projects of major social importance’, such as major infrastructure works. The other will be a ‘microdeposition bank’, intended to enable projects that cause very little nitrogen emissions. This probably concerns construction work and small housing projects.

The microdeposition bank thus offers an answer to the recent ruling of the Council of State, which ruled at the beginning of this month that the government should not ignore the temporary nitrogen emissions from construction work. This very low nitrogen emission must also be compensated, according to the administrative court.

In addition, nine provincial target banks and a provincial microdeposition bank have been set up, which are managed by the provinces. The nitrogen space in the target banks is reserved for a specific purpose, such as legalizing unlicensed farmers or for housing.

Ghost Emissions

Minister Christianne van der Wal (Nature and Nitrogen) also wants to limit the ’empty’ nitrogen space in nature permits from farmers and industrial companies. Nature permits contain on average 25 to 40 percent more nitrogen emission allowances than the permit holder actually uses. Those ‘ghost emissions’ can now simply be sold and used to expand livestock herds and build roads and industrial estates.

Despite the fact that 30 percent of the ’emission rights’ are skimmed off for the benefit of nature with each sale of nitrogen space, the actual emissions are increasing rather than decreasing in this way. After all, ghost emissions are converted into real emissions. This is probably not legally tenable, writes Minister Van der Wal in her letter to parliament on Friday.

To prevent the use of empty nitrogen space, the cabinet is tightening the requirements for nature permits. If a farmer or company wants to develop new activities and submits a permit application for this, the competent authority (municipality, province or central government) must check whether the permit still contains unused nitrogen rights.

If so, and those rights are not needed for the new business activity, they will be revoked. For reasons of feasibility, according to Van der Wal, it is not possible to examine all existing nature permits and check for ghost emissions.

Farmers can create extra nitrogen space in their existing permit by installing an air scrubber in their barn, or by reducing their emissions with other sustainable innovations. Until now, they could use that extra space to expand their herd. This changes.

From now on, the extra nitrogen space may no longer be used for more cows, pigs and chickens if the government has subsidized the innovation or if the sustainability of the livestock shed is the result of a legal obligation.

Skimming rate

The government is also tightening up the conditions for the sale of nitrogen space to third parties. If a business owner or farmer wants to sell his nitrogen capacity to someone else (another livestock farmer, company, province or Rijkswaterstaat), from now on not 30 percent, but 40 percent of the available nitrogen rights will be skimmed off for nature. In fact, the owner can only sell 60 percent of his nitrogen space, the government withdraws the rest as soon as the nitrogen rights change hands.

The cabinet wants to make an exception for construction projects that are necessary for the energy transition and the climate goals. The government has commissioned a study into whether the skimming percentage for these projects can be reduced to 20 percent. That would make the construction of wind turbines and solar parks easier and relatively cheaper.

The government is also taking measures to make trading in ‘dormant’ licenses impossible. It has already happened a number of times that the required nitrogen space for new construction projects has been released by withdrawing old nature permits from companies and farms that were closed years ago.

Those farmers and companies have sometimes not been emitting nitrogen for years, but the nitrogen space in the old permits did serve as ‘compensation’ for new emissions. This too is trading ghost emissions for real emissions, so it is probably legally very vulnerable.

These are the plans of the cabinet

The function of the IJsselmeer as a freshwater buffer during prolonged drought will be strengthened. Now the water level there may fluctuate by a maximum of 20 cm during the year; that will be 50 cm. In the summer, the water level may now drop further than it has done so far. As a result, the IJsselmeer can be used as a reservoir that provides the western Netherlands with extra fresh water during dry summers. For the same reason, land reclamation in the lake is no longer allowed. The Marker Wadden archipelago nature reserve may therefore not be expanded.

Large consumers of drinking water must reduce their consumption by 20 percent. Households are also being asked to save 20 percent on drinking water (how the cabinet intends to enforce this is unclear). In 2035, the annual drinking water consumption per capita must have fallen from 125 to 100 litres.

The provinces must identify who is pumping up groundwater, including small consumers such as farmers. From now on, less groundwater may be extracted in and around Natura 2000 areas. As compensation, drinking water companies are allowed to exploit new drinking water sources in other places. On drought-sensitive high sandy soils, water boards must raise the groundwater level in steps of 10 to 50 cm.

The cabinet wants 2,000 to 3,000 peak loaders, both farmers and industrial companies, to voluntarily end their business in the short term. These peak loaders can report themselves, but are also approached proactively by a government working group. The cabinet hopes to reach the target number within a year. If this does not work, then we must, with pain in our hearts, enter into a discussion with a targeted group in which mandatory instruments will be used if necessary,’ the cabinet writes. In that case, for some farmers, expropriation will still be necessary.

ttn-23