The minister succeeds with difficulty: making agreements with major polluters about lower emissions

It is one of the main ways in which the Netherlands reduces CO emissions₂ wants to push back – but it was much slower than expected in 2022.

Minister Micky Adriaansens (Economic Affairs and Climate, VVD) wanted to sign as many declarations of intent as possible with large industrial emitters about reducing emissions and possible state aid. Also in November, Adriaansens said he expected to sign “four to five” agreements by the end of this year, in addition to an earlier one with steel producer Tata Steel.

Finally, before the Christmas recess, agreements were made with plastic manufacturer Dow Chemical in Terneuzen and salt and chlorine manufacturer Nobian, with large factories in Delfzijl and Rotterdam. In total, the minister made three appointments in 2022.

It was one of the most striking plans of the coalition agreement of the Rutte IV cabinet: the so-called ‘customized agreements’ with major emitters. The government wanted to sit around the table with twenty large industrial companies and make firm agreements about reducing emissions, in exchange for state support for the transition to sustainable production.

Billions have been allocated to the CO₂emissions of the Netherlands must be reduced enormously: for example, Dow and Tata Steel together already emit about 10 percent of the Dutch total. This also includes refineries of, for example, Shell, but also fertilizer factory Yara in Sluiskil in Zeeland.

Foreign headquarters

After many discussions, it is now becoming clear: it appears to be very complicated to make these kinds of agreements, which means that they are made less quickly than planned.

It worked with Dow, Tata and Nobian. So the Ministry and Nobian agreed in mid-December that the company wants to be climate neutral by 2030, for example by using electricity instead of gas for the production of salt. That can make a difference of 1 percent of the total Dutch gas consumption. There is not yet an amount of state aid – after all, these are declarations of intent, which must be further elaborated in 2023.

Even recording this type of draft agreement with other companies is still a very complicated process, as Adriaansens explained in November in written answers to parliamentary questions – when she still planned to sign many more agreements this year. Many companies still have to think about their sustainability strategy, or need time to ‘align’ matters with foreign headquarters. And the current “challenging market conditions” also require a lot of time and attention.

According to the minister, time is also needed to take a good look at what exactly is being agreed. The agreements are not intended to ultimately cover ‘regular maintenance’ of factories, or the implementation of ‘ongoing policies’. The ministry also says that it has not received any signals that companies are trying to push all kinds of other cost items under the agreements.

The pace of the tailor-made agreements has already been criticized in the House of Representatives. For example, the VVD thought the plan to have all draft agreements completed by the end of 2023 was far too unambitious. The Party for the Animals (PvdD) is also unhappy about what it sees as “months of negotiations with major polluters about how to make their business operations more sustainable”, according to previous written parliamentary questions. According to the PvdD, companies have had plenty of time for this.

Many parties in the House agree in principle on giving support to industrial companies. But there is much debate about to what extent this should happen, and under what conditions. For example, GroenLinks, PvdA and coalition partner D66 wonder whether the minister does not want too much. Wouldn’t it be better to have a somewhat stricter vision of what can and cannot stay in the Netherlands before companies receive money? According to D66, the Netherlands currently has a “disproportionately” high number of energy-intensive companies.

There is also concern among economists that too many companies may receive money. Sander de Bruyn of economic research agency CE Delft pointed this out earlier NRC also notes that a steel or fertilizer factory in northern Scandinavia may in the future be able to produce much cheaper than a factory elsewhere in Europe, given the large amounts of stable green electricity available there – crucial for greener factories that need a lot of electricity .

Also read this recent report on green steel from northern Sweden: Just below the Arctic Circle, a green steel industry is sprouting

Derk Loorbach, professor of socio-economic transitions at Erasmus University, has already warned that some companies will probably not be able to participate in the transition. “For example, the Netherlands now has refineries that process oil,” he told NRC in 2021. “That’s a finite business.”

Minister Adriaansens estimates for the time being that there are good opportunities for a very large part of the Dutch industry in a green future – partly because of the favorable logistical location of the country by the sea. In her answer to parliamentary questions, she referred to a report by research agency Ecorys, which concluded that in 2050 the energy competitive position of the Netherlands will be comparable to that of many other countries, such as Germany, the United States and China. But she also wrote: “In the long run, much is uncertain. Energy-intensive companies will also reconsider where an installation can best be placed.”