The Netherlands gives many more tax breaks to companies for the use of oil, gas and coal than expected. These so-called fossil subsidies amount to an annual amount of between 39.7 and 46.4 billion euros, according to leaked Budget Day documents from climate minister Rob Jetten.
The ministry previously assumed an amount of 4.5 billion euros, while environmental organizations’ own calculations came to 37.5 billion euros.
There has been a heated discussion recently about these fossil subsidies, which are financial arrangements that favor the use of fossil fuels. With greater use of oil, gas or coal, relatively less tax often needs to be paid.
Kerosene
This concerns large steel companies, inland shipping, greenhouse horticulture, coal-fired power stations and oil refineries. Airline companies, for example, do not pay taxes on kerosene in the Netherlands, which earns them more than 2 billion euros annually, according to the leaked documents.
Environmental organizations, such as action group Extinction Rebellion, have recently been taking action, including the occupation of the A12 in The Hague.
A majority in the House of Representatives and outgoing Minister Jetten of Economic Affairs and Climate believe that fossil subsidies should be phased out, but there is discussion about the pace and how this should be done. Jetten also first wanted to map out which financial incentives were involved and he had the Central Planning Bureau (CPB) and the Netherlands Environmental Assessment Agency (PBL) make an inventory. All kinds of arrangements are included.
The piece is mainly descriptive and Jetten does not yet present a plan of action. It is clear that a start has been made on phasing out disguised subsidies, amounting to 6.2 billion euros. Greenhouse horticulture will receive less tax benefits and an exemption from motor vehicle tax for vintage cars will be reduced from 2028.
“Fossil subsidies must be phased out. In this way we say goodbye to the old economy and create space for new jobs and prosperity,” Jetten responds to X on the news that fossil subsidies are even higher than expected.
“The then cabinet also said this in 2009. Since then, fossil subsidies have only increased,” Extinction Rebellion also responded to X on the minister.
‘More determination’
“It is always worse than we think,” Lucas Winnips, spokesperson for Extinction Rebellion, told NOS. He thinks that this will provide even more motivation for the supporters of the action group to demonstrate. “I expect more people will stay on the A12 with more determination.”
“We cannot wait for a new climate agreement, because that could take another year,” says Winnips. “We will continue until measures are taken.” It does not matter that some disguised subsidies are sometimes also determined at international level. “The whole world is in a climate crisis,”
The VNO-NCW business association wants to wait until it becomes known on Budget Day what counts as fossil subsidies. Phasing out fossil subsidies is necessary, the employers’ organization says, but this must be done carefully to prevent job losses and rising prices. “Many entrepreneurs do not yet have alternatives due to, among other things, the clogged power grid and lack of other alternatives.”
How do fossil subsidies work? NOS op 3 explains it to you in the video below:
- Protesters want an end to fossil subsidies, that’s how it works in the Netherlands
- Research: 37.5 billion euros in annual subsidy for the fossil sector
- Budget memorandum: purchasing power increases by 1.8 percent, more money to combat poverty
