editor Climate and Energy
There are no legal obstacles to phasing out a large part of fossil subsidies. This is evident from an overview that Climate Minister Jetten sent to the House of Representatives has sent.
Each scheme has been examined to determine whether it is legally possible to adjust it. ‘Fossil subsidies’ mainly concern tax benefits, which have often existed for decades and in some cases even for more than a hundred years.
Last Friday, the NOS reported that fossil subsidies amounted to a total of 39 to 46 billion euros, a significantly higher amount than the government had taken into account until recently.
It has now been mapped out for each scheme how much money is involved and whether it is possible to stop it. Examples of fossil subsidies that are difficult or impossible to phase out are the costs of using oil as a raw material for making materials and the exemption from excise duty on aviation and shipping fuels.
Due to international agreements, the government cannot simply terminate these arrangements, which are beneficial to the sectors concerned. In total this amounts to approximately 22 billion euros.
Fossil benefits that can be phased out are, for example, the lower excise rate for diesel or the arrangement that large energy consumers pay less tax as they consume more energy. As far as Minister Jetten is concerned, the publication of the new overview can put an end to the discussion about the definition and amount of fossil subsidies.
“Over the past few years we have had a guess-no game about whether or not there are fossil subsidies. Predecessors of mine said: it is only 4 billion euros, so what are we actually talking about. And now, with the total overview, a To make things right, we don’t have to discuss it anymore.”
Researcher Pieter Pauw from TU Eindhoven points out that this discussion has been going on for a long time. “The G20 has actually been working on it since 2009. At the time, former Prime Minister Balkenende also promised that the Netherlands would phase out them. But apparently it is easy to say something and then not do it.” Pauw calls the lack of legal obstacles to phasing out subsidies important news, but says that a clear vision for phasing out is lacking.
The outgoing cabinet leaves such a reduction plan to a new government. Jetten does call on climate activists and companies to think together about how the Netherlands can phase out fossil subsidies.
“I invite all kinds of activists, environmental organizations, but certainly also companies to sit down together and make a good plan together on how we can green the Netherlands and say goodbye to these fossil benefits.”
He also emphasizes that the government has already started phasing out schemes amounting to four to six billion euros. “For example, companies in greenhouse horticulture or brick factories that have to pay more tax on their energy consumption. A special coal exemption for Tata Steel has also been abolished. So we are already well on our way, but a lot still needs to be done.”
At the same time, he warns of the consequences if fossil subsidies are reduced too quickly, for example for employment. Employers’ organization VNO-NCW is also afraid of stopping subsidies too quickly, but is pleased that there is now more clarity about the consequences of phasing out some measures.
“The impact analyzes clearly show that alternatives to fossil fuels and raw materials are not yet available and entrepreneurs often have no perspective for action. You must carefully tailor the phase-out path accordingly.”
According to the organization, the abolition of many regulations requires European coordination, because otherwise “there is a real risk that we will transfer CO2, prices of everyday products will rise and jobs will disappear here”.
Action groups, on the other hand, are mainly in a hurry. Now that it is clear that the amounts involved are billions, various organizations believe that action must be taken quickly. “The effects on a select group of energy-intensive companies should not stand in the way of a good phase-out plan,” write SOMO, Milieudefensie and Fossielvrij NL, among others.
“Waiting only makes things worse for companies,” says Boris Schellekens of SOMO. According to the Young Climate Movement, a lot of money will be made available, “to make public transport cheaper or even free, for example,” says chairman Dion Huidekooper.
- Chamber majority wants to roll back petrol and diesel excise duty increases
- The fossil sector will receive between 39.7 and 46.4 billion euros in subsidies, even more than expected