Policies for a Carbon-Neutral Industry in the Netherlands
This report presents a comprehensive assessment of the policy instruments adopted
by the Netherlands to reach carbon neutrality in its manufacturing sector by 2050.
The analysis illustrates the strength of combining a strong commitment to raising
carbon prices with ambitious technology support, uncovers the pervasiveness of competitiveness
provisions, and highlights the trade-off between short-term emissions cuts and longer-term
technology shift. The Netherlands’ carbon levy sets an ambitious price trajectory
to 2030, but is tempered by extensive preferential treatment to energy-intensive users,
yielding a highly unequal carbon price across firms and sectors. The country’s technology
support focuses on the cost-effective deployment of low-carbon options, which ensures
least-cost decarbonisation in the short run but favours relatively mature technologies.
The report offers recommendations for policy adjustments to reach the country’s carbon
neutrality objective, including the gradual removal of exemptions, enhanced support
for emerging technologies and greater visibility over future infrastructure plans.
Published on October 15, 2021