Despite climate agreements, the Netherlands supports the fossil sector with 7.6 billion euros a year
Although outgoing economics minister Henk Kamp stated in May of this year that fossil fuels are not subsidised in the Netherlands, a report out today shows that this is clearly not the case. The report. ‘Phase-Out 2020: Monitoring Europe’s fossil fuel subsidies’, by the Overseas Development Institute (ODI) and Climate Action Network Europe (CAN-Europe), says that the Netherlands is supporting the fossil sector at home and abroad with more than 7.6 billion euros a year (1). The Netherlands made international agreements as long ago as 2009 (2) to ban subsidies for fossil fuels. Environment NGO Milieudefensie and Both ENDS – both members of CAN-Europe – call attention to these findings because they find it unacceptable that the government perpetuates our dependence on fossil fuels in this way.
The report provides an overview of the substantial sums of money that eleven EU member states and the EU institutions continue to invest in the production and consumption of fossil fuels. In total, these investments come to 112 billon euros a year. The report concludes that most countries, including the Netherlands, have no concrete plans to phase out their fossil fuel subsidies.
“The government already has its work cut out to achieve the Paris goals,’ says Milieudefensie director Donald Pols. ‘So we shouldn’t be pumping money into the fossil sector. We can better invest the money in sustainable energy supplies – an area in which we are lagging seriously behind. Then we can also stop extracting gas in Groningen more quickly.”
The biggest fossil fuel subsidy in the Netherlands is the energy tax exemption for air transport and shipping, sectors that are way behind in terms of sustainability. The exemption poses a serious threat to achievement of the Paris goals, and costs the Netherlands 3.5 billion euros in lost tax revenues every year. The government also supports the oil and gas production industry in the Netherlands to the tune of 144 million euros a year. Investments by companies in the fossil sector that are largely in the hands of the state amount to 946 million euros a year.
The total amount with which the Netherlands supports the fossil industry every year is most probably much higher than the 7.6 billion euros calculated in the report. For almost half of the support measures the researchers identified, they could not determine exact amounts due to lack of transparency. Milieudefensie and Both ENDS find that unacceptable, as without transparency, it is almost impossible to determine whether the Netherlands is complying with its international agreements.
The Netherlands also supports the fossil fuel sector abroad with more than two billion euros a year. “It does this mainly in the form of export support,’ says Niels Hazekamp, policy advisor at Both ENDS. “The Dutch economy is strongly focused on exports and the government supports companies that are active abroad with, for example, export credit insurance to reduce their financial risks. By far the greatest share of export credit insurance goes to oil- and gas-related projects, while the Netherlands should really be supporting sustainable and innovative projects.”
For more information:
The full report Phase-Out 2020: Monitoring Europe’s fossil fuel subsidies
The executive summary of Phase-Out 2020: Monitoring Europe’s fossil fuel subsidies
Milieudefensie press information:
020-5507333 of firstname.lastname@example.org
Niels Hazekamp 020-5306639 of email@example.com
Masja Helmer 020-5306637 of firstname.lastname@example.org
(1) This consists of 4.4 billion euros in direct subsidies and fiscal arrangements, 2.2 billion in international public financing for oil and gas (by public financial bodies) and 946 million in investments by state companies in oil and gas.
(2) The European Union has committed itself to ending environmentally harmful subsidies by 2020. In addition, through the G20 and the G7, European governments have made international agreements to ban fossil fuels.
Photo: Oil transport on Student Energy