Keywords: Emissions Trading, CO2 reduction, Sustainable industry, standards, pricing, stimulating, facilitating, SMEs, circular economy.
The European Emissions Trading
On 1 January 2005, a system of CO2 emissions trading (the ETS) was launched in the EU, and therefore also in the Netherlands. This trade takes place between companies in the heavy industry and the electricity sector, which emit many of these substances. The trade in CO2 emission rights is part of the climate policy. Through this policy, the government encourages all target groups - households, traffic, energy and industrial sectors, agriculture, trade, services and government - to achieve the domestic Kyoto target. An ETS is a policy instrument that sets a ceiling on emissions. Participants in the ETS must monitor and report their emissions and hand over an emission allowance for every tonne of CO2 when reporting. These emission rights can be traded.
On 17 September 2020, the European Commission published a proposal to increase the European 2030 target for greenhouse gas reductions from at least 40% to at least 55% compared to 1990. The European Council approved on 11 December 2020 agreed to the target of at least 55%.
Green industrial policy
In 2019, it was agreed in the Climate Agreement for industry to achieve a reduction of greenhouse gas emissions of 14.3 Mton per year by 2030. In order to guarantee this goal, the CO2 tax for industry has been introduced.
In the Dutch Coalition Agreement, a national statutory CO2 reduction of 55% has been agreed and a target of 60% compared to 1990. It follows that the CO2 reduction target for industry will be increased by an indicative 5 – 5.9 Mton per year, possibly increased by tailor-made agreements.
Making the industry more sustainable will be deployed on 4 lines. These lines will be explained in more detail below.
The Dutch cabinet will direct infrastructure projects of national importance through the Multi-Year Program Infrastructure and Climate (MIEK). In addition, the Sustainable Industry Infrastructure Program (PIDI) is working with industry, network operators, energy producers and other government authorities on options for bringing the desired realization data from industry and the planned commissioning dates for infrastructure closer together.
In the Dutch Coalition Agreement, the “Top 10-20 largest emitters” is indicated as the target group. Binding agreements will be made with companies about the realization of additional CO2 reduction and about long-term sustainability plans for climate neutral and circular production and large-scale technological breakthrough projects.
Making SMEs more sustainable will be stimulated through 2 instruments.
Firstly, the CO2 reduction can be related to more drastic adjustments to production processes that have a payback period of more than 5 years.
Secondly, the optimization of generic subsidy instruments will help SMEs to realize sustainability projects.
According to the Dutch Coalition Agreement, an ambitious climate target for the circular economy and an associated implementation program will be achieved. The government's incentive policy offers scope for circular investments that also lead to CO2 reduction. Improvements to the subsidy schemes for large-scale circular projects will be included in the implementation program. The government is also working on a policy package consisting of normative, pricing and incentive measures.
In case of questions, please feel free to contact NAZALI at: nazali_amsterdam@nazali.com
References:
https://www.rijksoverheid.nl/documenten/kamerstukken/2022/04/05/verduurzaming-van-de-industrie
https://www.emissieautoriteit.nl/onderwerpen/wat-is-emissiehandel
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