Will the new Dutch Government make sustainable business easier?

The arrival of the new cabinet, comprising two physicists and a minister for Climate and Energy, offers prospects for a Netherlands in which we live together with more attention to nature. This does not only apply to the HR policy behind the new government team. The policy plans, which can be read in the coalition agreement, are in any case cause for hope for a sustainable future. An important aspect of the plans is making sustainable business easier, also for SMEs. What are Rutte IV’s plans that offer opportunities for sustainable companies? And can we hope that these green plans really become reality this time?

Klimaatakkoord duurzaamheid

Ambitious Goals

On the positive side, the new cabinet has considerably raised the long-term goals for reducing CO2 emissions. We had to, because this target was a 49% reduction by 2030, while the Netherlands, as an EU country, must commit to the 55% which was agreed in the Green Deal. With the target of a 60% reduction by 2030, the Netherlands even wants to lead the way. The Netherlands also wants to continue ambitiously after 2030, by aiming for 70% in 2035 and 80% in 2040. Of course, the roadmap for the next 18 years still needs to be worked out, but for sustainable companies it is good to know that the goals of the government (at least on paper) in line with its own.

Are these goals achievable?

At Empact we believe that creating a sustainable future is not a matter of sweet talk, but of action. And that indeed starts with setting goals, but then they have to be realistic and match the resources at your disposal. In that regard, there is still a considerable gap between the promises and the resources that are being made available to fulfill them. Most experts agree that about 2 to 5% of the GDP needs to be invested annually to become climate neutral by 2050. So for the Netherlands you are talking about 16 to 40 billion euros per year; much more than budgeted by this cabinet. We therefore still doubt the feasibility of these goals.

Climate accounting

In order to achieve the climate goals, the government is reaching for the carrot and the stick. In other words: financial stimulation of sustainable investments and an increase in the burden for polluters. The first includes the Climate and Transition Fund, from which 35 billion euros must be made available over the next 10 years for sustainability. An important increase in the tax burden for polluters will be an additional tax on CO2 emissions. The European emissions trading system (ETS) has already arranged that companies pay per tonne of CO2 they emit, but the amount they have to pay will therefore be increased by the cabinet. The proceeds of this extra tax will flow back into the climate fund. In this way, sustainable companies not only have to deal with lower costs than their not yet sustainable competitors, but they can also finance their own transition more economically.

Support for SMEs

It is interesting that the coalition agreement does not only deal with industry and large companies, but that SMEs are also explicitly promised support. For example, ‘insight and advice about the steps that SMEs can take’ will be provided, sustainability will be stimulated and regulations simplified. Future policy will also be tested for its effects on SMEs. What this will mean in concrete terms remains to be seen in the coming years, but the promises are there. In any case, schemes like the Subsidieregeling Verduurzaming MKB (SVM) be expanded rather than phased out. This is a good thing, but it remains to be seen whether the cabinet will also put its words into action.

Emission reduction mobility and transport

Emissions must not only be significantly reduced in industry and business, but also the mobility and transport sector must be made considerably more sustainable by the government. In this area too, policy is given shape through financial incentives. For example (at EU level) there will most likely be a tax on kerosene, and investments in the development and production of synthetic kerosene and sustainable freight transport will be stimulated. For companies, this will mean, among other things, that buying locally will become more interesting compared to imports from Asia or South America, because transport costs will rise rather than fall. In the coming years, it will also become more attractive to collaborate with transport companies with an electric fleet, or to invest in electric trucks yourself, also because the infrastructure (charging stations) will be tackled by the new government.

Investments in new technologies

The government wants to spend the largest part (22 billion) of the aforementioned 35 billion euros in the climate and transition fund on making industry more sustainable. 7 billion will be spent on infrastructure, such as building a much heavier electricity grid, while 15 billion is earmarked for the development of new technologies, such as hydrogen. The latter is particularly good news for large projects in Hydrogen Valley Groningen, but smaller companies with good hydrogen ideas will also reap the benefits. And of course all companies that will soon purchase raw materials from factories that run on hydrogen will benefit from cost reductions, but then we are already a bit further in the future.

We can therefore conclude that on paper the new cabinet will certainly ensure that sustainable business becomes easy. The coming years will show whether these plans will also lead to the desired results.

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