The arrival of the new cabinet, which includes two physicists and a Minister of Climate and Energy, offers prospects for a Netherlands in which we live together with more consideration for nature. This applies not only to the HR policy behind the new government team. The policy plans, which can be read back into the coalition agreement, are also at least cause for hope for a sustainable future. An important aspect of the plans is making sustainable business easier, including for SMEs. What are Rutte IV’s plans that offer opportunities for sustainable businesses? And can we hope that these green plans will actually materialize this time?
Ambitious goals
On a positive note, the new administration has significantly revised upward the long-term goals for reducing CO2 emissions. This was necessary, because this goal was set at 49% reduction in 2030, while the Netherlands, as an EU country, must commit to the 55% agreed upon in the Green Deal. With the goal of 60% reduction by 2030, the Netherlands even wants to lead the way with its climate law. Even after 2030, the Netherlands wants to continue ambitiously, aiming for 70% in 2035 and 80% in 2040. Of course, the roadmap for the next 18 years has yet to be worked out, but for sustainable businesses it is good to know that the government’s goals (at least on paper) are in line with their own.
Also, are these goals achievable?
At Empact, we believe that creating a sustainable future is not a matter of nice talk, but of doing. And that indeed starts with setting goals, but they have to be realistic and appropriate to the resources at your disposal. In this regard, there is still quite a gap between the promises and the resources that are released to deliver on them. Most experts agree that about 2 to 5% of GNP needs to be invested annually to become climate neutral in 2050. For the Netherlands this means 16 to 40 billion euros per year; much more than is budgeted for by this government. So we still doubt the feasibility of these goals.
CO2 pricing
To achieve climate goals, the government is reaching for the carrot and the stick. In other words: financial incentives for sustainable investments and tax increases for polluters. The former includes the climate and transition fund, from which 35 billion euros must become available for sustainability over the next 10 years. A major burden increase for polluters will be an additional tax on CO2 emissions. Through the European Emissions Trading System (ETS), it is already arranged that companies pay per ton of CO2 they emit, but the amount they must pay will thus be increased by the cabinet. The proceeds of this extra tax will flow back into the climate fund. So in this way, sustainable businesses will not only face lower costs than their not-so-sustainable competitors, but will also be able to finance their own transition more advantageously.
Support for SMEs
Interestingly, the coalition agreement not only addresses industry and large companies, but also explicitly promises support for SMEs. For example, ‘insight and advice on the steps SMEs can take’ will be provided, sustainability will be stimulated and regulations simplified. Future policy will also be tested for its impact 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 such as the Subsidieregeling Verduurzaming MKB (SVM) will be expanded rather than phased out. A good thing, but it remains to be seen whether the cabinet will also put its money where its mouth is.
Emission reduction mobility and transportation
It is not only in industry and business that emissions must be significantly reduced; the mobility and transport sector must also be made more sustainable by the government. In this area, too, the policy will be fleshed out with financial incentives. There will most likely be a tax on kerosene (at EU level), 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 importing from Asia or South America, because transport costs will increase rather than decrease. It will also become more attractive in the coming years to cooperate with transport companies with an electric fleet, or to invest in electric trucks themselves, also because the infrastructure (charging stations) will be addressed by the new government.
Investment in new technologies
Most (22 billion) of the aforementioned 35 billion euros in the climate and transition fund, the cabinet wants to spend on making industry more sustainable. 7 billion will be spent on infrastructure, such as the construction a much heavier electricity grid, while 15 billion has been set aside 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 benefit. And of course, all companies that will soon purchase raw materials from plants running on hydrogen will benefit from cost reductions, but then we are already a little further into the future.
So we can conclude that on paper the new administration is certainly going to make sustainable business easy. Whether these plans will also lead to the desired results, the next few years will show.