look carefully at the consequences of ending fossil subsidies

It was already known before the motion was voted on that a majority of the House of Representatives was in favor. In addition to the petitioners, CDA, PvdA, Christian Union, SP, Volt and Member Gündoğan were also in favor. Ultimately, the VVD also voted in favor. Three-quarters of the MPs voted in favor of this. The voting result was received with cheers in the public gallery by Extinction Rebellion activists.

Silvio Erkens of the VVD said just before the vote that his party is still against an “abrupt reduction” of fossil subsidies. This would push up household energy bills and push companies across the border. “With that we would be cleaning up our own street and not helping the climate.”

But the MP agrees with climate minister Rob Jetten’s interpretation of the request to consider how fossil subsidies can be phased out in two, five or seven years. The minister sees this as a suggestion from the authors of the motion and concludes that longer periods may also be considered. In this way, according to Erkens, “a more focused discussion” about the subsidies is possible. He is positive about stopping “tax exemptions” – as he calls them – if they stand in the way of sustainability.

Action group Extinction Rebellion will temporarily stop the blockades on the Utrechtsebaan (A12) in The Hague because the motion has been adopted.

European coordination

“VNO-NCW also believes that fossil subsidies should be phased out; a lot of work has already been done to this end by the previous cabinet. It is important to do this in a sensible way,” writes the lobby organization for the Dutch business community.

VNO-NCW also believes it is important that the Netherlands coordinates the abolition of subsidies at European level. This should combat unfair competition and prevent companies from moving to continue emitting CO2 elsewhere. VNO-NCW is also satisfied that the motion also calls for attention to the consequences for vulnerable people and companies of abolishing fossil subsidies.

The following fossil subsidies currently exist:

• Exemption for the use of coal and gas to generate electricity. Only users of that electricity have to pay taxes, not those who generate it. In this way, the government prevents tax from being paid twice on the same electricity. This is also not allowed according to the European Energy Tax Directive.
• Discount on energy tax for greenhouse horticulture. Companies in greenhouse horticulture receive this discount to avoid having to pay proportionately more tax than other companies that also use a lot of energy. In exchange for this discount, they are allowed to emit a maximum amount of CO2. If they emit more, they pay for it. This subsidy will be abolished in 2025.
• Lower energy tax for large energy consumers. Large energy consumers pay less energy tax. This is done so that Dutch companies can continue to compete with other European countries, which often also receive such a discount in their own country.

There are also some (future) measures by the government to reduce fossil subsidies:

• To ensure that companies become more sustainable more quickly, the government wants to reduce the energy tax discount for large consumers. The 2023 Tax Plan contains the first steps in this regard. The government also wants to increase the tax level in Europe, so that more companies become more sustainable and Dutch companies do not have a competitive disadvantage.
• In the 2024 Tax Package, proposals have been made to the House of Representatives for further pricing of natural gas and greenhouse gas emissions in greenhouse horticulture and the abolition of various tax exemptions for the industry in order to achieve the emission reduction target in 2030.

Source: VNO-NCW/Central Government

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