While Europe swelters in an unprecedented climate change-induced heatwave, on the 25^th of June a majority in the Dutch Parliament voted to abolish a key piece of legislation designed to incentivise CO₂ emission reductions from industry.

The CO₂ levy was established as part of the 2019 Dutch Climate Agreement, whereby the Dutch government agreed to make billions of euros in subsidies available for industrial decarbonisation. The levy, which sets a minimum price for CO₂ emissions and is only paid if the price of the ETS is lower than the levy amount, acts as ‘insurance’ to ensure that industry invests in emission reduction technologies.

The motion to abolish the levy, proposed by the Christian Democratic Appeal party, argued that the policy was affecting the competitiveness of Dutch industry, and that the necessary preconditions for industry to decarbonise, such as carbon dioxide and hydrogen infrastructure, were not in place. However, in June the Dutch Emissions Authority, which administers the levy, stated that industry had yet to pay anything – due to the ETS price being consistently higher than the levy price and through the availability of exemption rights to certain industries at risk of carbon leakage.[i] It appears therefore, that the CO₂ levy will be abolished before its effectiveness to reduce emission has even been tested.   

At the same time advisory firm PricewaterhouseCoopers (PwC) recently concluded that the subsidies made available to Dutch industry were the highest of all EU Member States.[ii] Despite this, the Dutch energy intensive industry continues to point the finger at the government, effectively holding climate action hostage to the so-called ‘preconditions’, which can in effect only be achieved with commitments from industry itself. 

“The Dutch energy intensive industry continues to point the finger at the government, effectively holding climate action hostage to the so-called ‘preconditions’, which can in effect only be achieved with commitments from industry itself.”

Jonas Helseth, Executive Director, Bellona Europa.

Netherlands-based NGO Natuur & Milieu called the removal of the CO₂ levy a short-sighted decision and pointed towards a reduced demand for fossil-based products, high energy prices and aging installations as the real reasons affecting the competitiveness of Dutch industry.[iii] Reports from the Netherlands Emissions Authority established that many industrial emitters, particularly in the chemical and refining sectors, are consistently operating far below the EU’s most efficient industrial benchmarks, and in some cases CO₂ efficiency is reducing.[iv] This would seem to further highlight the lack of investment in cleaner production by Dutch industry in recent years.  

Abolishing the CO₂ levy is set to blow a hole in Dutch climate policy. Emissions reductions in industry were targeted to be reduced from approximately 50 MtCO₂ in 2021 to 29 MtCO₂ in 2030. In 2024, the Dutch Environmental Assessment Agency estimated that emission reductions were already considerably off-track, with projected emissions from industry estimated to land between 33 and 43 MtCO₂ in 2030.[v]   

Reflecting on of the recent Eurobarometer survey, whereby 85% of Europeans believe that climate change is a serious problem[vi], one can only hope that the result of the forthcoming Dutch elections in October will result in a cabinet with a renewed commitment to addressing climate change.

By: Jonas Helseth, Executive Director, Bellona Europa

[i] https://www.emissieautoriteit.nl/actueel/nieuws/2025/05/01/nea-verwacht-nog-geen-opbrengsten-co2-heffing-industrie-over-2024

[ii] https://open.overheid.nl/documenten/f24c5701-8eef-4133-b7ca-05a26e5fcb7b/file

[iii] Afschaffing CO2-heffing is kaalslag klimaatbeleid | Natuur & Milieu   

[iv] Nog geen groene groei industrie | Nieuwsbericht | Nederlandse Emissieautoriteit

[v] Minder afname broeikasgasemissie in plannen industrie | Planbureau voor de Leefomgeving

[vi] Climate change – June 2025 – – Eurobarometer survey