NOS/Beeld WerktThe port of Rotterdam
NOS Nieuws•vandaag, 07:01
Judith van de Hulsbeek
editor Climate and Energy
Judith van de Hulsbeek
editor Climate and Energy
It has been a topic of discussion for some time now: abolishing fossil subsidies, i.e. tax benefits and exemptions for the use of natural gas, coal and oil. According to the outgoing cabinet, the fossil industry receives around 40 to more than 46 billion euros in subsidies per year. And Extinction Rebellion is campaigning to abolish these tax benefits as quickly as possible. This week the House of Representatives adopted one motion who instructs the cabinet to come up with a phase-out plan before the end of the year: which subsidies can you abolish and when?
Today the Netherlands Environmental Assessment Agency (PBL) and Central Planning Bureau (CPB) are publishing a report on exactly that question. Conclusion: it’s going to be quite a challenge. “It may seem like a no-brainer, but there are actually a lot of brain teasers,” says PBL researcher Herman Vollebergh.
According to Vollebergh, it is a ‘no-brainer’ that tax benefits for the use of fossil fuels are difficult to reconcile with ambitious climate policy. But, he and his fellow researchers write, the discussion about it is now focused too much on how much money is involved and not enough on how useful it is to abolish certain regulations.
Wrong buttons
One of the most important conclusions from the report: “Be careful not to push the wrong buttons.” Not all abolished subsidies benefit the energy transition. The report mentions the example of the reduced tax rate for large consumers of electricity. If you increase that rate significantly, electricity will become more expensive and it will become less attractive for companies to switch from natural gas to electricity.
The researchers also calculated the amount of the subsidies. They amount to 17.1 billion euros for 2021, considerably lower than the amount of 40 to 46 billion that the cabinet came up with on Budget Day. This does not mean that they think there are fewer fossil subsidies; this calculation only concerns subsidies that are directly linked to the burning of fossil fuels. In addition, there are also indirect subsidies such as the car tax exemption for vans and the exemptions for the use of oil for the production of plastic.
Which regulations should the outgoing cabinet tackle according to the researchers? It is better to focus on the electricity producer than on the consumer, says Vollebergh. “If taxes were levied for generating electricity with gas and coal, you would have more pressure to generate sustainably. And with that you provide an incentive in the right direction, helping the energy transition.”
According to the researchers, it also makes more sense to look at fossil subsidies in a different way. PBL and CPB mainly focus on emissions for which a so-called pricing deficit applies. “So where the polluter does not yet pay,” Vollenbergh explains.
These emissions that are not yet taxed actually represent a tax deficit of billions of euros. The researchers attribute this mainly to shipping and aviation, which do not yet pay taxes on their kerosene and fuel oil. But the free emission allowances for heavy industry in the European emissions trading system and the missing or low energy tax for industry also harm the climate, according to the researchers. “You have to make that a priority.”
2, 5, or 7 years?
The consultancy firms advise you to look at what agreements and regulations there are at national and European level. Excise duties on fuel for aircraft and ships can only be agreed at European level. And many emissions will be reduced via the aforementioned ETS system. Another important piece of advice, according to Vollenbergh: don’t be blinded by the energy tax. There are also a lot of other buttons that politicians can turn, such as purchase tax (bpm) and motor vehicle tax and export credit insurance.
The outgoing cabinet now has the task of indicating which subsidies can be phased out within two, five or seven years. But can the Netherlands get rid of fossil subsidies so quickly? Many companies indicate that they cannot yet become more sustainable due to the full power grid and the lack of enough green hydrogen.
This must be taken into account, says Vollebergh. “We really advocate ‘the polluter pays’, but see who can bear it. And only phase out the subsidies for companies that really cannot yet become greener.”
What are fossil subsidies? Reporter Danny Simons explains it to you in two minutes in the video below:
Fossil subsidies explained in 2 minutes
2023-10-12 05:01:22
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