European plans can make levies superfluous
450 Dutch companies are currently already paying for C02 emissions. They have to buy allowances within the European Emissions Trading System (EU ETS). A few years ago, that system seemed to be dying because there were too many rights in circulation. As a result, the effect of the system was minimal. After some adjustments, ETS now seems more effective, but still insufficient to achieve the Dutch climate goals.
Vice-President Frans Timmermans of the European Commission will officially announce on Thursday that Europe wants to bring more sectors and companies under the ETS regime. In addition, Timmermans wants to reduce the number of CO2 rights step by step. As a result, the price for CO2 emissions increases annually.
The Dutch CO2 tax will be introduced because the ETS currently provides insufficient CO2 reduction. If Timmermans has been able to implement his plans in 2024 and the ETS price is higher than the Dutch levy, the effect of the Dutch measure will disappear. “If the EU ETS price is above the tax rate, the national tax is zero euro.” This is stated in the explanatory memorandum of the bill.
The Dutch CO2 tax is exactly the ‘big stick’ as Minister Wiebes of Economic Affairs and Climate Policy wants. The levy only takes effect if companies lag behind in reducing their CO2 emissions and only has an effect if European measures lag behind. The European Commission is also working on a CO2 tax wall, which should protect European companies against unfair competition from countries outside the EU.
“Lousy example”
Greenpeace believes that with the plans presented today, the cabinet is not taking the climate problem seriously. “The government gives major polluters a license to emit more instead of less for years to come,” said director Joris Thijssen.
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