Securing a Enduring Future: Teh Dutch Government’s Bold Initiatives

In a decisive move to bolster its economy, enhance energy security, and champion environmental sustainability, the Dutch Council of Ministers has approved a extensive package of measures proposed by Minister Hermans (Climate and Green growth). This initiative aims to create a robust, clean, and resilient Netherlands, directly addressing vulnerabilities exposed by recent geopolitical events and persistent bottlenecks in the energy transition.

Key Pillars of the Green Transition Strategy

The government’s strategy rests on several key pillars designed to accelerate the transition to a sustainable economy:

• Reducing Electricity Costs for Industry: Acknowledging the energy-intensive nature of many industries, the plan includes measures to alleviate the financial burden of electricity costs, ensuring competitiveness on the global stage.
• Enhancing Sustainability Conditions with CO₂ Capture and Storage (CCS): The plan focuses on improving the framework for sustainable industrial practices, notably through the implementation of CO₂ capture and storage technologies.
• Accelerating Power Grid Expansion: Recognizing the critical need for a modern and efficient energy infrastructure, the government is prioritizing the removal of bottlenecks and the rapid expansion of the power grid.
• Exploring Lower energy Rates: The cabinet is actively exploring opportunities to reduce net energy rates for consumers, making sustainable energy more accessible and affordable.
• Extending Sustainable Energy Subsidies: The SDE++ incentive scheme,which supports sustainable energy production,will be extended beyond 2026,providing long-term financial support for green initiatives.

Streamlining Grid Expansion: Overcoming Infrastructure Challenges

A critical component of the plan involves expediting the expansion of the power grid to facilitate the transition to domestic energy sources and accommodate the increasing demand from new housing developments. minister Hermans, in collaboration with national network operator TenneT, is implementing a series of measures to accelerate grid expansion.These include increased oversight of the 25 most critical high-voltage projects, regulatory adjustments to shorten approval processes, and strategic investments in municipalities where significant infrastructure advancement is concentrated.TenneT will also refine its project management methodologies to further accelerate project timelines.

Supporting Industry’s Green transformation

recognizing the vital role of Dutch industry in driving economic prosperity,the government is committed to supporting its transition to sustainable practices. Measures include extending indirect cost compensation for three years to mitigate high electricity costs and maintain a level playing field with international competitors. This is particularly relevant as industries face increasing pressure to reduce their carbon footprint and adopt cleaner technologies. For example, the steel industry, a major employer in the Netherlands, is exploring hydrogen-based production methods to reduce its reliance on fossil fuels.

To further incentivize sustainable investments, the government will provide companies with additional time to comply with the CO₂ tax.While maintaining a long-term commitment to carbon reduction, the cabinet is open to exploring alternative approaches and engaging in discussions with industry stakeholders. The overarching goal remains achieving climate neutrality by 2050, aligning with the European Union’s ambitious climate targets.

Significant investments are being made in carbon capture and storage (CCS) projects, such as the Aramis project, to enable industries to reduce greenhouse gas emissions.The government aims to make an investment decision in 2026, with the goal of commencing underground CO₂ storage by 2030. To mitigate financial risks, the government has allocated €639 million to EBN, a state-owned entity, to participate in infrastructure and storage projects.

Furthermore, the government is reassessing its policies regarding the transition to circular plastics, seeking more effective alternatives to the current plastic standard and levy. In the hydrogen sector, the government is providing long-term clarity to both producers and consumers, allocating €2.1 billion to stimulate hydrogen production and €662 million to promote its application in industry. A relatively low mandatory renewable hydrogen quota of 4% will be implemented to ensure affordability for consumers. The refining route for green hydrogen will also be adjusted to encourage its use in fuel production.

Incentivizing Sustainable Practices: SDE++ and Beyond

to further encourage companies to adopt sustainable practices, the Sustainable Energy Production and Climate Transition (SDE++) incentive scheme will be reopened in 2026 with a budget of €8 billion. The government is also actively developing policies to promote the adoption of green gas and accelerate the transition to a CO₂-free electricity sector.

Extending Sustainability to Mobility and the Built Habitat

The government is also implementing measures to promote sustainability in the mobility sector and the built environment. For example, efforts are being made to make electric vehicles more accessible and affordable. Standardization in the buisness leasing market will reduce costs for employers who choose electric cars.

Minister Hermans: With this package, we are taking concrete steps to ensure that our country becomes strong and more autonomous. Our country becomes strong when we are on our own feet, with energy up close, a strong economy, and a strong industry. To achieve this, I focus on creating the right preconditions and the removal of bottlenecks. I am committed to implementing measures that are executable and achievable, ensuring that we can work together to build a sustainable future.

Minister Hermans (Climate and Green Growth)