Fossil fuel schemes cost The Netherlands €37.5 billion


The Netherlands – In a striking revelation, a research report from SOMO (Research Foundation for Multinational Enterprises), Oil Change International, and Milieudefensie uncovers the staggering economic toll of schemes favoring fossil fuels on the Dutch government. The annual loss in revenue amounts to a staggering 37.5 billion euros, setting off alarm bells among researchers and environmental advocates.

The report, released on Monday, dissects 31 schemes that systematically favor fossil fuels, largely through tax discounts and exemptions.

31 schemes

These schemes encompass a web of incentives, from excise duty exemptions for aviation and shipping to tax benefits enjoyed by oil refineries, coal-fired power plants, and the steel industry. The most substantial dent, €13.5 billion annually, is created by the energy tax, which degresses in the Netherlands. Essentially, this means that companies using more energy pay proportionally less tax on their consumption – a counterintuitive practice that the researchers deem a “perverse incentive.”

Here’s the kicker: heavy industry giants, despite consuming nearly three-quarters of ‘business’ natural gas, contribute a mere 11 percent to the energy tax collected from companies.

Calls for action

The research findings have prompted a resounding call for the Netherlands to rapidly phase out these fossil fuel benefits. The funds reclaimed could be earmarked for crucial initiatives like combating energy poverty through home insulation. Notably, some of this money won’t even return to the government’s tax coffers, as companies are expected to “replace or reduce their fossil fuel consumption.” This, the researchers argue, aligns perfectly with the goal of reducing CO2 emissions. In fact, fully abolishing these subsidies could result in slashing emissions by between 13 and nearly 20 percent, contingent on the speed of implementation.