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Dutch Government: Only EVs and Hydrogen Cars from 2035, Phase-Out Natural Gas

Tesla assembly factory in Tilburg the Netherlands

Tesla assembly factory in Tilburg, the Netherlands

The Dutch government has presented a long-term energy plan that stipulates that no new cars with combustion engines may be sold from 2035 on. In addition, in the Netherlands – for over 50 years the largest natural gas producer in the EU – all houses will be disconnected from the gas grid by 2050. The plan has broad parliamentary support – in fact, many political parties believe it does not go far enough.

Perhaps the most striking part of the “energy agenda” presented by Dutch Minister of Economic Affairs Henk Kamp on Wednesday 7 December (see here for more information in Dutch) is that it received such a critical response from both green NGOs and left-leaning parties in Parliament. They complained that it is not ambitious enough.

More neutral observers may feel differently. With this plan, the Netherlands – home country of Shell, one of the largest oil and gas companies in the world – may be one of the first countries in the world to put a specific date to the end of the combustion engine car. The “agenda” states that from 2035 on all cars sold should be zero-emission, i.e. either electric or hydrogen-driven.

A majority in the Dutch Parliament had earlier asked for 2025 as a starting date for this transport revolution, but according to Kamp – a Minister for the right-wing VVD, which is part of a coalition government with the Dutch Labour party PvdA – this is too early.

Gas grid

Another revolution is to take place in the built environment. Newly built houses will not be connected to the gas grid anymore, according to the plan. Existing houses will be gradually disconnected from the gas grid. By 2050 houses will not use gas at all anymore. They will be heated in part with waste heat from industrial processes as well as geothermal sources. A new infrastructure for waste heat distribution will be built for this. Local governments are assigned a leading role in this transition process.

For the Netherlands the change will be huge. Since the early 1960s, the country has been the largest natural gas producer in the EU and a major gas exporter. It probably has the most extensive gas distribution infrastructure in the world. Virtually all houses are connected to the gas grid – indeed, they must be, according to the law.

The energy-intensive industry will not be able to do entirely without gas, says Kamp. For this reason, the Netherlands will pursue possibilities for carbon capture and storage (CCS).

CO2-driven

The  “energy agenda” comes with a cost-benefit analysis prepared by McKinsey (English version here). This concludes that: “Reducing the energy system’s CO2 emissions while accommodating a 37 percent increase in the demand for electric power represents a major challenge. We have modeled one way of meeting this challenge: by increasing the system’s renewable power generation capacity to 80 percent and introducing flexibility measures, such as demand-side management and energy storage. All in all this would lower (energetic) CO2 emissions by about 55 percent. These changes will require capital and operational expenditures of approx. EUR 10 billion per year. This amounts to some EUR 2.5 billion more than for a fossil-fuel-reliant system.”

The new Dutch “energy agenda” says that European energy and climate policy should be CO2-driven. Targets for energy efficiency and renewable energy should be secondary to CO2 reduction targets. The EU Emission Trading System is “in principle a good instrument” to reduce CO2 emissions, says the plan, although the Dutch government acknowledges that CO2 prices in the EU ETS are “too low” and will likely remain  so for some time to come. The Netherlands wants to reinforce the ETS by an annual reduction of the emission cap and reducing the surplus of allowances in the system.

The energy agenda nevertheless promises continued support for renewable energy and energy efficiency. In particular, it wants to continue the “large scale expansion” of offshore wind in the North Sea after the current stimulus plan – which runs till 2023 – ends.

However, it does not include any plans to close existing coal-power stations, which has been demanded by NGO’s and left-leaning parties.

Dutch energy and climate policy is currently driven by a broadly based “energy accord”, which was signed in September 2013 by the government with forty organisations, including NGO’s and industry associations, and which runs until 2023. The new “energy agenda” is intended as a long-term perspective for the period after 2023.

The only party to have reacted negatively to the green ambitions of the Dutch government is the nationalist right-wing party of Geert Wilders, the PVV. A spokesman for the PVV has said the plan is “simply insane”, because it will cost too much. The PVV wants to see construction of thorium-based nuclear power stations.

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This article was amended on 14 December to correct the earlier assertion that the costs calculated by McKinsey pertained only to the switch from gas to waste heat infrastructure. The current version of the article refers directly to McKinsey’s cost estimate.

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