In their latest Coalition Agreement, the Dutch government announced new and more ambitious climate goals, which include reaching at least 55% GHG emission reduction in 2030. In 2023, various fiscal climate policies will be launched to contribute to these new targets, including a more stringent CO2 levy for industry and various reforms with regards to energy taxation (‘de energiebelasting en de Opslag Duurzame Energie- en Klimaattransitie’). The Dutch Ministry of Finance asked Trinomics to conduct an impact assessment on these measures to gain insights on the potential economic and climate effects. In addition, the Ministry also asked us to assess the impact of the increased gas and electricity prices.

We estimated the effects on overall business costs, energy costs, energy tax payments and GHG emissions in various Dutch sectors, covering industry, SMEs, services, health and education. For industrial sectors, we used a bottom-up approach based on economic and energy data at installation level to assess the economic effects as well as unlocked investments in GHG-emission reduction. For non-industrial sectors, we used sector level data (at tax bracket level) and elasticities to estimate the impact of the fiscal changes and increased energy prices.

We found that:
– The impact of the increased energy prices outweighs the impact of the fiscal policy measures; an additional reduction of 1.1 Mton CO2 is expected in 2030 due to higher energy prices.
– The joint impact of the fiscal policy measures is an additional emission reduction of 0.2-0.4 Mton CO2 in 2030 (varying due to different options for energy taxation)
– The economic impacts differ per sector and company. Due to the tax shift from electricity to gas, sectors with relatively high gas consumption are expected to face higher costs in 2030. Due to the higher tax rates for the largest energy consumers, sectors with relatively high energy consumption are also expected to face higher costs in 2030.