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The Netherlands 2020 Energy Policy Review INTERNATIONAL ENERGY AGENCY

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The Netherlands 2020 Energy Policy Review INTERNATIONAL ENERGY AGENCY The Netherlands 2020 Energy Policy Review INTERNATIONAL ENERGY AGENCY The IEA examines IEA member IEA association the full spectrum countries: countries: of energy issues including oil, gas Australia Brazil and coal supply and Austria China demand, renewable Belgium India energy technologies, Canada Indonesia electricity markets, Czech Republic Morocco energy efficiency, Denmark Singapore access to energy, Estonia South Africa demand side Finland Thailand management and France much more. Through Germany its work, the IEA Greece advocates policies Hungary that will enhance Ireland the reliability, Italy affordability and Japan sustainability of Korea energy in its 30 Luxembourg member countries, Mexico 8 association Netherlands countries and New Zealand beyond. Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States The European Union, represented by the European Commission, also participates in the work of the IEA. Please note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/t&c/ Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org IEA. All rights reserved. Foreword The International Energy Agency (IEA) has conducted in-depth reviews of the energy policies of its member countries since 1976. This process supports energy policy development and encourages the exchange of international best practices. By seeing what has worked – or not – in the “real world”, these reviews help identify policies that deliver concrete results. Since 2017, the IEA has modernised the reviews by focusing on the key challenges in today’s rapidly changing energy markets. FOREWORD As one of the founding members of the IEA, the Netherlands has a long and deep history with the Agency. I greatly appreciate the support of the Netherlands for our work in numerous areas, including participation in the IEA Technology Collaboration Programmes, Clean Energy Transitions Programme, and the Clean Energy Ministerial. I also thank the Netherlands for its longstanding co-operation and support for the IEA’s work on energy access in Africa. The Netherlands is aiming for a rapid transition to a carbon-neutral economy that underpins economic growth and energy security. To drive this transition, the Netherlands has a strong commitment to cutting greenhouse gas emissions. It aims to reduce emissions by 49% by 2030 and by 95% by 2050 – compared with 1990 levels. Its 2019 Climate Agreement defines policies and measures to support the achievement of these targets and was developed through a collaborative process involving parties from across Dutch society. The Netherlands has made notable progress in its transition to a carbon-neutral economy. Thanks to increasing energy efficiency, energy demand shows signs of decoupling from economic growth. The share of energy from renewable sources doubled from 2008 to 2019, with especially strong growth in recent years in offshore wind and rooftop solar. However, the Netherlands remains heavily reliant on fossil fuels and has a concentration of energy- and emission-intensive industries that will not be easy to decarbonise. The government should closely monitor the results of recent policies focused on reducing emissions and be ready to make adjustments as needed to keep the country on a path to carbon neutrality. The Netherlands is a key player in European energy markets and beyond. It is an important transit and trade hub for natural gas, oil and electricity – and has a large oil- refining and chemical industry. The Netherlands aims to maintain its role as an energy hub while transitioning to a carbon-neutral economy by exporting renewable electricity and supporting the development of a robust market for low-carbon hydrogen. The government has adopted a Hydrogen Strategy to boost the production and use of low- carbon hydrogen and is supporting carbon capture and storage to lower industrial emissions. The Netherlands responded quickly to the immediate economic impacts of the Covid-19 pandemic with generous support to people and industry while also keeping on a path to carbon neutrality. For instance, in line with recommendations from this report, the government introduced subsidies for electric vehicles in June 2020. reserved. rights 3 All IEA. FOREWORD It is my hope that this in-depth review will help the Netherlands accelerate its transition to a carbon-neutral economy. The IEA is committed to helping the government achieve its goals of rapidly reducing emissions while maintaining a secure and affordable energy supply. Dr. Fatih Birol Executive Director International Energy Agency reserved. rights 4 All IEA. TABLE OF CONTENTS ENERGY INSIGHTS 1. Executive summary .................................................................................................. 11 Overview ......................................................................................................................... 11 Energy supply, demand and trade .................................................................................. 12 Energy sector targets and policy ..................................................................................... 13 Low-carbon gas transition ............................................................................................... 14 Flexible energy systems ................................................................................................. 15 Fossil fuel subsidy review ............................................................................................... 15 Key recommendations .................................................................................................... 16 2. General energy policy .............................................................................................. 17 TABLECONTENTS OF Country overview ............................................................................................................ 17 Supply and demand ........................................................................................................ 20 Institutions ....................................................................................................................... 24 Energy sector targets and policy ..................................................................................... 26 Supporting measures ...................................................................................................... 29 Energy taxation ............................................................................................................... 32 Fossil fuel subsidy review (focus area) ........................................................................... 33 Digitalisation (focus area) ............................................................................................... 35 Assessment .................................................................................................................... 37 Recommendations .......................................................................................................... 39 ENERGY SYSTEM TRANSFORMATION 3. Energy and climate change ..................................................................................... 41 Overview ......................................................................................................................... 41 Energy-related CO2 emissions ........................................................................................ 42 CO2 emission drivers and carbon intensity ..................................................................... 43 Institutions ....................................................................................................................... 45 Targets and Policy .......................................................................................................... 45 Emission reduction measures ......................................................................................... 48 Climate adaptation and resilience ................................................................................... 51 Climate assessment........................................................................................................ 52 Climate Recommendations ............................................................................................. 55 Carbon capture utilisation and storage ........................................................................... 56 Carbon capture utilisation and storage assessment ....................................................... 59 reserved. rights 5 All IEA. TABLE OF CONTENTS Carbon capture utilisation and storage recommendations .............................................. 61 4. Energy efficiency ...................................................................................................... 63 Overview ......................................................................................................................... 63 Energy consumption by sector ........................................................................................ 65 Institutions ....................................................................................................................... 74 Targets ............................................................................................................................ 75 Policy and support measures .........................................................................................
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