“Poldering” a New Climate Agreement in the Netherlands

by Paul Sinnige and Timo Gerlagh (Netherlands Enterprise Agency) ... With a strong focus on passenger transport and recognising that transport is responsible for a quarter of all emissions, one of the main goals of the agreement is an ambition for all new passenger cars sold in the Netherlands to be emission free by 2030 at the latest. Another is to place a strong emphasis on promotion of hydrogen and electricity-powered vehicles because such vehicles produce zero tailpipe GHG emissions, helping to keep air clean and also causing less noise pollution. The government sees an important role for itself in enabling conditions that support the development of driving hydrogen-fueled and electric cars, and has already announced measures like supporting development of an electric car charging system that’s “as easy as charging your mobile phone.” The same applies to hydrogen.

Regarding existing vehicles with internal combustion engines, and realizing that heavy duty transport for shipping and
aviation will continue to depend on combustion motors, parties to the agreement concluded that there is still a need
to reduce emissions through the use of innovative biofuels. However, the European opinion against the use of biomass
feedstocks that raise indirect land use issues coupled with the Netherlands’ strong food-based agri-economy means
that there is strong opposition to increased production of biomass, which motivates an ever stronger focus on the use
of residues and wastes as feedstocks for biofuels as well as on the development of synthetic fuels from residual
renewable power. For these reasons, the parties have agreed that for achieving the renewable energy target for
transport, no additional biofuels from food and feed crops in excess of 2020 levels should be used in the Netherlands.

The government will also initiate the development of an integrated sustainability framework for all biomass types in
order to ensure a consistent approach across the different sectors in which biomass is used. However, biofuels for
transport are subject to the EU sustainability framework published in December 2018 (Renewable Energy Directive
2018/2011) and this will be the basis of the new regulation, to be implemented in all EU countries during the next 2
years. This framework will be taken into consideration in the development of the integrated sustainability framework
for the Netherlands. How is still to be discussed.

Zero emission mobility
The logistics sector and municipalities together with the Dutch government have the ambition to reduce bus, lorry and
delivery van emissions to zero in 30 to 40 of the Netherlands’ city centres by 2025. Achieving this will make a significant contribution towards reducing air pollution and improving air quality in locations where many people will directly benefit. A major future role for hydrogen is envisioned, both as an energy carrier in public transport buses and as a potential replacement fuel for diesel trains. As hydrogen is also expected to play a role as an energy carrier for all
sustainably generated energy, an additional agreement with the energy and industrial sectors will be entered into in
2020 in order to achieve the targets. It is expected that progress will accelerate, particularly in the second half of the
next decade, due to falling battery prices, an increased supply of hydrogen and stronger competition.

Renewable fuels
A large fraction of the biofuels being used in the Netherlands are produced from wastes and residues. In 2018, the
Netherlands reached a share of approximately 4.5% (excluding double counting) renewable fuels in road and rail
transport, with 72% of this production based on wastes and residues biofuels. Including double counting the obligation
for 2020 will be 16.4%, which greatly exceeds the EU’s 10% target.

Parties in the Climate Agreement consider sustainability a qualitative and quantitative condition for the use of
renewable fuels to achieve the European target for renewable energy in transport. To guarantee the sustainability of
renewable fuels to be used, the Netherlands will follow the sustainability requirements of the EU’s new Renewable
Energy Directive (RED II, Article 29). This includes the European Commission’s criteria on avoiding use of feedstocks
posing a high risk of indirect land use change (ILUC). In a broader context, the Dutch government will develop an
integrated sustainability framework for all biomass, ensuring a consistent framework across the various sectors where
biomass is used, with special attention paid to assurance, feasibility and enforceability. This framework is expected to
become available in 2020.

The implementation process for RED II is underway and must be completed before July 1, 2021. In order to achieve the
Climate Agreement’s objectives, 60 PJ of renewable fuels, including biofuels will be part of the Dutch fuel mix for road
transport. Further use of electricity and hydrogen in transport will be supported by other measures. This means that
by 2030, 60 PJ of renewable fuels will be part of the Dutch fuel mix for road transport. On top of this, renewable fuels
for the inland shipping sector will add another 5 PJ. The Climate Agreement is based on emission reduction measures
and the increased use of renewable fuels will contribute about 2 Mton of CO2 / GHG emissions reduction.

To ensure the targets are met, parties to the Climate Agreement have agreed to support the additional use of
renewable fuels in the Dutch transport system by increasing obligations for renewable energy in transport beyond what
is already being used to meet the current RED obligation. The new legislation needed for this will also include provisions for how CO2 emissions will be controlled along the renewable fuel supply chain. The integral sustainability framework to be developed for biomass feedstocks will determine how CO2 emissions caused by ILUC will be included when calculating the CO2 emissions across the biomass / biofuels supply chain.

Besides enlarging the renewable fuels obligation, parties are exploring the possibility of introducing a Green Truck Fuel. A pre-condition for this is that projected CO2 reductions will actually be achieved, and that the fuel meets the
sustainability framework’s sustainability requirements.

Support
To support this transition, the government has budgeted 200 million euros to increase innovation on sustainable
production of advanced biofuels and renewable synthetic fuels in the Netherlands. The central government is currently
assessing which policy instruments will be most suitable for this, and will not use these funds until 2020.

Feedstock
It is important to note that a significant amount of current production is based on using Used Cooking Oil and animal
fat feedstocks, feedstock categories that are limited under the RED II to a maximum share of 1.7% of final consumption.

Parties to the Climate Agreement have agreed that no additional biofuels produced from food and feed crop feedstocks
will be used (beyond the level used in 2020) to achieve the renewable energy target for transport. One may conclude
that the Netherlands has set has a large ambition to find other waste and residue feedstocks to enable increased
production of advanced renewable biofuels, together with the development of renewable fuels of non-biological origin
as well as recycled carbon-based fuels. This is consistent with the government's objective to use biomass as much as
possible and to further develop the circular economy programme that was launched in September 2016. READ MORE