Increased cooperation for reduced emissions in the Netherlands

Until 2030, the Netherlands aims to reduce its greenhouse gas emissions by 49% as compared to 1990 levels. How to achieve this is proposed in the National Climate Agreement. More than a hundred Dutch stakeholders have been involved in creating the proposals in the agreement, representing both government and businesses as well as NGOs. The consultations took place within five sector platforms: Built environment, Mobility, Industry, Agriculture and land use and Electricity and covered issues that affect multiple sectors innovation, labour, finance, and spatial planning.

Each sector platform was assigned a sector-specific target for the reduction of greenhouse gases until 2030. In total, this adds up to 48.7 million tons of CO2-equivalents. For the built environment sector, it means that roughly 1.5 million existing homes and 1 million utility buildings will have to be made more sustainable by 2030. A large number of commitments have been set or are being announced to make this possible.

Emissions reduction in the sector Built environment

The built environment sector has an emissions reduction target for 2030 of 3.4 Mt. The main focus is to increase the pace of sustainability efforts to over 50,000 existing homes per year by 2021, a number that should be accelerated to 200,000 homes per year by 2030.

A structured approach has been selected, tackling one district at a time. The municipalities play a crucial role by drawing up a transition vision for heat in consultation with stakeholders and end-users by the end of 2021. In this, they will establish the timetable for a step-by-step approach to phasing out natural gas. The potential alternative energy infrastructures (all-electric, heat, green or possibly hydrogen gas in the future) will be set out for districts planned for the transition ahead of 2030. combined with this, municipal authorities will provide insight into the social costs and benefits and the integral costs for the end-users.

Local conditions to be taken into consideration

The preferred solutions may vary from one district to another. If the area has been densely developed, contains many high-rise buildings or has homes that were built before 1995, then a district heating grid could be the most suitable solution. If the area contains new homes set out in a spacious district, then an all-electric solution may be better. For many districts, the natural gas network will remain in place beyond 2030 and may even be used for green gas. Insulating and burning less gas, sustainable or otherwise, with a boiler in combination with a hybrid heat pump might offer a sensible temporary solution.

However, the condition of the homes is not the only relevant factor; the wishes of the residents in the district, other than energy supply, will equally determine the pace and the outcome. Housing associations also play an important role to make their homes more sustainable, and to connect them to a different heating supply than natural gas in the years to come, under the condition that the monthly costs for rent and energy bills do not rise.

A large number of commitments are required to enable all of this. And many commitments have already been made:

• How significant cost reductions can be achieved with the construction of heating grids, the fitting of insulation solutions, or the installation of heat pumps.
• An amendment of the energy tax, which would involve lower taxation of electricity and higher taxation of natural gas.
• Commitments regarding more renewable heating from the ground beneath our feet, or from the large bodies of surface water in the Netherlands.
• Commitments regarding an opportunity for all home buyers to insulate their homes, if renovation work anyway is taking place, with attractive loan conditions.

These commitments have been laid down in the Climate Agreement. They form an integrated approach between the sectors, to achieve the 2030 target, and to realise the vision for 2050.

The built environment sector platform has proposed a phased and pragmatic approach that, on the one hand, will seek to achieve a good head-start and, on the other, will develop the conditions and requirements for the scale-up and roll-out of measures for the future. With regard to homes, an approach of incentivisation and district-oriented management has been opted for. At an individual level, building owners can also be offered incentives to make their properties more sustainable. This approach will be successful if the sustainability efforts can be recouped through tenants’ lower energy bills.

Development, commitment and innovation is needed

Numerous innovations and significant cost savings will be required in order to fund these investments and make them affordable by means of energy savings and cost reduction. To this end, Test Beds for Natural Gas-Free Districts (Proeftuinen Aardgasvrije Wijken) and an innovation programme have been launched. The test beds will allow systematic experimenting, learning, and to move forward with cost-effective up-scaling and implementation beyond the current government’s term of office.

The development of heating devices that do not use gas (or do so to a lower extent) is in full swing. A Multiyear Mission-Driven Innovation Programme (MMIP) focuses on technical and socio-economic innovation for the rapid growth of sustainable heating systems. The objective is partly to improve existing types of devices and systems, available within 5 years, and partly to develop new concepts and corresponding services, taking more than 5 years to develop. Further, this programme is intended to promote user interest and enthusiasm regarding scope, comfort (noise, thermal), integration capacity and affordability (housing costs).

The innovations will primarily be focused on applicability in existing inhabited situations, a lower overall cost at the systems level, and acceleration towards natural gas-free solutions. Providing access to new sustainable heating and cooling sources and thermal storage is required to meet the sharply growing demand for sustainable heat.

A large number of commitments are required to make this possible. The following mix of pricing and subsidy instruments have already been set or are being announced:

• Sustainable energy investment subsidy scheme (ISDE) for small-scale heat pumps, 100 million euros/year;
• Landlord charge, 100 million euros/year discount;
• Energy Investment Allowance for landlords, 50 million euros/year from 2020 to 2023;
• The neighbourhood approach and the renovation accelerator from the climate budget funds, 100 million euros/year up to 2021 and 70 million euros/year from 2020, respectively;
• Non-revolving heat fund for private property owners, 50 to 80 million euros/year;
• Multi-year Mission-driven Innovation Programme (built environment), > 40 million euros;
• Changes will be made to the energy tax to provide a stronger incentive to improve sustainability, by ensuring that investments in sustainability are recouped within a shorter time period. The government has opted for the budget-neutral version, which will see the energy tax rate for the first bracket for natural gas increase by 4 cents per m3 in 2020 and +1 cent per m3 during the following six years. Households benefit more from this change than businesses.
• 300 000 euro - Green deal education installers heat pumps (education centres).

External links:

1. The climate policy of the Netherlands
2. National Climate Agreement (The Netherlands)
3. Test Beds for Natural Gas-Free Districts (Proeftuinen Aardgasvrije Wijken)