Energy tax fears dog Dutch chemical firms

"Very real" possibility that new government will introduce industrial energy tax, says association chief

Dutch chemical firms have made a plea to the country's new government not to ask them to do more to cut their carbon dioxide emissions to meet climate change targets. "The maximum possible ceiling has been reached," according to a statement accompanying the latest annual report of the Association of the Dutch Chemical Industry (VNCI).

The VNCI expresses "considerable anxiety" about the deal "so proudly" reached by environment minister Margaretha de Boer and other EU ministers in Kyoto last December to cut EU greenhouse gas emissions by 8% by 2008-2012. Documents obtained by the VNCI suggest that the Netherlands is being asked to stick to a political commitment made last year to cut its emissions by 10% as a contribution to the overall EU target.

According to the VNCI's Managing Director, Peter Noordervliet, even assuming a low rate of economic growth of around 2% per year, this would mean that the industry would effectively have to halve its carbon dioxide emissions compared with levels forecast in the 2008 to 2012 period under a business as usual scenario.

Pointing out that the industry has cut its emissions by 15% per unit of output since 1986 and is committed to achieve a 20% reduction by 2000, he said any further improvement would be "almost impossible". The association is concerned that the government may impose emission ceilings on the sector or introduce an energy tax.

Mr Noordervliet told ENDS Daily today that there was a "very real possibility" that a deal would be done in the near future between political parties to introduce an industrial energy tax. Following the Dutch general election on 6 May, parties are now negotiating a manifesto for a new coalition government, as well as deciding on cabinet members. Prime Minister Wim Kok pledged these would be announced within six weeks of the election.

Both right and left-wing political parties have said that they approve of energy taxation. "The question [to be negotiated] is whether this should [continue to] apply only to small businesses or to larger industrial companies too," said Mr Noordervliet. An industrial energy tax without similar levies for major industrial competitors in other countries, will have "major consequences for the position and the future of the chemical industry in the Netherlands," says the VNCI's report.

The VNCI is lobbying political parties to accept that instead of imposing further constraints on Dutch industry, the government should instead "tackle the policy shortfall" through measures such as joint implementation projects with partners in other countries, international emissions trading and further use of sustainable energy.

Follow Up:
VNCI, tel: +31 70 337 8733.

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