Dutch €28 billion climate plan subsidizes new EVs less and second-hand more

On Wednesday, the Dutch government unveiled a €28 billion climate plan to reduce CO2 emissions by 55% (or even 60%) by 2030. The plan includes 120 different proposals. For example, in the car sector, new EVs will lose part of their subsidies; second-hand EVs, on the contrary, will get €600 million in subsidies, while €90 million goes to increasing the charging infrastructure.

“Our country, landscape, and economy will inevitably change,” says Rob Jetten, the Dutch Climate and Energy Minister. “We want to have a carbon-neutral economy by 2050. To realize this, we must eliminate fossil energies and reduce our CO2 emissions.”

Among the 120 measures are closing all power plants using gas or coal and €65 million for financing research on smaller nuclear plants of a new design. The Netherlands has already decided to build two additional nuclear power plants near the Belgian border before 2035.

“By investing a lot in creating our own renewable energy sources, we will be less dependent on fossil energies coming from suspicious regimes,” adds Jetten. “Guys like Putin will no longer blackmail us,” he concludes. The plan implies an extra reduction of 22 megatons of CO2 to reach a 55% reduction (compared to 1990) in CO2 by 2030.

CO2 taxes for the industry remain, and from 2027 onward, plastics must consist of at least 25 to 30% recycled material or bio-material. The taxes on using oil or gas will also be raised, and households get two gas tariffs: a low consumption gets reduced taxation, and a higher consumption sees taxes increased. Hydrogen gets lower taxation to make it more attractive than gas.

Subsidizing EVs

The plan also foresees €600 million for subsidizing EVs, but that money is primarily intended to boost the second-hand market for EVs. The subsidy for a new EV is even lowered from €2000 to €1000 per car.

“Electric cars are getting cheaper, and we keep our finger on the pulse,” explains Minister Jetten. “More EV models are reaching the market. So we ask people who can afford it somewhat more, and what we earn by doing so will be distributed subsidizing the cheaper second-hand cars.”

The buying tax (BPM) for all cars (also EVs) will be increased by €200, and car users will see the cost of gasoline or diesel get slightly higher because of the obligation to mix it more with biofuels. The plan to force leasing companies to electrify their entire car park by 2025 has been abandoned. Instead, companies will be forced to reduce the CO2 emissions of business trips, for example, by stimulating their employees to take the train.

Criticism

Car branch organization BOVAG is disappointed about the plan. “This plan is presented as good for the climate, but in reality, fewer people will be inclined to change their old car, with negative consequences for a greener car park,” says BOVAG. “The government is also increasing the BPM taxation once again, also for EVs, while it should be abolished here because EVs don’t emit CO2.” The CO2 emissions are the calculation base for the BPM.

BOVAG also states that subsidizing new EVs remains necessary to create a mature market for second-hand EVs asap. “It’s important that as many people as possible make the energy transition soon,” says BOVAG president Han ten Broeke. “By not doing so, one endangers  the creation of broad support for the transition and accompanying climate measures.”

The durable energy sector is more optimistic: “The government takes a lot of interesting measures, and they are very welcome,” says Marc Londo of the Dutch Association for Renewable Energy (NVDE). “At the same time, the cabinet is still too hesitant when considering housing and company car regulations. A combination of rules and subsidies would also be very effective.”