This paper presents a comprehensive assessment of the policy instruments adopted by
the Netherlands to reach carbon neutrality in its manufacturing sector by 2050. The
analysis illustrates the strength of combining a strong commitment to raising carbon
prices with ambitious technology support, uncovers the pervasiveness of competitiveness
provisions, and highlights the trade-off between short-term emissions cuts and longer-term
technology shift. The Netherlands’ carbon levy sets an ambitious price trajectory
to 2030, but is tempered by extensive preferential treatment to energy-intensive users,
yielding a highly unequal carbon price across firms and sectors. The country’s technology
support focuses on the cost-effective deployment of low-carbon options, which ensures
least-cost decarbonisation in the short run but favours relatively mature technologies.
The paper offers recommendations for policy adjustments to reach the country’s carbon
neutrality objective, including the gradual removal of exemptions, enhanced support
for emerging technologies and greater visibility over future infrastructure plans.
Published on April 15, 2021
In series:OECD Science, Technology and Industry Policy Papersview more titles