Banning coal and introducing a carbon price floor – an analysis of Dutch climate policy measures

Banning coal and introducing a carbon price floor – an analysis of Dutch climate policy measures

The Netherlands have committed themselves to reaching a low-carbon energy system that is reliable and affordable. The current coalition government is committed to reducing national CO2 emissions by 49% by 2030 compared with 1990, and plans to ban the use of coal in power generation before 2030. The Netherlands is also considering introducing a national carbon price floor (CPF).

The Dutch Ministry of Economic Affairs and Climate Policy commissioned Frontier to analyse the potential effects of these policy measures. Our study highlights:

  • A coal ban reduces CO2 emissions in the Netherlands by up to 18 million tonnes in 2030
  • This would increase to 26 million tonnes if combined with a CPF
  • Much of this would be offset as the Netherlands imports the majority of its power from countries with higher emissions intensity – at an EU level, the net reduction in emissions is only 4 million tonnes of CO2
  • Power prices would increase moderately – by €3/MWh in 2030. 

The Dutch Industry Association Energie-Nederland also commissioned Frontier for a subsequent study to analyse potential effects of the coal ban combined with a regional CPF in the Pentalateral Energy Forum, including the Benelux countries, Austria, Germany, France and Switzerland.

The extended analysis shows that, in this case:

  • CO2 emissions would decrease by 40 million tonnes in 2030 across the region, and by 19 million tonnes in the Netherlands
  • Security of supply in the Netherlands is only moderately affected, whereas a national CPF increases import dependency
  • Power prices in the Netherlands would increase by up to €7/MWh

Frontier regularly advises public and private entities on energy and climate policy.

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