Energy Agreement reached: Gas price hike, electricity cheaper, burdens more evenly split

After months of negotiations, the coalition parties VVD, CDA, D66 and ChristenUnie finally agreed on a Climate Agreement. The main changes to the draft agreement is that the government decided to balance the burdens more evenly between individuals and businesses by shifting the climate tax from citizens to companies and adjusting the energy tax, NOS reports.

While the Climate Agreement will only officially be presented on Friday, a number of the main lines are already known. Gas prices will increase, but the price for electricity is decreasing and there will be a discount on energy tax for households to compensate for this. Research will be launched into road pricing, also known as the kilometer tax. Electric cars will be less subsidized than originally plan. And substantial investments will be made to make agriculture more sustainable. 

According to the broadcaster's sources, the measures in the Climate Agreement are enough to achieve the Netherlands goal of a 49 percent reduction in greenhouse gas emissions in 2030 compared to 1990. The draft agreement would not have achieved this goal. 

Here follows a summary Climate Agreement measures that is already known, compiled by NOS.

Gas will become significantly more expensive in the coming years. The tax on gas will increase by 10 cents per cubic meter of gas. For the average household this translates to 150 euros more spent on gas per year. The government will compensate for these costs by reducing electricity prices and giving households a larger exemption for energy tax. The business community will also contribute more to the Sustainable Energy Storage, so that the costs for consumers are lower. 

An investigation will be launched into road pricing. The government established a committee to investigate three options. The first is to impose a tax per kilometer driven only for electric cars, which currently pay no road tax and no excise duty. The second is road pricing for all cars. And the third form includes a rush-hour tax for all cars. The intention is that the next government will decide which form of road pricing to introduce.

The government still wants to promote electric driving, but with less subsidy than initially stated. The original plan of 6 thousand euros subsidy in 2021 was scrapped. The subsidy is expected to be reduced by half, and will also be reviewed every year to prevent over-subsidization, according to NOS. To make sure that people who are not yet driving electric cars are not charged too much, the planned excise tax increase for petrol has been scrapped.

Polluting industries will pay more for the CO2 emissions of their industries in the coming years. From 2021 a tax will be implemented for companies that emit too much CO2. In that year the tax will be 30 euros per ton of CO2 over the limit, and it will eventually increase to 150 euros per ton. 

The government is allocating between 50 million and 80 million euros per year to a heat fund from which private individuals can invest in sustainable forms of heating, like insulation, heat pumps and hybrid heaters. 

Agriculture must become more sustainable. An expected amount of nearly 1 billion euros will be reserved until 2030 for making the agricultural and horticultural sector greener. Part of this amount is intended for farmers in the peat meadow areas who want to stop or relocate their farms. Drought is causing subsidence in these areas. And quick action is needed because when peat dries out, greenhouse gasses are released. The intention is also to invest 60 million euros into a stop regulation for pig farmers. They can sign up for this regulation from August. Farmers in areas with stench problems, like Noord-Brabant, will get priority. The government expects that these plans will almost double the CO2 reduction in the agricultural sector from 3.5 to 6 megatons.