Netherlands still pushing €8 billion into fossil fuel industry annually: Environmental organizations

The Netherlands is still providing over 8 billion euros in state aid to the fossil fuel sector every year, according to the report Past time for Action: Subsidies and Public Finance for Fossil Fuels in the Netherlands by Milieudefensie and Oil Change International. According to the the organizations, this is at odds with a promise made in 2013 that this aid would by phased out by 2020, NOS reports.

"At the moment the whole of the Netherlands is almost entirely dependent on fossil fuels," the organizations said. "That is why every euro from the government that still goes to fossil fuels is incomprehensible. And counterproductive. Because in this way we remain in the economy of the past and stand in the way of sustainable solutions."

In the 2015 Paris Climate Agreement, it was agreed that all government financial flows should be aligned with the climate goals. According to Milieudefensie, this means that all aid to the fossil fuel industry must be cut back. The Netherlands also promised this two years earlier in a European context, the environmental organization said.

The over 8 billion euros in state aid to the fossil fuel industry listed in the report includes direct subsidies, but also tax advantages and price support. The largest part, almost 5 billion euros per year, goes to aviation and shipping, industry, power plants and agriculture.

42 percent of the total amount is for the aviation sector - airlines receive billions of euros in benefits. And this excludes coronavirus support. There is no VAT on kerosene, which means there is no tax on airline tickets. Because there is VAT on all other forms of transport, this leads to an uneven playing field, the environmental organizations said. "It is absurd that you pay more VAT for your tram ticket than for a plane ticket to Bali."

According to the organizations, the government also indirectly supports fossil energy projects abroad. For example, Dutch companies receive government support for building refineries in Oman and oil platforms in Mexico. "The Netherlands exports the climate crisis through our fossil support," they said. "Poor countries in particular become more dependent on oil and gas." And it is the people in these countries that are hit hardest by the climate crisis. 

The industry also enjoys major tax advantages. "The big polluters from heavy industry receive millions in tax benefits, which are coughed up by households and small entrepreneurs," Milieudefensie director Donald Pols said.

In a response to NOS, the Ministry of Economic Affairs and Climate said that it doesn't recognize the amount of 8 billion euros. It does, however, acknowledge that there are favorable schemes for fossil fuel companies. "The cabinet is busy further mapping out regulations that could affect the use of fossil fuels and will send an extensive letter to parliament after the summer," the Ministry said.