Sustainability advisor: higher CO2 levies could result in companies leaving the country

The plan to raise the carbon levy for large polluting companies is unwise and could scare companies from investing in sustainability. Carolien Gehrels leads a committee advising politicians on how to approach tailor-made agreements.

"I worry about that. This is not the time. It does not help and will scare away companies," she told MPs in the lower house of Dutch parliament, the Tweede Kamer, on Wednesday. She said she sees a risk of companies choosing to invest their money in other countries as a result.

The commission that Gehrels chairs specifically advises on agreements the government wants to make with large companies to improve their sustainability sooner than planned. This pertains to companies like Tata Steel, Shell, and Yara.

The outgoing Cabinet wants to raise the levies on a part of the CO2 emissions from 2028 to push companies to make their businesses more environmentally friendly sooner. Gehrels said that the large companies need more time to change. "The government should not keep changing the rules. Otherwise, companies will invest elsewhere."

Gehrels, who was previously an alderman in Amsterdam from the left-wing PvdA, claims that the Netherlands is in danger of missing opportunities for quicker sustainability due to customization.

Tata Steel CEO Hans van den Berg, who was also present at the meeting, said that a higher CO2 levy has a "negative effect on the earning capacity" of the steel factory. "And we need that money to make our company more sustainable."

Loek Radix, a director for the Limburg industrial complex Chemelot, also warned the politicians in The Hague. He thinks there are missteps in the politicians' decisions that could prove fatal for big companies.

Gehrels emphasized that many investment decisions are made in headquarters abroad. Worldwide, there is "a race for green investment," she said. The Netherlands has a "great chance to be a forerunner in that," but consistent policies will be needed.

BBB politician Henk Vermeer agreed with Gehrels. He does not want new levies in which "we earn millions but flush away billions."

Joris Thijssen (PvdA-GL) wondered whether large companies were hoping to pit "governments against each other." He added that he thinks the CO2 levies are well-designed and in line with the climate agreement that the government, companies, and societal organizations agreed upon in 2019.