It is perhaps the most striking measure from the Climate Agreement: the CO2 tax for polluting companies. What does the implementation of the CO2 tax look like and where are the pain points?
A form of CO2 tax is not entirely new. Dutch companies are currently paying for their emissions via the European Emissions Trading System (ETS). That is about 20 euros per tonne of greenhouse gas emitted. But that is not enough for the climate objectives. That is why with the introduction of the CO2 tax an amount is added. That extra amount is only paid on every tonne of CO2 emitted above that European ETS limit.
With the introduction of the new, or additional, CO2 tax, companies will not only have to pay more from 2021 onwards. They also have to emit less (a reduction of around 10 percent). If a Dutch company exceeds that new lower limit, from 2021 the company will pay 30 euros per ton to a maximum of 150 euros per ton in 2030.
The tax applies to large companies in almost every sector. Air and shipping are not included in the Climate Agreement and therefore do not contribute.
There is a difference between what has to be paid per company, depending on the activities. The climate agreement now states that the 300 largest companies in the Netherlands will pay the tax if they exceed the tax-free limit. Together they are responsible for around 80 percent of CO2 emissions in Dutch industry.
The amount of the European ETS tax is calculated on the basis of, for example, the company size or type of production. Because the new CO2 tax is linked to that ETS, that can be arranged 'easily'. Although the new CO2 tax is not widely introduced at European level, it is the same – independent – inspectors from the European ETS who are responsible for monitoring.
What will we notice from the Climate Agreement? See below:
Critics of the climate agreement say that the industry is still insufficiently charged with the CO2 tax. To meet the European climate targets as agreed in 2015 in Paris, the industry must emit 14.3 megatonnes less CO2. According to the calculations of the Netherlands Environmental Assessment Agency, that goal is achieved with the new levies.
However, in response to the Climate Agreement, environmental clubs, including Greenpeace, say that the reduction does not guarantee that they will achieve the climate goals. According to these groups, it will also remain unclear when large polluters will actually pay the levy.
But the measure is not meant to raise money; it's about reducing emissions. "And we will succeed based on the current measures," says economist Dirk Schoenmaker of the Erasmus University. He was one of the seventy economists involved in the Climate Agreement.
According to him, that has to do with the incentive that comes from such a levy. It is so high that you really want to avoid it, because otherwise the price will go up nicely, he says. "They are costs for companies; it is a simple calculation and lesson 1 in the economy. If it becomes more expensive, someone will use it less."
The money that the polluting companies will soon spend on the emission tax flows into the state treasury, but to a pot within the general means. Because it is a tax with the objective of achieving the climate goals, the money raised is also paid back to the same companies in the form of subsidies for clean technology development. The idea is that the CO2 tax works in this way on two sides: the emissions are taxed and more sustainable technology is rewarded.
The idea for a CO2 tax does not fall from the sky for this cabinet. Companies in other countries are already paying taxes on their emissions, such as in Sweden. The tax came into force in 1991 and emissions were reduced by around a quarter.
The price per tonne of emissions is also considerably higher there than in other countries: 112 euros. There is also an additional CO2 tax in Norway. Companies there pay 52 euros per tonne of emissions. There are also additional levies in the United Kingdom and Iceland (source: De Nederlandsche Bank).