Environmental Policy

in

Netherlands

Nittin Mittal (596)

POLICIES

Climate change: policy Depletion of the ozone layer: policy Acidification and trans boundary air pollution: policy Environmental pressure in the Netherlands, Eutrophication theme: introduction and policy Environmental pressure in the Netherlands, Toxic and hazardous substances theme: introduction and policy Waste Management theme: Dutch policy

Climate change: policy

UN Climate Treaty and the Kyoto Protocol  Aims: to reduce anthropogenic influences on the climate by stabilising atmospheric concentrations of greenhouse gases.  The objective is an average reduction of emissions of greenhouse gases by the industrialised countries of 5% between 2008 and 2012, as compared to 1990. This includes the countries of Eastern Europe and the former Soviet Union. Kyoto Protocol Objective for the Netherlands  To reduce greenhouse-gas emissions by 6% compared to 1990 in the period 2008-2012 (the 'first budget period')  It has been calculated that the emission of greenhouse gases in 2010 would be 239 billion kg if the Netherlands were not to implement a climate policy. That is 40 billion kg more than is permitted,  The government wishes to achieve 20 billion kg of the 40 billion kg of reductions in the Netherlands. The Netherlands aims to find the other 20 billion kg abroad. Domestic reduction  The domestic objective for the emission of greenhouse gases is therefore an annual average of 219 billion kg CO2equivalents in the budget period.  The package of measures to achieve this objective includes encouraging energy conservation and renewable energy and multi-year agreements with industry. This package of measures has been set out in the Uitvoeringsnota klimaatbeleid (Climate Policy Implementation Memorandum) (VROM, 2001).

Contd
International reduction
   

The annual 20 billion kg reduction that has to be made abroad is achieved with 'flexible mechanisms'. These mechanisms allow the Netherlands to buy 'credits' from companies that achieve greenhouse-gas reductions in other countries. 1 credit corresponds to 1 ton of greenhouse-gas reduction. each of which cost approximately EUR 4-5 During the budget period of five years, a total reduction of 100 billion kg CO2 equivalents has to be purchased abroad and that will therefore probably cost the government 400-500 million euros.

There are two types of 'credit':  Credits earned by means of Joint Implementation are known as 'emission reduction units' (ERUs). In practice, companies can earn ERUs by achieving reductions in the budget period in Central and Eastern European countries.The company can then sell the ERUs to the government.  Credits earned with the Clean Development Mechanism are known as 'CERs'. A company can earn CERs in the same way as ERUs. The difference is that companies can earn CERs by setting up emission-reduction projects in developing countries.

Depletion of the ozone layer: policy

Policy international  Aims to restrict or stop the production and use of ozone-depleting substances  A large number of countries have signed the Montreal Protocol and therefore undertaken to use no more chlorinated fluorocarbons (CFCs) from 1996 onwards  The Montreal Protocol permits the use of HCFCs for a number of years to come. Consequently, the production of HCFCs rose sharply in the 1990s. Policy - national  Aim in the Netherlands is the complete cessation of domestic sales of ozone-depleting substances  The Netherlands also believes that it is important for all the halon and chlorofluorocarbon in circulation to be collected on 1 January 2004 prior to being destroyed  From 1995 onwards, only recycled chlorofluorocarbons and halons have been sold in the Netherlands, in line with international agreements  An estimated maximum of 4 000 tons of halons and chlorofluorocarbons is still in circulation in the Netherlands. This will have to be collected, stored and then processed.

Acidification and transboundary air pollution: policy

SO2 million kg Emission objectives for the Netherlands in 2010 Emission ceiling Gothenburg Protocol Emission ceiling NEC directive National target Emission targets by sector in 2010 Industry, energy, refineries Consumers Trade, services, government and construction Agriculture Traffic
Source: VROM. See the

NOx

NH3

VOC

50 50 46

266 260 231

128 128 100

185 191 163

30 1 1 1 13

65 7 3 6 150

2 7 86 5

60 26 26 2 49
RIVM/EDC/Oct02

Guide to 'National air quality' section for the policy

objectives for particulate matter and ozone.

Contd
International agreements about acid emissions  At the international level, 31 countries, including all the EU member states, have made agreements about emission ceilings for 2010 (the Gothenburg Protocol).  In the Environment Council meeting of 22 June 2000, the EU member states agreed on national emission ceilings (the NEC directive).  The national objectives have been made stricter than the international agreements, in part to create a safety margin.

Eutrophication concerns the enrichment of ecosystems with nitrogen and phosphorus, primarily from the application of manure and fertiliser on land. This enrichment can have adverse effects on ecosystems and public health.

Contd
Sources of eutrophying substances  Nitrogen and phosphorus are primarily brought into the environment by the agriculture and horticulture target sector, in the form of manure and fertilisers applied to soil  Discharges to surface water by industry and sewage treatment plants also contribute to eutrophication. Impact of eutrophication on nature  This generally results in the dominance of a few plant and animal species, or of just one.  The effects of discharges to surface water include algal blooms.  Along with acidification and desiccation, eutrophication is a major cause of the decline of terrestrial nature in the Netherlands.  The function of groundwater as an ingredient in the public water supply may be threatened by excessive nitrate concentrations. Maximum Allowable Concentration (MAC) for nitrate  WHO, followed by the EU (in its Drinking Water Directive of 1980) and the Dutch government (in the Water Supply Act), set the MAC for nitrate in water for human consumption at 50 mg/l.  The Dutch government has adopted a target value for nitrate in groundwater of 25 mg/l.  Averages for still water (ponds, lake) during summer must not exceed 0.15 mg/l of total phosphorus and 2.2 mg/l total nitrogen

Contd


Target values of 0.05 mg/l total phosphorus and 1 mg/l total nitrogen have been established to really tackle eutrophication. These values serve as guidelines in respect of influences on other bodies of water, such as those under national management

10

Environmental pressure in the Netherlands, Toxic and hazardous substances theme: introduction and policy

      

'Toxic and hazardous substances' is an umbrella term for the contamination of soil, water, and air with toxic substances that are not included in the other themes. The Toxic and hazardous substances theme includes: toxic chemical substances, including the priority substances such as heavy metals, PAHs, PCBs, dioxins and volatile organic compounds; pesticides; radioactive substances; radiation; micro-organisms. The burden on the environment generated by these substances can harm nature and public health.

11

Contd

12

Contd
Origin of toxic substances  Toxic substances spread to water, soil and air as a result of the use of chemicals and products by,  They spread through point sources and diffuse sources. Point sources include, for example, industrial discharges. Diffuse sources consist of, for instance, the use of pesticides or the emissions of chemicals generated by the use of consumer products. Impact of toxic substances  Toxic substances in the water and soil can have an undesirable impact on ecosystem functioning and on human health.  Impaired function, in the form of impaired breeding success, impaired resistance and so on, often emerges at the top of food chains as a result of the accumulation of substances in the food chain.  Undesirable effects have been observed in, for example, common terns, owls and mice and in micro-organisms at polluted soil sites. Policy objectives and strategy  Source-reduction policy - . The strategies adopted consist of the reduction of the emissions of these substances or the treatment of wastewater before it is discharged into surface water.  Effect-reduction policy - Where pollution has already occurred, effect-reduction measures can reduce the risks for people and nature. Examples of effect-reduction measures are the clean-up of polluted soils and dredging sludge. These measures have a direct effect on the quality of water, soil and air.

13

Contd
The new substances policy As a supplement to the two-pronged approach already in place, the Ministry of Housing, Spatial Planning and the Environment has formulated the new substances policy in the Strategy on Management of Substances policy  cessation of the use of substances or products that involve an unacceptable danger or risk;  no carcinogenic, mutagenic, reproduction toxic (CMR) substances or highly persistent, bioaccumulative, toxic (PBT) substances in consumer products and open applications and the avoidance as much as possible of substances of this kind in industrial applications;  efforts to terminate emissions of persistent, bioaccumulative, toxic (PBT) substances within a single generation, and no later than 2020.

14

Waste Management theme: Dutch policy

Introduced: in year 2002 Disposal theme will now be known as Waste management  Waste management includes the entire chain of waste segregation at source, collection, transport, storage, processing, recovery and removal.  Waste prevention is not covered under this theme. New definitions in the National Waste Management Plan  The Ministry uses new terms and definitions in the National Waste Management Plan for dealing with waste. Important changes include:  the term 'disposal' (the total chain) has been replaced by 'management' or 'waste management';  the term 'final disposal', mainly incineration in a waste incinerator and landfill, has been replaced by 'disposal';  the term 'recovery' is now the umbrella term for reuse, recycling and the use of waste principally as fuel. This is justified by an amendment to the Environmental Management Act in May 2002  The definition above means that recovery is broader than reuse.  The concept of discharging waste to surface water will also apply to the discharge of treated water separated during the processing of liquid waste streams .  Until now, the Ministry used the term 'discharge' to describe the actual discharge of a waste substance into surface water

15

Contd
Consequences of the new definitions for data about waste management  With the Chemicals, Safety and Radiation Protection Directorate of the Ministry of Housing, Spatial Planning and the Environment, it has been agreed that we will continue to use the old terminology and definitions in this Environmental Data Compendium for figures about reuse, incineration, landfill and discharge. Lansink's Ladder The waste policy follows a hierarchy in waste management, which corresponds broadly to 'Lansink's Ladder' (named after the proposer of the motion passed unanimously by the Dutch Lower House in 1979). The hierarchy is as follows:
 

 

waste prevention (highest priority); the highest possible quality of recovery. In so far as recovery in the form of reuse or recycling is not possible, high priority is given to using the energy content of waste by using it (after post-separation) as fuel in installations with high energy yields; incineration as a form of disposal, using the energy generated; landfill (the least desirable processing method).

16

Environmental Policy Instruments

in

Netherlands

Niharika Agarwal (597)

17

INSTRUMENTS
Subsidies
Motor vehicle tax Aircraft noise charge Fuels Tax on coal Tap water tax Ground water extraction tax MINAS Waste Tax Municipal waste charge Energy tax Duty on petrol Excise duty on mineral oil other than petrol

Trading Schemes

Taxes

Green funds scheme for environmentally friendly investment projects Tax relief for investment in environmentally friendly technology Subsidy scheme for production of renewable energy

NOX Emissions trading scheme CO2 Emissions trading

18

Motor Vehicle Tax

Introduced: 1993 Design: Depends on the type of vehicle (car, van, motorcycle, lorry etc.), weight and type of fuel. Revenue receipts: State/Regional Government
6000

5000

4000

3000

2000

1000

0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

19

Revenue (in millions EUR)

Aircraft Noise Charge

Introduced: 1983 Aims: Reduce noise effects from airorts
50 60

Receipt of Revenues:  National/Federal Government  Revenue is earmarked for insulation and redevelopment' Design:  Aircraft landing at Dutch airports are subject to the charge, in addition to landing fees, at a level reflecting noise levels Tax Rate: 95.75 per noise-production unit

40

30

20

10

0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

20

Revenue (in millions EUR)

Fuel Tax on Coal

Introduced: 1992 Aim: The aim of fuel tax is to tackle pollution and reduce energy consumption. Revenue Receipts: National/Federal Government
480 680

580

Tax Rate: 12.76 per 1000 kilos coal. Design: The fuel tax is mainly levied on manufacturers and importers of coal. Tax is payable by persons who extract, produce or import coal and subsequently use the coal as fuel or supply them to others. Refunds: Refunds can be given when the energy source is exported to another country.
80 380

280

180

-20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

21

Revenue (in millions EUR)

Ground Water Extraction Tax

Introduced: January,1995
200

Aims:  To raise revenue. It makes it unnecessary to raise other taxes. (Eg. Labour Tax)  To generate a positive environmental effect and to protect the scarce groundwater resource in the Netherlands, which is the source of 70 per cent of the total water supply (Ecotec, 2001) Design: Applies to the abstraction of groundwater by water works or by other entities (industry; agriculture) , which can pass the tax on to the consumers. Tax Rates: There are three tax rates (VROM, 2006):  For extractions 0.1810 per m3  For groundwater infiltrated into the same aquifer from which it was extracted 0.00 per m3  For a combination of river bank filtration and artificial recharge 0.0586 per m3

180

160

140

120

100

80

60

40

20

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

22

Allocation of Revenue: General budget

Revenue (in millions EUR)

Tap Water Tax

Introduced: 2000 Aims:  To raise revenue for restructuring and greening the fiscal system.  Gives a price signal towards water saving.  To contribute to the reduction of the use of groundwater relative to the use of surface water in water supply. (Since groundwater is cheaper to extract than surface water, the tax serves to narrow the price differential. ) Allocation of Revenue: General budget. Tax Rates: 0.146 per m3 (VROM, 2006). Exemptions: The supply of water for emergency provisions, like fire taps and sprinkler installations, are exempted from the tax.
180 160

140

120

100

80

60

40

20

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

23

Revenue (in millions EUR)

Surplus Nitrogen and Phosphorous Levy - MINAS

Introduced: The government introduced a levy system on the nitrogen and the phosphate surplus of pig, poultry and dairy farms in 1998 to reduce emissions. The system is called MINAS and operates at a national level. It became compulsory for all farms from 1 January 2001 (RIVM, 2001).
Aims:
18 16 14

Stabilisation of manure production through reducing mineral surpluses and increasing mineral efficiency, to meet the objectives formulated in the EU Nitrate Directive.  The main objective is to reduce and prevent surface and groundwater pollution caused by nitrates from agricultural sources.


12 10 8 6

Tax Rates:
Type Mineral Exemption Surplus Nitrogen Surplus Nitrogen Surplus Phosphate Limits Up to 10kg of phosphate per hectare > 40kg per hectare 0 to 40 kg per hectare > 10 kg per hectare Cost: euro/kg 1999 2005 0 2.30 4.54 1.15 9.00
Source: OECD

4 2 0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Revenue (in millions EUR)

24

Waste Tax
Introduced: 1st January 1995
250

Aims:  To raise revenue as it makes it unnecessary to raise other taxes with less favourable side effects.  To stimulate the processing of waste in a way that will be of most benefit to the environment Design:  Levied on waste which is delivered to dumps and incinerators. The tax is calculated on the basis of the weight of the waste.  Waste from incineration of refuse that is dumped on the own premises of the incinerating company, is taxed.  No tax is levied in cases where other companies dump their waste on their own premises. Tax Rate: 88.21 per tonne, in 2008 Allocation of Revenues: General budget

200

150

100

50

25

Performance: It has contributed to the desired shift from dumping to prevention, recycling and incineration.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Revenue (in millions EUR)

Municipal Waste Charge

Aims: To create a more equitable distribution of costs and increase the incentive to reduce Design: Weight-based charges, pay-per-bag charges and charges based on household size and the number of collections
(EEA 1996, pp60)
1400

1200

1000

Tax rate: 185.00 . average annual rate per household Performance: A study of municipalities operating the pay-for bag charges found 10-20% less waste per capita than comparable municipalities with traditional systems.(EEA
1996, pp60)

800

600

400

200

0 1994 1995 1996 1997 1998 1999 2000 2001

26

Revenue (in millions EUR)

Energy Tax
Introduced: 1996 Revenue Receipts: National/Federal Government Aim: Reduce CO2 emissions and energy consumption Design: The tax is incorporated into the price the supplier charges for the fuels or energy. The energy tax is invoiced to the consumer by the utilities company who then pays the collected tax to the Tax administration. Tax Rate: 199 per connection to the electricity network. The rates are linked to the amount of energy consumed Other gases: Blast furnace gas, coke furnace gas, coal gas and refinery gas: 129,14 per 1000 GJ Coal gasification gas: 510,02 per 1000 GJ Exemption: Natural gas, other gases and electricity used for generating electricity are exempt from the energy tax.
4500

4000

3500

3000

2500

2000

1500

1000

500

0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

27

Revenue (in millions EUR)

Duty on Petrol
Introduced:1990 Exemption:  Petrol used for other purposes than motor fuel or heating fuel  Petrol used in blast furnaces for chemical reduction  Petrol used for manufacturing of mineral oils Refunds:  Petrol used for manufacturing of electricity  A full excise duty refund is given on petrol that is put in the fuel tanks of an aircraft and is used for propelling the aircraft on cross-border flight (no excise duty refund is given on petrol used for inland flights other than military flights) Revenue : 100% of revenue goes to National/Federal Government
4500 4000

3500

3000

2500

2000

1500

1000

500

0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

28

Revenue (in millions EUR)

Excise Duty on Mineral Oil other than Petrol

4000 3500

3000

2500

2000

1500

1000

500

0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Revenue (in millions EUR)

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Green Funds Scheme for Environmentallyfriendly Investment Projects

Sub-scheme label: Subsidy type: Of what consists the subsidy: Loans for green projects Soft Loan Interest rate 1.5% below market rate; Financed by income tax exemption on dividends from Green Funds

About: Private individuals can put their savings or investments into a green-fund, the money from which has to be invested in green projects. Interest and dividend derived from this green fund are exempt from income tax. So investors in green projects can contract loans at lower interest rates. Aims: To create new projects in the fields of nature conservation To promote a change in economic activities so that these activities are performed in harmony with the surrounding world To promote dissemination of technology for sustainable energy To promote public involvement in environmental projects Requirements: The projects have to be new project; however, a fundamental improvement to an existing project can also be regarded as a new project. Each project will have to issue an individual statement (a Green Statement) which indicates the nature of the project and the projects assets as well as the period of validity. If a project falls into one of the designated categories those seeking funding can apply to a Green investment fund Administrative feasibility and Costs It uses administrative systems of the government, banks, central bank and the Treasury. Almost no new administrative system were developed but the existing ones were used. The banks, not the government perform the key parts of the administrative process. As there is fierce competition between the diverse green funds, the banks are obliged to keep administrative costs low.

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Tax relief for Investment in Environmental Friendly Technology

Sub-scheme label: Purpose: Subsidy type: Promoting investments in environmentally friendly technology Tax Reduction Machinery that is listed on the combined MIA/VAMIL list can be depreciated more quickly than normal. The company can write off the investment at an earlier stage, which results in the reduction of operating profit and tax payment. This scheme offers an extra income deduction of up to 40% of the cost price of each qualifying investment in a calendar year. Qualifying assets are divided into categories, based on the extra costs for investing in environmentally friendly assets, compared to a more conventional solution. If the budget available for the MIA scheme threatens to be exceeded, the Minister of Finance may decide to limit the scheme or even close the scheme (temporarily).

Of what consists the subsidy:

Of what consists the subsidy:

Criteria used for determining the size of the subsidy:

31

Subsidy Scheme for the Production of Renewable Energy

Sub-scheme label: Purpose: Boosting the production of sustainable energy in the Netherlands.

Authority that introduce d the instrument:

National / federal parliament

Year of introduction:

2008

Subsidy type:

Grant A grant per unit of renewable electricity or renewable gas produced and fed into the grid. Premium on top of electricity or gas revenues. Rising energy prices result in less subsidy payments. Categories with different tariffs (base prices): Wind on-shore and off-shore, Solar-PV, Biomass (digesters, biomass combustion, waste combustion, landfill gas, waste water treatment), Hydro, large CHP. Fixed for 12 15 years. Costs determine the subsidy level for each category. Each category has its own budget. First come first serve of call for tender depending on the specific category.

Of what consists the subsidy:

Criteria used for determining the size of the subsidy:

32

NOX Emissions Trading Scheme

Design Unit Allocation The Unit of the Netherlands NOX Trading Scheme is the NOx Emission Credit. A NOX emission credit entitles its holder to emit one ton of NOX emissions during a given year. The allocation of credits in the NOX trading scheme is based on a system of Performance Standard Rates (PSR). The PSR used by the Dutch government was calculated as follows:
National PSR (gNOX/GJ) = Target NOX Emissions (Kilotons) for a Specific Year (Projected Energy/Fossil Fuel Use for a Specific Year)

Year 2005 2006 2007 2008 2009 2010

Performance Standard Rate (PSR) 68gNOX /GT 63gNOX /GT 58gNOX /GT 52gNOX /GT 46gNOX /GT 40gNOX /GT

This rate based approach allocates dynamically saleable emissions credits to those industrial facilities participating in the scheme based on the PSR multiplied by the facilitys actual fuel use. NOx Credit Allocation = PSR x Fossil Fuel Use

Compliance All industrial facilities compelled to participate in the scheme will have to meet this annually declining PSR, through abatement measures or the purchase of credits from other facilities. Banking and Borrowing The Netherlandss NOX scheme allows participating sources to borrow and bank credits. Each facility may borrow a limited number of credits from its next year's allocation or bank a limited number of credits for use in the following year. Borrowing and banking is limited to 10 per cent of each source's 2004 NOX allocation, 7 per cent of each sources 2005 allocation and 5 per cent of each sources allocation in the years thereafter.

33

CO2 Emissions Trading

Introduced: 2005 Purpose: Since 2005, some 10000 large industrial plants in the EU have been required to buy and sell permits to release carbon dioxide into the atmosphere Types of permits: Quotas A central authority sets a limit or cap on the amount of a pollutant that can be emitted. The limit or cap is allocated or sold to firms in the form of emissions permits which represent the right to emit or discharge a specific volume of the specified pollutant. Firms are required to hold a number of permits (or carbon credits) equivalent to their emissions. The total number of permits cannot exceed the cap, limiting total emissions to that level.

34

ENVIRONMENTAL EXPENDITURE (percent of GDP)

YEAR 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 PUBLIC .88 .76 .8 1 .9 .9 .9 1.1 1.2 1.3 PRIVATE .34 .34 .34 .4 .6 .5 .8 .7 .7 .5 TOTAL .88 .34 1.1 1.13 1.4 1.5 1.4 1.7 1.8 1.9 1.8 1.1 1.58

35

2006 2007

Revenue in million EUR

5001 4751 4501 4251 4001 3751 3501 Fuel tax on coal 3251 3001 Air Craft Noise Charge 2751 2501 2251 2001 1751 MINAS 1501 1251 Waste tax 1001 751 501 251 1 Energy tax Ground water extraction tax Exise duty on mineral oil Duty on petrol

Motor Vehicle Tax

Tap water tax

Municipal waste charge

36

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Trend in Revenues from Environmentally related Taxes

10 9 8 7 6 5 4 3 2 1 0 1995
37

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

% of GDP

% of Tax Revenue