DUTCH SEEK AMBITIOUS ENERGY-CLIMATE CHANGE TARGETS

UNCLAS SECTION 01 OF 03 THE HAGUE 000416

SENSITIVE

SIPDIS

STATE FOR OES, EUR/WE (TSMITH),EUR/PGI (DTESSLER)
USDA FOR FAS-ELIZABETH JONES
USDOC FOR 4212/USFCS/MAC/EURA/OWE/DCALVERT
PARIS FOR OECD
USEU FOR TSMITHAM

E.O. 12356: N/A
TAGS: KGHG SENV ENRG ECON EINV EUN NL
SUBJECT: DUTCH SEEK AMBITIOUS ENERGY-CLIMATE CHANGE TARGETS

REF: A) BRUSSELS 117
B) THE HAGUE 253
C) THE HAGUE 216
D) O7 THE HAGUE 501

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THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED; PLEASE HANDLE
ACCORDINGLY.


1. (SBU) SUMMARY. While officially welcoming the European
Commission's energy and climate change targets, some Dutch officials
have indicated that the GONL was hoping for the adoption of more
"ambitious" goals. At home, the GONL is seeking to go beyond EU
targets by committing independently to a 30 percent reduction in
greenhouse gas emissions over 1990 levels, an increase to 20 percent
in renewable energy sources, and cuts in overall energy use by 2
percent per year -- all by 2020. Meanwhile, some local
environmental advocates have questioned the GONL's commitment to
real targets, given that some can only be met by purchasing emission
allowances through the European Emission Trading System. END
SUMMARY.

SUPPORTING "20 AND 20 AND 10" EU TARGETS . . .
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2. (U) The Dutch officially welcomed the European Commission's
call earlier this year to implement far-reaching energy and climate
change targets (reported ref A). These include an overall EU
reduction in greenhouse gas (GHG) emissions by 20 percent from 1990
levels, an increase to 20 percent in power derived from renewable
sources, and a 10 percent biofuel use target -- all by 2020. Within
these overall targets, the Netherlands is expected to reduce GHG
emissions by 16 percent, increase renewable energy sources to 14
percent of total energy production, and expand biofuel use to 10
percent.

. . . BUT SEEKING "30 AND 20 AND 20" AT HOME
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3. (U) Meanwhile, the GONL has committed the Netherlands
independently to a 30 percent reduction in GHG emissions over 1990
levels, an increase to 20 percent in renewable energy sources, and
cuts in overall energy use by 2 percent per year -- again, all by

2020. The GONL is currently studying the feasibility of a mandatory
20 percent sustainably-produced biofuel mix by 2020.


4. (U) The GONL's plan, entitled "Clean and Efficient" also sets
out concrete climate goals for old and new buildings, energy
companies, industry, traffic, transport, and agriculture sectors.
For 2008, the GONL has earmarked 140 million euros to implement the
plan, in addition to an existing budget of 1.3 billion euros for
climate and sustainable development efforts. The GONL will report
annually on the plan's progress and assess in 2010 the need for
additional measures. (See refs B-D for related reporting.)

GHG REDUCTIONS THROUGH ETS AND CCS
--------------


5. (U) Jacqueline Cramer, Dutch Minister of Housing, Spatial
Planning and the Environment, had lamented to the media prior to the
release of the Commission's climate change strategy that the overall
EU GHG reduction targets were not "more ambitious." She noted that
the 16 percent national target set for the Netherlands was well
within the scope of current Dutch national GHG reduction goals. To
reach its 30 percent reduction target by 2020, however, she has
noted that the Dutch will need to rely heavily on the European
Emission Trading System (ETS) and carbon capture and storage (CCS)
technology. Cramer has indicated a preference for meeting this goal
through ETS rather than a carbon tax, given a lack of public support
for additional taxes. On the European level, she said the GONL also
supported an auctioning of ETS rights and a greater harmonization
and expansion of the system to include other sectors.


6. (U) In early 2007, Prime Minister Jan Peter Balkenende
announced plans to make the Netherlands a global leader in the
development of CCS. The GONL has already committed some 55 million
euros in subsidies to support the construction of CCS facilities in

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Rotterdam, Drachten, Utrecht, and off-shore in the North-Sea. The
GONL has also stipulated that the construction of four new
coal-fired power stations in the country include CCS technology.


7. (U) The GONL is also exploring how the Dutch agricultural
sector can contribute to reducing non-CO2 GHGs such as nitrous oxide
and methane, which are produced in part through fertilizing and
grazing. Such efforts could include possible changes in livestock
feed, improved precision farming, and fertilizers.

INCREASES IN RENEWABLE ENERGY THROUGH WIND POWER
-------------- ---


8. (U) Minister Cramer has acknowledged that the Netherlands will
find it difficult to achieve a 14 percent increase in renewable
energy sources, let alone the 20 percent target it has set for
itself. (Renewables currently represent less than 4 percent of the
overall energy mix in the country.) While wind turbines are already
familiar sights in the Netherlands, a new government subsidy program
will seek to increase wind power production by 100 percent by the
end of 2012. The GONL will also introduce subsidies for the
development of both offshore and onshore wind energy/power grids and
'incentives' for solar photo voltaic power. The introduction of
more renewable energy sources is also expected to contribute to
emission reductions.

MORE BIOFUEL OPTIONS
--------------


9. (U) The Netherlands also wants to become a market and testing
ground for "sustainable mobility," which is defined as meeting
mobility/transport needs of the present without compromising the
ability of future generations to meet their needs. The GONL plans
to achieve this by increasing the mandatory percentage of biofuels
used in transport to 5.75 percent by 2010. As noted above, the GONL
is studying the feasibility of a mandatory 20 percent
sustainably-produced biofuel mix by 2020. The national network of
biogas and natural gas filling stations will be expanded, and the
GONL hopes that hybrid buses and buses fueled by biofuels and
natural gas will be a familiar sight by 2011. (NOTE: The Embassy
contracted a natural gas bus for the transport of a recent
delegation visiting the Netherlands for energy efficiency related
meetings. END NOTE.) In 2008, the GONL will also introduce a
differentiated tax scheme designed to encourage the purchase fuel
efficient vehicles.

SEEKING GREATER ENERGY EFFICIENCY
--------------


10. (U) Other measures under the GONL plan include increasing
energy efficiency by mandating that all new buildings be carbon
neutral by 2012. In January, a first step was taken with the
introduction of energy efficiency labels for all buildings for sale
or for rent. Working together with energy providers, housing
corporations, and the construction sector, the GONL is also
implementing a so-called "More with Less" plan. This plan provides
subsidies to some 500,000 existing buildings (residential,
industrial, and commercial),with the aim of achieving energy
efficiency improvements of 20-30 percent over current levels by

2011. From 2012 onward, the plan will target an additional 300,000
buildings annually. In 2008, the government will also introduce
subsidies to fund the introduction of renewable energy technology in
some 100,000 existing buildings (solar boilers, heat pumps, and
solar electricity).


11. (U) As one of the largest exporters of agricultural products
in the world (behind the United States and France) in terms of
high-value produce ($67 billion in 2007),the Netherlands relies
heavily on its horticultural greenhouses. These greenhouses,
however, use a lot of energy. The GONL is exploring how heat and
cold storage can be used to make these greenhouses more energy
neutral as well as technology for sharing surplus energy with
neighboring houses or businesses. In 2011, the GONL plans to
introduce an ETS system specifically for greenhouses.

SUCCESS RELIES ON INDUSTRY AND PUBLIC SUPPORT
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12. (U) Close cooperation between government and industry has been
central to the GONL's "Clean and Efficient" plan. During the
initial consultation period, Minister Cramer met with leaders in the
country's top 10 industries. These meetings resulted in a
sustainability accord outlining specific measures to reduce
emissions, increase the supply of renewable energy, and improve
energy efficiency. These actions reflected an understanding within
the GONL that the plan's ambitious "30 and 20 and 20" targets by
2020 could only be met through the inclusion of the country's key
energy market stakeholders. Nonetheless, some industry leaders,
including Shell's CEO Jeroen van der Veer, have publicly warned that
Dutch national goals need to be realistic as "overstretched targets"
can discourage rather than motivate.


13. (U) The GONL also seeks to educate the general public on
emissions reductions methods through two consumer-oriented pilot
projects. The first, an "Energy Box," is a kit containing a variety
of energy-saving goods for common household use, including low
energy light bulbs and energy saving showerheads. If all of the
box's contents are installed, the average household could reduce its
energy usage by 15 percent. The second, an "Energy Coupon", can be
used to purchase energy savings products. The GONL is considering
plans to introduce the pilot projects nationwide.

COMMENT: TARGETS ONLY ACHIEVABLE VIA ETS TRADING?
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14. (SBU) Some Environment Ministry contacts have indicated that
the GONL was "less than thrilled" with the Commission's energy and
climate change proposal. Minister Cramer, in fact, has been
noticeably quiet on the issue since the European Council's March
approval of the Commission's energy and climate change legislative
package. Meanwhile, some Dutch environment organizations and
politicians (both within and outside the ruling coalition) have
questioned the GONL's commitment to real energy and climate change
targets, given that its "ambitious" national plan includes emission
allowances purchased through the EU ETS in its GHG reduction
calculations.