Industry slams minister's decision to keep CO2 tax despite vote

Dutch industry has reacted angrily to a decision by climate minister Sophie Hermans to retain a controversial tax on carbon dioxide emissions, even though MPs voted to abolish it .

Hermans told parliament this week she plans to keep the tax but will temporarily cut the rate to zero in 2026, effectively leaving the final decision to the next government.

Industry groups say that move only increases uncertainty for businesses. “We are extremely disappointed,” Maarten van Gaans-Gijbels, head of environmental affairs at refinery association Vemobin, told the Telegraaf . “The uncertainty continues while parliament has made its feelings clear. And the minister herself has admitted it does not work.”

Several chemicals firms, including US-based LyondellBasell, pigment specialist Tronox, and plastics producer Indorama, have closed operations in the Netherlands over the past year, leading to the loss of more than 1,000 jobs in the Port of Rotterdam industrial area.

Hans Grunfeld of industry group VEMW said it was incomprehensible that the minister would keep a measure which, in his view, is pushing companies abroad.

“The minister has admitted that this measure is not boosting sustainability but is leading companies to move abroad,” he said. “It is inexplicable, and at a time when the need for a strong European industry is becoming even clearer.”

ABN Amro economist Albert Jan Swart said the confusion is also damaging the Netherlands' international investment climate.

“Germany and France are relaxing the rules to keep their industry,” he said. “The Netherlands is making things more expensive and more complicated. We are piling costs on things while other countries are offering space. Then the choice is pretty obvious.”

The carbon tax has been in place since 2021, with its costs initially covered by a compensation scheme. That compensation is being phased out through 2035 to give companies time to reduce their emissions.

Meanwhile, Hermans has said she will not be standing as an MP on behalf of the VVD in the October election.