Market Report: The Netherlands

From the November 2019 issue.

Environmental action and transport efficiencies are driving the Netherlands’ freight priorities. Is this an example that other emerging countries should adopt moving forward?

Climate change action is set to transform how countries throughout Europe and the rest of the world operate. By 2030, the Netherlands aims to reduce its greenhouse gas emissions by 49 per cent compared to 1990 levels. The measures to do this are laid down in the national Climate Agreement that the Minister of Economic Affairs and Climate Policy, Eric Wiebes, sent to parliament on 28 June 2019, also on behalf of the Ministers of the Interior and Kingdom Relations, Agriculture, and Infrastructure and Water Management.

The measures that were presented will enable the Netherlands to fulfil its commitments under the Paris Agreement and the National Climate Act. The government is confident that the national Climate Agreement will make the country economically stronger and more sustainable.

The agreement is based on the principle that reducing carbon emissions must be feasible and affordable for everyone. The government therefore seeks a cost-efficient transition that limits the financial impact on households as much as possible and implements measures to fairly distribute the financial burden between citizens and businesses. Another key element of the deal is that the Netherlands makes optimal use of available time until 2050.

The government launched talks on a national Climate Agreement on 23 February 2018, by setting out the political framework with which the Climate Agreement needed to comply. Over the past year more than 100 parties have developed a package of proposals that will enable the Netherlands to nearly halve its carbon emissions by 2030. Talks were held across five Climate Agreement sectoral platforms: Buildings, Electricity, Industry, Mobility and Agriculture. From the very start of the talks, the government emphasised the need for cost effectiveness. The government set a quantified emission reduction target. Two independent agencies evaluated the plan on its potential to reduce emissions and calculated expected cost to society.

This government is adamant that the transition should be affordable as additional costs are projected to be lower than 0.5 per cent of the Gross Domestic Product (GDP) in 2030.

The government aims to take measures to shift the financial burden from households to businesses. It will reduce the total tax payable on domestic energy use, so that households with an average energy consumption will see their annual energy bill fall significantly in 2020. The government will also introduce measures, such as a targeted carbon levy, to make industry cleaner with a minimal risk of job losses in the country. This is reported to help businesses become more sustainable while strengthening the Netherlands’ competitive position.

In terms of mobility, new passenger cars will, ideally, be emission-free by 2030. There are also incentives for electric vehicles through several taxation measures, including in support of the used car market; 1.8 million charging points by 2030. Other changes include shifts from car to bicycle or public transport. Smart solutions are set to enable logistics to organise more efficient and sustainable transport.

Industry in the Netherlands will be impacted by the introduction of a targeted carbon levy, starting at €30 per tonne in 2021, rising to €125-150 per tonne in 2030, including the ETS price, on every tonne emitted exceeding a fixed reduction path. A subsidy scheme for renewable energy (SDE) and CO2-reducing options in industry, such as funding for innovation aimed at hydrogen and other sustainable fuels is projected to make headway.

The Netherlands is also planning to phase-out coal-fired electricity generation by 2025/2020, with the first plant to be closed by as early as next year. This will also accelerate offshore wind power, prompting growth of onshore wind and solar energy. There will also be subsidies for additional renewable energy capacity (wind and solar) until 2025; estimated 70 per cent renewable share in electricity production by 2030 along with the introduction of a minimum carbon price for electricity production and agricultural and land use.

As the world’s second largest agricultural producer in the world, trailing the US with an average export of €65 billion worth of vegetables, fruit, flowers, meat and dairy products annually, these pushes for greater sustainability are sure to set a remarkable world example. That is, if it all goes to plan.

In 2018, the Dutch export of agricultural products exceeded €90 billion. A sizeable proportion of Dutch agricultural products is exported to Germany (€22.8 billion) and Belgium (€10.2 billion), with these two neighbouring countries together making up 36 per cent of all Dutch agricultural exports according to the Government of the Netherlands. They are followed by the UK, France, Italy and Spain. The greatest absolute increases in Dutch agricultural exports in 2018 pertain to Japan (+ €110 million), Morocco (+ €93 million), Poland (+ €86 million), Russia (+ €77 million) and China (+ €66 million).

Minister for Agriculture, Nature and Food Quality, Carola Schouten, confirmed that these export figures show that the Dutch agriculture and horticulture sector is a major player when it comes to producing food for a growing world population.

“We’re keen to put our expertise and powers of innovation to good use in order to make the transition to circular agriculture,” Schouten said. “This will give a boost to the agricultural innovation in the Netherlands that continues to bolster our position on the global market. And that’s urgently needed, in view of the global issues vis-à-vis growing demand for food on the one hand and our responsibility for the landscape, biodiversity and climate change on the other.”

Research commissioned by the Ministry of Agriculture, Nature and Good Quality carried out by Wageningen Economic Research (WUR) and Statistics Netherlands (CBS) showed that agricultural exports generated some €45 billion for the Dutch economy last year – a figure obtained by taking the export value of the agricultural goods and subtracting the import value of goods and services required to produce and export these. The vast majority of this (€41.5 billion) pertained to products of Dutch origin, with a fraction (€3.5 billion) encompassing goods initially imported and subsequently being exported after limited processing in the Netherlands.

The Netherlands earns most from horticulture (€6 billion), dairy and eggs (€4.7 billion), meat (€4.1 billion) and vegetables (€ 3.8 billion). Similarly, preparations containing cereals, flour and milk, drinks, fruit, live animals and fish and seafood yielded billions of euros for the economy.
While all modes of transport are called on to keep the Netherlands’ economy moving, the road haulage segment is a key focus.

The Government of the Netherlands aims to make the Dutch road haulage sector more competitive by enabling better road access to important areas such as ports. In addition to private sector programs like ‘Better Use’ that are designed to reduce congestion on the busiest roads through improved infrastructure, encouraging freight companies to operate outside peak hours, the government is also committed to environmentally sustainability and achieving greater transport efficiencies in city centres.

Amid these positive ideals for cleaner, more efficient and quitter road transport, there are voices in parliament that urge freight operators to consider options on the water. Minister Van Nieuwenhuizen, for instance, is cutting back on road freight transport.

One of the aims of the 40-million-euro incentive that Minister Cora van Nieuwenhuizen (Infrastructure and Water Management) has allocated to the freight transport sector is to foster a so-called modal shift. Rather than by road, the Minister intends for the sector to transport more goods by water, rail, and pipelines. This is stipulated in the Freight Transport Agenda that she submitted to the House of Representatives in July.

The Freight Transport Agenda comprises agreements regarding more efficient and cleaner freight transport, which the Minister has set down with the Logistics and Logistics Alliance Top Sector. In addition to a shift from road to water and rail, the Agenda also pursues digitalisation in order to boost the efficiency of transport movements.

“The future growth of freight transport goes hand in hand with improving the accessibility of the Netherlands,” Nieuwenhuizen said. “Transporting more containers and bulk goods by inland vessels and freight trains will generate more room on our roads. An average inland vessel can take up to 150 trucks off the road. Furthermore, the transport sector is fully committed to the digitalisation of transport movements, with a view to smarter scheduling of runs at times when there is less traffic on the road.”

It is the minister’s contention that freight transports must be on time and predictable, even in the event of disruptions. This can only be achieved by making optimum use of various modes of transport, such as inland shipping, railways, and pipelines. This modal shift, according to the minister, is fostered by the introduction of freight corridors. Within such corridors, several transport flows can be interlinked efficiently, cargo can be combined, and capacity can be utilised more efficiently.

Another goal set out in the Freight Transport Agenda is the further digitalisation of transport. For example, data exchange between traffic management systems and vehicles within freight corridors will enable optimum use of the available means of transport, while information on, for example, environmental zones and delivery windows will enable drivers to schedule their runs more accurately.

With the Freight Transport Agenda, Nieuwenhuizen is also targeting cleaner freight traffic. Optimum use of the available modes of transport and the exchange of digital information will prevent, for instance, empty or partially loaded running of trucks and ships returning to port empty. The introduction of zero emission zones for delivery vans and trucks, and of the sustainability label for inland vessels – an agreement set down under the Inland Shipping Green Deal – will also boost cleaner freight transport.
The Freight Transport Agenda comprises agreements regarding more efficient and cleaner freight transport, which the Minister has set down with the Logistics and Logistics Alliance Top Sector. In addition to a shift from road to water and rail, the Agenda also pursues digitalisation in order to boost the efficiency of transport movements.

In the years to follow, it will be interesting to witness the effectiveness of these freight priorities and whether other countries throughout Europe should follow suit.

Fast Fact
UK-based ‘clean cold’ technology company, Dearman, and TIP Netherlands partnered this year to deploy Dearman’s liquid nitrogen powered transport refrigeration units in trailers leased by TIP to leading fleet operators. Reducing the environmental impact of a logistics network is an integral part of environmentally conscientious fleet operators seeking low-carbon and clean-air transport solutions according to Dearman.

Fast Fact
VDL Group was named the recipient of the 2019 Dutch Innovation Award last month for its pioneering solutions and technologies as well as its focus on employees, entrepreneurship and cooperation. The Award recognises the innovative strength and the social impact of the family business, which has its head office in Eindhoven, Netherlands.

Fast Fact
Dutch freight forwarding company, Combinex B.V., added 50 Kögel Cargo trailers of the NOVUM generation and two premium Kögel Cool – PurFerro reefers to its fleet earlier this year. Combinex, founded in 2006, is growing constantly, and – like Kögel – won a Best Managed Companies Award for its exemplary management and far-reaching strategic vision, combined with its innovative strength and sustainable management culture.

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