Why the Netherlands is a Leader in Sustainable Business and Renewables
Businesses worldwide have to change the way they operate as we learn about how urgent it is to protect our environment. While this transition may be difficult, it’s crucial not only for the planet but also for businesses’ bottom lines—in fact, making eco-friendly choices actually helps businesses succeed.
Reducing waste, energy consumption and raw materials not only helps the environment but also saves costs and makes companies more attractive to new customers, improving brand image, whilst boosting the development of new products and services. Circular business models in which products are designed to be reused or recycled are gaining momentum. Energy reduction measures also include ultra-efficient machines and effective insulation in homes and offices. Reducing the amount of packaging that comes into the home, office, factory or hospital. All these things will use less energy and be more environmentally friendly.
The global energy supply side is undergoing a profound transformation. The transition away from fossil fuels towards cleaner and renewable sources of energy is essential to meet rising global energy demand while mitigating the threat of climate change.
As the need for sustainable business practices becomes more urgent, the Netherlands is well positioned to continue its leadership role. The country’s commitment to education and research, as well as its favourable business climate and open culture, sets the stage for continued innovation in sustainable business practices.
The Dutch Advantage
Dutch industry has long been active with sustainability, stemming from its rich industrial history, well-developed physical infrastructure and unique sometimes threatening geography. The Netherlands is a small, densely populated country in Europe with 26% of its land area below sea level. This has driven the Dutch to develop engineering and technology to survive and thrive, becoming a very efficient and stable economy with a diverse and tolerant society. The country’s extensive network of canals and rivers historically has made it a hub for transportation and trade, and its location at the crossroads of Europe with its links with rest of the world (Schiphol Airport and Rotterdam harbor, as prime examples) makes it an ideal place for businesses to connect with traditional and new (international) markets.
In recent years, the Dutch government has been working to create attractive incentives for businesses to expand and adopt more sustainable practices. There are many investment schemes ad subsidies available for for sustainable businesses. For example, the city of Eindhoven has been designated as a “circular economy hotspot,” and Innovationquarter, the development agency of Greater Rotterdam, is intensively helping businesses develop more sustainable products and services.
The government also gives direct incentives to make businesses invest more in projects focused on sustainable energy. A few examples:
- Sustainable Energy Production Incentive (SDE++) for larger energy projects, such as geothermal and solar parks, and techniques that reduce CO2, e.g. capture and storage of CO2.
- Renewable energy subsidy for smart techniques that, for example, combine generation and storage or contribute to smart grids (smart grids).
- Energy investment allowance (EIA) for various energy-efficient and environmentally friendly techniques with tax benefits.
- Investment subsidy for sustainable energy (ISDE) for heat pumps and solar boilers. Both for business users and private individuals.
The Dutch offshore gas fields are an ideal location for carbon capture and storage (CCS). They are situated close to large point source emitters, like power plants and refineries, and have a pre-existing offshore pipeline infrastructure. In addition, many more Dutch gas fields are nearing the end of their production life, making them well suited for repurposing as CCS facilities. The Netherlands could become a world leader in this promising technology.
One of the key factors in its long-term success is the availability of a well-educated workforce in the Netherlands. The Netherlands has over 30 universities, including world-renowned institutions such as Delft University of Technology and Wageningen University, with a history of groundbreaking scientific research. Demand for the skills and knowledge of these graduates is high among businesses in all sectors.
As a result of the above and many other efforts of the Dutch people and government, the Netherlands continues to develop as a global leader in sustainable business practices.
EU law and European consumer power driving global sustainability.
Although the Netherlands is a small country, as one of the founding members of the European Union, it has had an disproportionate impact in shaping policy in Brussels. Here are some examples of how the EU is actively promoting sustainability:
- Renewable Energy Directive sets renewable energy targets for each member state and provides financial incentives for businesses to adopt renewable energy technologies
- Circular Economy Package sets ambitious recycling targets for member states and creates financial incentives for businesses to recycle waste products
- Energy Efficiency Directive requires member states to implement energy efficiency measures in order to reduce energy consumption
- Emissions Trading Scheme places a cap on greenhouse gas emissions from certain industries, and businesses that exceed their emissions allowances must purchase carbon credits from others businesses that have achieved lower emissions levels
- General Data Protection Regulation requires businesses to protect the personal data of their customers and employees
- The European Union has a huge new sustainability plan called the Green Deal. The goal of the Green Deal is to make Europe climate-neutral by 2050. In other words, Europe will in the future only produce greenhouse gases that can also be removed from the atmosphere.
The enormous purchasing power of European consumers, within the world’s largest single market, plays a hugely important role in driving sustainability in business practices worldwide. European consumers are increasingly demanding sustainable products and services and, as a result, businesses are increasingly investing in sustainable initiatives to satisfy this market. This trend is particularly pronounced in the food and beverage industry, where consumer demand for sustainable products has led to a proliferation of organic products.
An electric future with multiple power sources
Renewable energy is arguably the most crucial element for a sustainable future. This includes using solar, wind, water, hydrogen and geothermal energy sources, as well as by some definitions nuclear. These provide electricity from nature, without major environmental impact. As we diversify our energy sources, we gradually eliminate reliance on fossil fuels and start to preserve our environment for future generations. Coincidentally there are often synergies between old and new worlds, as gas fields are repurposed for carbon capture, gas pipelines used for hydrogen and offshore technology refocused from oil platforms to wind turbine installations.
The local choice of energy technologies depends on factors such as location, geography, law, infrastructure and industrial needs. For example, the flat Netherlands is a somewhat less attractive location for a hydroelectric power installation than Norway.
Solar and wind
The Netherlands has many established and planned solar and wind power initiatives, such as huge offshore wind farms in its large and shallow sector of the North Sea. There are ongoing experiments with floating solar farms, between the wind turbines. These initiatives not only help to reduce the country’s dependence on fossil fuels, but also create jobs and generate revenue.
The Dutch government offers a range of subsidies and tax breaks for solar and wind energy projects, and is also working to improve the grid infrastructure to accommodate more renewable energy. In addition, the Dutch government is investing in research and development of new green technologies, such as solar-powered water pumps and solar-powered boats. The Netherlands is also a member of the International Renewable Energy Agency (IRENA), which promotes the use of renewable energy around the world.
Hydrogen is produced from water using electrolysis. The produced hydrogen can then used to power fuel cells. This is particularly attractive for energy hungry industries such as steel and chemicals. The Netherlands is making hydrogen an important part of its future energy equation. A hydrogen power pipeline is now operational in the Netherlands, and the country has plans to have a strong hydrogen-based economy by 2050. The Netherlands is also working on plans to use hydrogen to power vehicles and to heat homes. The progress being made in the Netherlands is an important step towards making hydrogen an important part of the future energy equation.
The Netherlands has a long history of using geothermal energy, with the first commercial installation dating back to the early 1900s. Today, there are a number of geothermal installations in operation, providing heat for homes and businesses. The future looks bright for the geothermal energy niche in the Netherlands, with continued growth in both the residential and commercial sectors. That is why the Dutch government actively supports this industry.
The Netherlands has a long history with nuclear power, dating back to the 1950s. The country currently has two operational nuclear reactors. The specialized Petten reactor is the world leader in the production of radioactive isotopes for medical purposes. The Borssele site produces about 4.5% of the country’s electricity. In addition, the Netherlands is home to several major nuclear organizations, including Urenco, producing enriched uranium fuel for nuclear reactors worldwide.
Looking to the future, it is clear that nuclear power will continue to play an important role in the Netherlands. The Dutch government has pledged to invest billions of euros in nuclear research and development over the next decade. The country has committed to developing 2 new reactors as a key part of this energy transition.
Start your sustainable business in the Netherlands
What is clear is that the world is at last making good progress towards a cleaner and more sustainable future. The Netherlands is playing a key role, as it historically has with earlier cultural, industrial, social and political revolutions inside and outside of Europe. Are you interested to get involved and start your own business in this field or do you have any other questions? Do not hesitate to reach out to us.