The tax on natural gas is going up. The outgoing government is imposing a heavy energy tax on large-scale consumers in particular. In the Spring Memorandum, an increase of 22,4 percent was announced for the third, fourth and fifth brackets. An additional increase of 2030 percent will follow in 2,7. These are measures that should encourage major consumers to look for sustainable alternatives to natural gas. Hydrogen, for example, for which a separate reduced rate applies.
So much for a logical approach from a climate perspective: make fossil fuels more expensive and renewables cheaper.
But that kite only partially flies. The tax authorities find it difficult to distinguish between biogenic and fossil. In the “Taxes in Social Perspective Report” (February '23), the government says:Encouraging the production of biofuels through taxation is complex. The physical characteristics of fossil fuels are often identical to those of biofuels. This requires extensive administrative systems to trace the origin of fuels throughout the chain."
In other words: difficult traceability prevents tax benefits. At least with biofuels. What about the built environment?
The above Report states in no uncertain terms: “A higher consumer price for natural gas is effective for making the built environment more sustainable.” This builds on an (IBO) Policy Advice from early 2023 that advises to further increase the energy tax rate on natural gas for citizens, social organizations and companies from a sustainability perspective towards 2030.
For many years now, energy from biogenic residual flows has been linked to the tax on natural gas. Green gas as a sustainable alternative is therefore not cheaper at all for citizens. The price increase for fossil fuels applies fully to green gas: this year there has already been a tax increase of 11 cents per m3, almost half of the total gas rate! It seems likely to me that the argument of traceability for biofuels also applies here. However, that can be refuted quite easily. From 2025 there will be a green gas blending obligation for the built environment. Energy suppliers can indicate exactly how much sustainable gas has flowed to households and small businesses. This makes a separate tax rate administratively enforceable. Not as a benefit for an individual customer, but as a generic discount on the gas rate, linked to the annual intended addition.
A separate tax rate for green gas is extremely important to stimulate the demand for green gas and increase support for the Blending Obligation. Various MPs are already pointing out the undesirability of higher costs for citizens as a result of the Blending Obligation. And the percentage is traceable based on the agreed volumes. I will therefore end with an appeal to politicians to finally initiate this differentiation between natural gas and green gas!
About the author
Marieke van der Werf
Advisor in the field of energy and circular economy
Marieke van der Werf is an advisor at the intersection of sustainability and politics. After her membership of the Chamber, she joined Bureau Publyon, Public Affairs and Corporate Communications as a partner. Marieke has specialized in energy and the circular economy and advises, among others, the Green Gas Platform. She is also chair of the CCU Alliance and initiator of the Negative Emissions Task Force, where biogenic CO2 plays an important role. In addition to her consultancy work, Marieke fulfills supervisory roles at, among others, the Frisian Energy Fund and Spaarnelanden BV.
