The sustainability of Dutch industry is a process of trial and error. While projects are booming one minute, billions in subsidies remain unused the next. This pattern is evident in the latest figures for the Sustainable Energy Production and Climate Transition Incentive Scheme, or SDE++ for short. A significant portion of the budget intended to support industry in the energy transition remained unused last year. This unexpected surplus of billions casts a critical light on the gap between policy and practice.
Four and a half billion euros on the table
Of the total available budget of eleven and a half billion euros for the SDE++ scheme in 2024, almost half has not been utilized. The Netherlands Enterprise Agency (RVO.nl) approved applications totaling over seven billion euros. Although the scheme subsidized 2024 projects by entrepreneurs in 640, a net amount of four and a half billion euros remained unspent. The reason for this is complex, but points to a disconnect between the subsidy offer and market reality. It demonstrates that it is increasingly difficult for the government to estimate the financial needs of the industry.
Full electricity grid is the main hurdle
One of the most striking developments is the declining number of applications for subsidies related to electricity generation. Historically, most applications were submitted for solar panels on the roofs of large companies. But this trend is changing. Although solar panels still constitute the largest group, with 219 approved projects, the amount of subsidies awarded halved compared to the previous year. The main bottleneck is the overcrowded electricity grid, also known as grid congestion. In many places in the Netherlands, the electricity grid is unable to handle the additional capacity of new solar and wind energy. As a result, businesses are increasingly less likely to connect their installations, making investments in solar energy projects significantly less attractive.
The rise of heat and other technologies
The stagnation in electricity projects is offset by a remarkable growth in applications for other sustainable technologies. Projects focused on heat and molecule production, in particular, are gaining momentum. In the low-temperature heat category, 85 projects were approved. The growth of air-to-water heat pumps and aquathermy is particularly noteworthy, technologies that contribute innovatively to the sustainable heating of buildings and greenhouses. Applications have also increased in the high-temperature heat category, particularly for electric boilers used to make industrial processes more sustainable. This shift demonstrates that companies are seeking alternative ways to become more sustainable now that electricity generation options have become more limited.
The arrangement does not always fit in practice
The fact that billions are once again being left unused indicates that the SDE++ scheme is not always optimally aligned with industry practices. Rob Gosselink, policy advisor for Climate and Energy at the VNCI, the Royal Association of the Dutch Chemical Industry, states that this is a worrying development. Because the scheme plays a key role in making the industry more sustainable, it is crucial that companies can actually utilize the subsidies. The unspent billions demonstrate that Dutch policy and practical feasibility must be further aligned if the Netherlands is to achieve its climate and energy ambitions. The SDE budget for 2025 has now been reduced to eight billion euros, indicating that the government has heeded market signals.
The SDE++ will reopen on October 7 and close on November 6. More information can be found on the website of the RVO.
