Government spent €4.4 billion on energy transition in 2024

Batteries for energy storage
© CBS
The government spent 4.4 billion euros to support renewable energy and help people reduce their energy consumption in 2024. In the same year, it received 26.5 billion euros from taxes on energy consumption, such as the energy tax and excise duty on motor fuels. This is reported by Statistics Netherlands (CBS) based on its recently published Government Accounts for the Energy Transition.

Spending on the energy transition includes subsidies, as well as tax rebates on energy consumption. This includes, for example, a discount on domestic connection fees, the free allocation of CO2 emissions allowances and, in 2023, a ceiling on household energy bills. Without these rebates, tax revenues would have been 7.5 billion euros higher. The government loses more revenue each year through tax rebates on energy consumption than it spends on promoting energy conservation and a sustainable energy supply.

60 percent of tax revenues relate to road transport

Of all taxes on energy consumption, 60 percent related to road transport in 2024: duty on motor fuels, tax payable on the purchase of a car or motorbike (BPM) and motor vehicle tax. When the VAT charged on excise taxes is included, the share rises to 63 percent. 20 percent came from the energy tax on electricity and natural gas.

In 2022 and 2023, less revenue was received from energy taxes. In 2023, a price ceiling on household energy bills was put in place to help consumers with increased energy prices. Taxes on CO2 (emissions rights) and airline tickets have been increasing in recent years.

Composition of expenditure on energy transition varies

Of total government spending on the energy transition in 2024, 1.5 billion euros went towards the subsidies for promoting renewable energy (known as the SDE) for businesses. 1.0 billion euros was spent on grants for making buildings more sustainable.

Many subsidy schemes are short-term, which means that the package of measures changes annually. The SDE is a longer-term scheme, but it is dependent on annual energy prices and the amounts spent therefore fluctuate. In 2022 and 2023, years when energy prices were high, SDE spending was relatively low.

Municipal spending on the energy transition in the form of specific grants from central government has increased significantly in recent years. In the period 2019-2024, these grants have increased from zero to 600 million euros. In addition, the government provided grid operator TenneT with additional capital in 2019, 2022 and 2023, partly in order to upgrade the Netherlands’ high-voltage grid. No additional capital was provided in the other years.