Will government pay for corporate CO2 emission reduction?

In a meeting with the economic affairs ministry late last year, Tata Steel’s Dutch officer said he would pay out hundreds of millions of euros to reduce factory emissions. But there was one condition: the Dutch government would need to invest the same amount. This proposal comes in the midst of an ongoing global debate between corporations and governments over who should pay the bill to meet climate targets stipulated in the Paris climate accord.

Tata Steel, which is the largest corporate polluter in the Netherlands, said it would build a €500 million energy-saving substitute to its blast furnace it currently uses near Amsterdam, Tata Steel’s Dutch chief Theo Henrar told Reuters. But, for the investment to be “effective,” he said the government would also need to pay for hundreds of millions in infrastructure costs. This government expenditure would be used to create a carbon capture site below the North Sea, according to Tata. The corporation said high-ranking officials of the ministry viewed the proposal favourably.

Paul van der Zanden, spokesman for the economic affairs ministry, declined to comment on Henrar’s proposal. Though, he said a corporate carbon emissions tax was necessary to ensure companies reduced their footprint. An increasing number of politicians and voters want a tough carbon tax on corporations that pollute. However, many industrial companies say that such taxes will damage a country’s competitiveness. “The Dutch are trying to get companies to suddenly move faster than elsewhere in Europe,” Hans Gruenfeld, head of lobby group VEMW, said to Reuters. “There’s a chance that will only shift production abroad, without reducing CO2 emissions on an international scale.” Thus, companies are providing alternative strategies.

But, with the Netherlands acting as the home of many large corporations and Europe’s main seaport, the country is far behind its climate goals. The government pledged to cut its CO2 emissions in half from 1990 to 2030. However, by 2017, the nation only achieved a 13 percent cut. Additionally, while neighbouring Germany receives 17 percent of its energy from sustainable sources, the Dutch receive less than 7 percent. “The Netherlands is further behind on all of its goals than the rest of the EU,” Pieter Boot, the country’s top climate advisor, said to Reuters. “We have simply done too little in the past 20 years.” 


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