EU Climate Policies Drive Major Shift in Dutch Economy Towards Greener Sectors
The Hague, Tuesday, 23 September 2025.
EU climate policies, including ETS and CBAM, are set to transform the Dutch economy by 2035, reducing reliance on fossil fuels and impacting competitiveness in emission-intensive industries.
The Role of EU Climate Policies in Economic Transformation
The European Union’s climate policies, notably the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM), are pivotal in reshaping the Dutch economy. These policies aim to reduce greenhouse gas emissions by putting a price on carbon, thereby incentivizing industries to adopt cleaner technologies. The Dutch economy, heavily reliant on emission-intensive industries, faces a shift towards greener sectors, such as services, as these policies increase the cost of carbon emissions [1][2].
Transitioning Towards Renewable Energy
A significant consequence of these policies is the anticipated reduction in fossil fuel imports due to an increased reliance on renewable energy sources. The GREEN-R computable general equilibrium model forecasts a substantial decline in fossil fuel imports, which will enhance the trade balance by decreasing dependency on foreign energy supplies [1][3]. This transition is expected to be bolstered by government initiatives supporting renewable energy development, further reducing reliance on imported fossil fuels and improving energy security [2][3].
Impact on Competitiveness and Employment
While the shift towards greener sectors is beneficial for sustainability, it presents challenges for industries subject to ETS. The increased production costs could affect their international competitiveness, potentially leading to carbon leakage, where companies relocate to regions with less stringent emission regulations [1][3]. However, the CBAM aims to mitigate these effects by imposing tariffs on carbon-intensive imports, thereby protecting EU industries from unfair competition [2][3]. Despite these challenges, the overall impact on employment is expected to be limited, though specific sectors may experience job losses, particularly in engineering roles [1].
Future Prospects and Policy Implications
The ongoing transformation of the Dutch economy requires careful policy planning to balance environmental goals with economic stability. The government is encouraged to actively support the energy transition through subsidies and standards that promote renewable energy adoption [3]. As the service sector grows, the economy is likely to see a shift in labor demand, necessitating retraining and education initiatives to equip the workforce with skills suited to new industries. The success of this transition will depend on the effective implementation of EU climate policies and the Dutch government’s ability to adapt to these changes [2][3].