Dutch industry struggles with energy costs

In the world of energy and industry, the Netherlands faces a complex challenge. While heavy industry struggles with rising electricity costs, a recent report comes with a clear message: Dutch entrepreneurs pay considerably more for electricity than their competitors in neighboring countries such as Belgium, Germany, and France. The discrepancy can be as high as 66%, a situation that experts say is unsustainable.

This unequal situation puts the Netherlands at an economic disadvantage and risks companies moving their production abroad. Although some companies, including zinc factory Nyrstar and aluminium producer Aldel, have already closed or relocated, the echoes of their decisions sound like a grim warning of what may come.

The causes of this problem are multifaceted. On the one hand, the Netherlands has abolished discounts for heavy industry, while other countries continue to offer them. On the other hand, the higher grid tariffs, partly due to the necessary energy transition and the step towards electrification after the reduction of natural gas use from the Groningen field, are driving up the costs.

The search for solutions is complex. It is proposed to partly take the financing of the expansion of the electricity network on the shoulders of the government, instead of having it paid for entirely by the grid operators and thus the users. This could temper the increase in grid tariffs and make the transition to electrification socially desirable and economically more feasible.

In addition, the call for a more level European playing field is becoming increasingly louder. The Dutch government has requested the European Commission to take action, but until then a reduction in grid tariffs, financed from the treasury, seems to be a possible interim solution. This idea is supported by the business organisation VNO-NCW, which emphasises the urgency of the situation.

The dilemma facing the Netherlands illustrates the complex balancing act between striving for sustainability, maintaining economic competitiveness, and ensuring social fairness. It requires policy adjustments at both national and European level, to manage energy costs without disproportionately burdening industry or consumers. Time will tell how this balance can be found, but one thing is clear: action is needed to keep the Netherlands competitive and sustainable in the energy market.