This report by CE Delft, commissioned by Natuur & Milieu, examines how Dutch industry can reduce its CO₂ emissions in order to comply with the CO₂ cap of the European Emissions Trading System (EU ETS1). It is based on the current structure of ETS1, which means that no new emission allowances will be issued from 2040 onwards. The report explores two scenarios: ‘Current Trends’ and ‘Direction and Innovation’, which outline different pathways for phasing out fossil fuels and scaling up sustainable alternatives in Dutch industry. The results show what these developments imply for:
The ‘Direction and Innovation’ scenario brings industry significantly closer to the ETS targets than the more conservative ‘Current Trends’ scenario, although neither scenario succeeds in achieving zero CO₂ emissions. Residual emissions are expected to remain in 2040, particularly in the steel, chemicals and refining sectors. Demand for fossil fuels and feedstocks declines in both scenarios, falling to one third of current consumption in ‘Direction and Innovation’. The results also indicate that the production of renewable electricity, hydrogen and green gas will need to increase substantially in order to support the decarbonisation of industry.