Research into the beneficial impact of abolishing fossil subsidies

In response to the Dutch Lower House motion by Kröger et al, the Ministry of Economic Affairs and Climate Policy (Minsterie van Economische Zaken en Klimaat) commissioned CE Delft to conduct a study into the beneficial effects of abolishing fossil energy subsidies.

New market opportunities arise when fossil subsidies are phased out and a level playing field is created regarding the tax treatment of energy and raw materials (non-energy use of fossil energy). The main competitive effects on existing businesses (negative for the Dutch economy) have so far been identified on the basis of a series of impact assessments. While abolishing fossil subsidies is detrimental to Dutch companies that are heavily dependent on fossil energy, it also provides opportunities for a strengthened business case for companies that are less dependent or non-dependent on fossil raw materials. Besides companies that are now part of the circular economy, this also involves companies that will be part of the circular economy in the future. The aim of this study is to qualitatively explore these positive effects. The study focuses on the social costs resulting from CO2 emissions.

The study is part of the Taxation in Social Perspective report (Rapport Belastingen in maatschappelijk perspectief) that was sent to the Lower House on 12 February 2024.