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pay little energy tax in the highest bracket, the tax encourages them to take only relatively inexpensive measures. Companies that consume more
than 10 million m
3
of natural gas per annum, for example, pay €0.20 per GJ in 2008. Saving measures that reduce gas consumption but cost
more than €0.20 per GJ are not financially interesting. Retail consumers, by contrast, are encouraged to take more expensive measures because
they pay far more energy tax per unit of consumption. Companies that consume between 5,000 and 170,000 m
3
of gas per annum, for example, pay €4.30 per GJ in energy tax. Whereas wholesale consumers will not
take gas saving measures that cost, for instance, €1 per GJ saved, retail consumers will consider measures costing as much as €3 or €4 per GJ
saved. Large consumers therefore do not take many relatively inexpensive measures while the high rates prompt retail consumers to
take expensive measures. With a view to national costs, this means that energy tax leads to unnecessarily expensive measures. The cost benefit
ratio is therefore less favourable than the estimated €0.24 per GJ and would be more favourable if the tax were distributed more evenly.
5.6 Synthesis of costs and benefits
Government policy has not prompted the manufacturing sector to make a large saving in its energy consumption during the period audited. We
investigated how much energy the individual policy instruments had saved and at what national cost. In view of the inevitable uncertainties
inherent in the assumptions, only relative indications are given here see table 6.
Table 6. Saving and the cost benefit ratio per GJ by instrument investigated in the period 1995-2008
Saving PJ relative to other instruments
Cost benefit ratio
Energy Investment Allowance EIA High
Moderate Energy tax
Moderate Favourable
CO
2
emissions trading system Low
Unfavourable Environmental Management Act
Limited Unknown
Benchmarking Agreement Very unfavourable
Multiyear Agreements MJA2 Unknown
Very unfavourable Source: Study conducted by CE Delft for the Netherlands Court of Audit. For underlying
figures, see audit methodology.
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The EIA has made the greatest contribution to energy saving. This instrument also has a high percentage of free riders. The relatively low
cost of the saving per GJ is directly related to the relatively low fiscal advantage of the EIA.
In comparison with the other instruments, energy tax has the lowest cost per GJ saved. The high marginal rates for lower consumption brackets
and the low marginal rates for higher consumption brackets, however, make the cost unnecessarily high. Wholesale consumers in particular are
not encouraged to take relatively inexpensive measures. The effect of the CO
2
emissions trading system depends largely on the price of a CO
2
emission allowance and the extent to which entrepreneurs consider the system to be permanent. In the period 2005-2007 the
system probably did not contribute to energy savings in the Netherlands. In the period that followed the system did produce energy savings but at
a higher cost than the EIA and energy tax. The longer the system is in operation, the more favourable the cost benefit ratio is expected to be.
Implementation of the Environmental Management Act has had an unknown but limited effect. The instruments costs are unknown.
The first generation of multiyear agreements covered the greater part of manufacturing energy consumption. Energy savings were certainly
achieved in this period but the costs cannot be determined. For a large number of the participating companies these multiyear agreements were
succeeded in 1999 by the Benchmarking Agreement. There is no convincing evidence that this agreement resulted in energy savings. Costs
were incurred, however. The agreements conditions were relaxed upon the introduction of the emissions trading system in 2005. The second
generation of multiyear agreements since 1999 apply to a far smaller proportion of manufacturing energy consumption. The participants,
especially medium-sized companies, found the instrument to be an incentive that contributed to energy saving investments. The instruments
effects are difficult to determine but our audit indicates there was a relatively small additional saving in comparison with the other
instruments. The cost of the multiyear agreements can only be partially determined: the investment costs incurred by the companies are not
known; the overhead and implementation costs came to €20 million.
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6 Consequences for climate and
energy policy
In this chapter we consider the implications of the underachievement of the energy saving target for the other national and EU goals of climate
and energy policy.
6.1 Relationship between climate goals
In the period covered by this audit, Dutch climate policy had three targets for 2020: 20 improvement in energy efficiency, 30 reduction in CO
2
emissions relative to 1990 and 20 share of renewable energy. These targets are closely related to each other. Both energy efficiency energy
saving and renewable energy will reduce the need for fossil fuel. This will in turn lead to a reduction in emissions of CO
2
and other substances. Additional measures for the cleanest possible combustion or storage of
CO
2
will reduce emissions further. This sequence is shown in figure 11.
