Climate and Energy Outlook 2020: achieving Urgenda reduction target 2020 is uncertain, Cabinet target for 2030 not yet in sight

KEV 2020 published under unusual circumstances

This KEV is published under unusual circumstances. The impact of the COVID-19 pandemic on Dutch society is rather diverse, and also has - at least in the short term - a major but uncertain impact on greenhouse gas emissions. Because of these special circumstances, the KEV pays additional attention to this year’s emission development.

Achievement of Urgenda target 2020 still uncertain

PBL has combined Statistics Netherlands’ data on the first half of 2020 with two emission scenarios for the coming months.

Under the High emission scenario, any further impact of COVID-19 remains limited, the last months of 2020 will be relatively cold and conditions - particularly related to coal and natural gas prices - will be favourable for electricity production in the Netherlands. The Low emission scenario is the mirror image of this, with a second lockdown, relatively high temperatures and less electricity production in the Netherlands.

In order to achieve the Urgenda target, emissions should not exceed 166 megatonnes (million tonnes) in CO₂ equivalents in 2020. Under the High emission scenario, emissions will reach 174 megatonnes in 2020, and under the Low emission scenario, this will be 164 megatonnes. It is therefore still uncertain whether the Urgenda target will be achieved.

Doubling annual emission reductions is needed to achieve the 2030 target

According to preliminary figures, emission reductions in 2019 were 17%, compared to 1990 levels. For 2030, a reduction of 34% percent is projected [30%–40% bandwidth], 15 percentage points below what is needed to achieve the 49% target. Policy measures introduced or discussed after May 1st are not included in this projection, however.

In the KEV, PBL concludes that, in order to achieve the government's target for 2030, annual emission reductions need to double, from 3 megatonnes per year in the 2010–2019 period to 6 megatonnes per year between 2020 and 2030.

Reduction particularly large in the power sector

Emission reductions are unevenly distributed across the five sectors (industry, built environment, power, mobility, agriculture and land use). Front runner is the power sector. Here, emissions will be more than halved by 2030, compared to 2019, due to a sharp increase in renewable electricity and the closure of coal-fired power stations. At the same time, this reduction is surrounded by uncertainties; emissions can fluctuate sharply from year to year, due to weather conditions and other circumstances related to the European electricity market.

Emission reductions in the other sectors are much smaller, as in those sectors, emissions mainly result from heat production. And while renewable electricity is expected to grow to 75% of total electricity consumption by 2030, renewable heat is expected to grow to only 13% of consumption.

Ever greater differentiation in average energy bill

A background report to the KEV discusses the energy bill for homeowners in 2030. Because, by that year, more houses are expected to be natural gas-free (current projections estimate that, by 2030, 85% of houses will be heated using natural gas, the remaining 15% from other resources), the expected energy bill was calculated for houses with central heating systems on natural gas and for those that are heated using electricity only. The bandwidths for both categories are large, as they relate to uncertain price and consumption developments.

For houses with natural gas heating, the energy bill is expected to rise slightly between 2020 and 2030. For all-electric housing, the energy bill will be significantly lower, but major homeowner investments are required for these homes to become all-electric.