The Netherlands to introduce a carbon price floor

The Dutch parliament will likely vote on a minimum price for carbon emissions – a so-called carbon price floor – before summer.

The discussion regarding a carbon price floor, a minimum price on carbon emissions, has been going on for years in several European countries. So far, the UK is the only country to implement such a system, but the topic has, as a part of the global climate debate, become an increasingly debated political issue over the years.

Now it looks as if another country is about to finalize a carbon price floor. In the Netherlands, the parliament is set to vote on the implementation before summer. The Dutch price floor will include the country’s power sector and the plan is, that it will take effect starting on January 1, 2020.

The final details regarding the scheme have not yet been published, but it is expected that the price floor will start on around 12 EUR/t, and increase steadily before reaching 43 EUR/t in 2030. The price floor is set to function concurrently with the Dutch membership of the European market for CO2 quotas, the ETS.

If the Dutch as expected approve a carbon price floor with a startup already in 2019, it will increase the pressure on other European countries to work on a similar scheme. Back in December last year, a group of nine EU member states, including Denmark, Sweden and Finland, urged the EU to implement a common carbon price floor to complement the existing quota market.