Berenschot supports OECD climate-neutral manufacturing

Berenschot supports OECD on policies for climate-neutral manufacturing

Berenschot supports OECD on policies for climate-neutral manufacturing

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29 November 2021

On behalf of the European Commission the Organisation for Economic Cooperation and Development (OECD) has measured the consistency and cost effectiveness of policy instruments adopted by the Netherlands to reach carbon neutrality in its manufacturing sector by 2050.

For its policy paper the OECD asked Berenschot to review the four sectors in the Netherlands: metals, refineries, chemicals and food processing.

Pathways to decarbonisation

Berenschot outlined the current situation in these four industries and the most feasible pathways to decarbonisation. These were then tested by representatives from the sectors. A key outcome of Berenschot’s analysis is that decarbonisation of Dutch manufacturing is reliant on technologies which are not yet mature and which require support for further development or upgrades. The need for renewable electricity generation rises significantly in all scenarios and Carbon Capture and Storage (CCS) will still be needed in 2050. Finally Berenschot concluded that more than half of the decarbonisation relies on technologies that require development of new infrastructure. Berenschot then verified these pathways to decarbonisation by comparing them with other existing decarbonisation scenarios. The overall conclusion was that differences between the scenarios were related to the modelling methodology used (top-down or bottom-up).

More balanced approach

The OECD’s produced this report in relation to criticism of how the Netherlands is subsidising the energy transition. There is support for projects which yield the highest carbon reduction in the short term but an absence of subsidies for investment in long-term technical solutions to decarbonise manufacturing. Subsidies which are much needed, believes Berenschot. A more balanced approach to technological support is required, with more direct support for emerging technologies - such as green hydrogen production - which have an important role to play in a carbon-neutral industry in the Netherlands.