The government has introduced both a mandatory obligation and a series of grant schemes to promote energy savings. In the overwhelming majority of cases this approach works well, but businesses sometimes receive grants for measures they were already obliged to take. This Netherlands Court of Audit comes to this conclusion in a report published today, Energy saving, incentivise or oblige?
The energy saving obligation was introduced in 1993 and is the principal instrument applied by the Minister of Climate Policy and Green Growth (KGG) to compel businesses and institutions to cut their energy consumption. Companies that consume large amounts of energy or gas are required to take energy saving measures that pay for themselves within five years. In 2024 the Court of Audit found that the Minister of KGG was insufficiently aware of the obligation’s impact on energy savings. Expected savings were probably not being achieved, partly because the minister did not know which companies were subject to the obligation.
€1.2 billion in grant and tax schemes
In addition to the energy saving obligation, which applies to roughly 107,500 businesses and institutions, the government has introduced at least 17 grant and tax schemes to encourage all Dutch businesses and institutions to take energy saving measures and cut their carbon emissions, at a cost in 2024 of at least €1.2 billion.
11 of the 17 schemes include measures to avoid overlap with the obligation. This has been done by restricting the target group, excluding certain measures, or by setting technical conditions that make overlap virtually impossible in practice.
4 schemes overlapped with the energy saving obligation: BOSA (for the construction of sports facilities), EG (for greenhouse horticulture), EIA (the energy investment allowance), and ISDE (sustainable housing). The audit found that public funds were spent on energy saving measures that businesses were already obliged to take because they would pay for themselves within five years. This money was not spent efficiently.
More than €50 million
Precisely how much money is involved cannot be determined, mainly because the Minister of KGG does not know which businesses are subject to the energy saving obligation. The Court therefore made its own estimate of the financial overlap. The maximum overlap peaked at 4.7% of the schemes’ costs in 2023 – that is, up to €51.4 million of the nearly €1.2 billion spent on grant and tax schemes. In other years, the risk of overlap was lower.
Limited overlap with energy-saving obligation
In millions of euro's
The figure shows the financial value of government incentives to save energy, indicated by the line. Expenditure increased from €286 million in 2019 to €1,200 million in 2024. The shaded area in the figure represents expenditures that overlap with the energy saving obligation. There is a minimum and a maximum overlap in each year. The minimum overlap increased from €0.7 million in 2019 to €9.6 million in 2023 before falling to €2.1 million in 2024. The maximum overlap rose from €5.2 million in 2019 to €51 million in 2023 and then fell to €44.4 million in 2024.
Barbara Joziasse, member of the Court of Audit’s Board, explained the figures: “Overall, the financial overlap is relatively limited. In the year it was the highest, 2023, for every €21 of obligatory spending there was an overlap of €1. In other years the ratio was even smaller. Nevertheless, it still represents inefficient use of public money. The government ought to be prudent with taxpayers’ money and we encourage the minister to address these irregularities.”