Dutch climate expenditure audit reveals inconsistencies

The Dutch government does not provide a "clear and complete" overview about the state's climate expenditure, while certain fossil fuel subsidies are "at odds" with domestic climate goals, according to a report by the Dutch court of audit.

The court of audit presented its findings to the Dutch parliament on 25 January, noting that the three ministries — economic affairs and climate policy, finance, and climate and energy policy — involved in reporting the state's climate expenditure did not provide consistent information. Some of the costs reported also differed from official budgets.

This included reporting discrepancies of around €200mn ($218mn) per year in some instances, according to the court.

The government earmarked around €6.8bn to be spent on climate measures in 2023, which could double over the next year if a proposed climate fund of €35bn is approved, which is why the court started the investigation it said.

The court also noted that expenditures tied to climate spending abroad were also not included in official figures.

Climate and energy minister Rob Jetten acknowledged inconsistencies between the ministries climate reporting and promised that the standards would improve.

In addition, the court noted that tax schemes for the fossil fuel industry not included in official figures are "difficult to reconcile with the objectives of the Paris agreement". The 2015 Paris climate agreement calls for global warming to stay "well below" a 2°C rise in pre-industrial temperatures and ideally limit it to a 1.5°C rise.

According to the state budget memorandum, a handful of tax schemes designed to benefit the fossil fuel industry will reduce tax revenue by €4.6bn in 2023, which includes tax exemptions for energy-intensive processes, the input exemption from the coal tax for power generation and the degressive tariff structure for electricity and gas. "The court of audit had found in a previous audit that ministers provided parliament with only limited information on the effectiveness of tax schemes, despite the substantial loss of revenue," the report said.

At the same time, the government committed to ending direct financial support to foreign fossil fuel projects by 2023 – as it had deemed it incompatible with the climate objectives of limiting global warming to 1.5°C against pre-industrial levels.

Dutch export credit agency Atradius — in charge of the country's public financing for foreign fossil fuel projects — ended all financing for export credit insurance as of this year in line with the Glasgow pledge made during the UN climate conference Cop 26 in 2021, while certain exemptions for oil and gas projects remain in place.

Projects that ensure European energy supply security by reducing "unwanted" dependencies on Russian oil and gas are among those exemptions granted, although the exceptions are to be reassessed this year.

By Florence Schmit