Recently, the Dutch House of Representatives voted in favor of the 'Fiscal Measures Horticulture Act.' A majority also agreed with a longer phase-out path for the horticultural rate and an annual evaluation of the CHP measures.
Abolishing the reduced VAT rate for ornamental plant cultivation did not pass, nor did a proposal from the GroenLinks party to abolish the reduced horticultural rate as early as January 1, 2024. That party, together with the PvdA, did submit an initiative bill to "abolish fossil subsidies before 2030".
Continuously voting on motions, amendments, and laws deep into the night is 'crazy.' These were the words of House of Representatives member Pieter Omtzigt. Yet it happened.
"We received signals during the day that it could very well be very late," laughs lobbyist Jesse Schevel of Glastuinbouw Nederland. He did not stay up for the vote but went to work early this morning. "We are happy that everything still went well by the book and also about the outcome. It really gives growers a chance to act better, and the impact of the measures has been mitigated."
In short, horticulture will continue to benefit from a reduced natural gas tariff for five years longer, until 2035 instead of 2030, as the government first proposed. This will allow more time to roll out sustainability initiatives such as even more geothermal energy.
There will, however, be a CO2 tax. That was an important condition of the cabinet and also of the European Commission. The lobbyist called the amounts included in the adopted amendment by ChristenUnie, CDA, and VVD 'well manageable.'
There was intensive cooperation between the three parties. "On October 5, critical questions about the bill were immediately raised across the House of Representatives. Subsequently, these three parties took up the gauntlet to limit the impact of the bill as it stood."
Originally, the abolition of the reduced horticultural tariff was even supposed to take place as early as 2025, as stated in the coalition agreement as well as in the Dutch Resilience and Recovery Plan. "The idea behind this is rapid abolition of fossil subsidies," the lobbyist knows. "A lot of attention is paid to the financial aspect, but in our opinion, not enough to the social side."
Glastuinbouw Nederland pointed this out to politicians. "We said to the House of Representatives, 'Know what you are doing.' It seems very easy to stop fossil subsidies, but it is a lot more nuanced."
Reducing greenhouse gas emissions is a key goal behind government measures. For horticulture, a covenant of agreements has also been made around this. "That covenant now helps us in the conversation with politicians. We could point out that without adjustments, the bill would undermine the covenant."
The question for the greenhouse lobby was whether to go for extension and reduction or full extension of the reduced horticultural tariff. "We noticed that the European Commission was open to the latter because, for horticulture, we put the CO2 sector system against it. For the European Commission, meeting those emission targets is important."
State Secretary for Taxation and Fiscal Affairs Van Rij hinted several times in recent days that it is not yet clear that Europe will also agree to extend the phase-out path for the horticultural tariff. Nevertheless, Jesse assesses the chances favorably. "The discussion on this has been going on for some time. Our signals are positive." He does understand the state secretary's caution. "After all, if Europe does not agree to an extension, the law will have to be looked at again. But we are not assuming that."
Finger on the pulse
First, it is now up to the Senate to consider the law. That is expected to happen before the end of this year. If the Senate also votes in favor, the law will be introduced. A new deadline to keep an eye on is the tariff study in 2024 for the CO2 levy, as included in the adopted amendment, and the weighing moment for the CHP measure, on which an amendment by the aforementioned parties was also adopted.
The weighing moment is also a way for politicians to keep their finger on the pulse of the sector, which itself has explicit sustainability ambitions. The government is also helping in this regard by providing subsidies. "Without fiscal measures, those financial incentives in the form of subsidies for sustainability would not come about either," Jesse knows.
"The weighing moment is important to let amounts flow back to the sector if it turns out that the proceeds from the measures are too high to achieve the agreed emissions target after all." That stands at 4.3 megatons in 2030. By 2040, horticulture has set itself the goal of being the first sector in the Netherlands to be climate-neutral.
The GroenLinks/PvdA initiative bill may be considered by the new House of Representatives after the November 22 elections. Until then, the House is on election break. Hence, the past few weeks and certainly this week have been very busy on the legislative front.