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Strict controls on nitrogen emissions in the Netherlands are undermining the EU’s efforts to fight climate change, said the outgoing chief executive of Europe’s biggest port.
Allard Castelein urged Dutch politicians to find solutions to an emissions cap that is putting about €10bn of green technology investment in Rotterdam “at risk”.
The projects, including green hydrogen and biofuels plants, would reduce carbon dioxide emissions by 10mn tonnes a year, he said. But permits for developers to emit nitrogen oxides and nitrates during the construction process have become hard to obtain after a court ruling that the Netherlands had breached sustainable levels of emissions.
“All these manufacturing sites need to be up and running in the next few years,” Castelein told the Financial Times. “There is a 2030 climate target. We have no time to lose. We need a long-term solution.”
The EU has promised to cut greenhouse gas emissions between 1990 and 2030 by 55 per cent. The bloc emitted 3.2tn tonnes of CO₂ equivalent in 2021.
Castelein said that with Prime Minister Mark Rutte running a caretaker administration after the collapse of his coalition government this month, parliament had to find a solution urgently. Plans to reduce nitrogen levels by buying out farmers and closing some industrial plants are unlikely to proceed until after elections in November.
The proposals provoked violent protests by farmers and contributed to a defeat for the coalition in provincial elections in March.
“We cannot afford to sit idle and push this on to the next government,” Castelein said. “Parliament needs to take responsibility and resolve the nitrates situation.”
The ruling, upheld by the supreme court in 2019, said the Netherlands must reduce excess nitrogen in vulnerable natural areas. Nitrogen compounds such as ammonia stimulate the growth of algae and other invasive species, crowding out indigenous plants.
To secure permits, some developers buy farms to close them or reduce emissions from other operations. Rotterdam port has installed renewable electrical hubs to power ships while they are docked so they can switch off their engines, freeing up some permits.
In the past year Shell has announced a €1bn hydrogen production plant, Europe’s biggest, while Neste has committed to a €1.9bn biofuels unit at the port. Rotterdam wants to attract four more hydrogen plants of similar size powered by renewable energy and build pipelines to transport it but Castelein said the current system of permits and offsets is stalling further investment.
Rotterdam contributes €63bn a year to the Dutch economy, 8.2 per cent of the country’s GDP, and handles more than 10 per cent of the EU’s freight by volume.
Castelein warned that investors and foreign enterprises were concerned about the Netherlands’ investment climate after the nitrogen crisis and coalition’s collapse.
“It had predictability of government, financial stability and openness. Once that reputation is lost it is very hard to regain. If these issues are not resolved that is at risk.”
Castelein said, however, that Rotterdam would retain its status as the EU’s biggest port. “Every scenario we have witnessed is showing an increase in trade.”
He said bulk fuels such as LNG and hydrogen would lift volumes, and also forecasts a 50 per cent increase in container traffic from current levels of about 16mn 20-foot equivalent units a year.
Castelein said there was still little evidence of companies moving production hubs from China to countries such as Vietnam and Malaysia. “It is being talked about in boardrooms but little has happened yet.”
However, the US’s and EU’s drive to favour “strategic autonomy” and resilience in areas such as green technologies will add to inflation, he said.
“Trade flows find the most efficient route. If you diversify supply or favour domestic production we will see increased costs in part of the supply chain. That will be passed on to consumers.”
