The Dutch government is firmly defending the EU’s 2027 ETS2 rollout for buildings and transport and advocating against the inclusion of international carbon credits and carbon dioxide removals (CDR) within the established ETS1. Instead, The Netherlands proposes separate, sovereign CDR procurement mechanisms to maintain strong decarbonization incentives and avoid mitigation deterrence.
A Firm Stance in a Sensitive Debate
In a decisive move that underscores its climate ambition, the Dutch government has come out strongly against two proposals currently circulating within EU climate policy circles:
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Reopening or delaying the implementation of ETS2, the EU’s new carbon market for buildings and road transport.
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Allowing international carbon credits or carbon dioxide removals (CDR) into the compliance structure of ETS1, the existing scheme for industry and power.
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As the European Commission prepares for a broad mid-decade review of EU climate policy, the Netherlands is taking a principled stand to protect market integrity and regulatory ambition.
ETS2: No Time for Second-Guessing
The Netherlands warns that revising ETS2 before its launch in 2027 could significantly derail EU decarbonization targets. The system, finalized after intense negotiations, is designed to regulate emissions from two of the EU’s most carbon-intensive and policy-resistant sectors: buildings and transport.
Dutch officials argue that:
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The system must launch on schedule and remain untouched in its structure.
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Reopening the debate would send the wrong signal to markets, industries, and citizens.
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Policy certainty is crucial to unlock investments in decarbonizing these sectors.
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In their view, ETS2 is not just another regulatory instrument — it’s the EU’s flagship policy for bringing emissions pricing into citizens’ everyday lives.
Keep International Offsets & CDR Out of ETS1
The Dutch government is also opposing the idea of allowing:
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International offsets (e.g. CDM, REDD+)
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Future CDR credits (from removals technologies)
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Their rationale is rooted in the environmental integrity of the cap-and-trade system:
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Letting emitters rely on offsets from outside the ETS could dilute the carbon price.
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It risks undermining real emissions reductions in Europe.
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There’s concern about “mitigation deterrence”, where removals might substitute reductions.
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Instead, the Dutch prefer that CDR be developed under separate, government-led frameworks with strict quality and permanence standards.
Dutch Advisory Council on CDR: “Act Decisively, Yet Prudently”
The Dutch Advisory Council on Climate Policy (WKR) recently published a report urging caution around integrating CDR into compliance markets. Their recommendations include:
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Supporting permanent removals only (century-scale storage).
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Developing public procurement schemes and targeted subsidies.
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Keeping CDR as a complementary measure — not a shortcut.
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They also warn that CDR can come with hidden costs:
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High land use and energy requirements,
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Potential social trade-offs,
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Challenges in MRV (Monitoring, Reporting, and Verification).
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A Clear Divergence Within the EU
While the Dutch hold a strict line, other member states — notably some German parties — are more open to integrating limited CDR or international credits in future ETS phases. The broader discussion is expected to intensify ahead of:
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The 2026 ETS review, where Phase 5 will be shaped.
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The 2027 launch of ETS2, which could become a model or a cautionary tale.
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The divergence sets up a possible confrontation between environmental integrity advocates and flexibility supporters.
