PHB: Analysis of the Dutch Fuel Transition Obligation - Market impacts and role of electricity in the ERE-system | 2026

Background

• The analysis aims to provide input to discuss the Dutch set-up of the Fuel Transition Obligation (BTV) and think through what this can mean for the pricing of Emission Reduction Units (EREs) in this market-based system
• The Netherlands sets fuel suppliers an annual mandatory target per sector (land, inland shipping, maritime shipping) for the supply of renewable energy in the total energy supplied to transport.
• Booking renewable electricity for the creation of an Emission Reduction Unit (ERE) that fuel suppliers can purchase in order to meet the mandatory targets in the Fuel Transition Obligation has a few consequences.
• Certainly, also when the scheme is extended, in this form, after 2030, we see an unintended effect on achieving the Dutch climate goals because too high (and rising!) fossil CO₂ emissions result in the Dutch transport sector.
• Also, including electricity in this market instrument in this way could have a potential impact on the future value of the EREs. These implications for the price of an ERE could arise earlier.
• This in turn may have an impact on the way in which the roll-out of the charging infrastructure for electric vehicles is financed.

Key findings

• The growth of electric vehicles between now and 2050 will lead to a reduction in energy consumption
• And it leads to a shift inbalance from fuels to electricity and a shift from fossil to renewable energycarriers 
• Renewable electricity as partof the fuel transition obligation leads to several effects:
  
  • Due to the growth of electric vehicles and the growing share of renewable electricity in Dutch power production, there will be an abundance of electricity-EREs from 2032 onwards(assuming that the system is continued after 2030),
  • This is expected to lead to a dilution of the value of the EREs
  • This may put pressure on the financing of the roll-out of the public charging infrastructure

• The EREs from renewable electricity lead to the achievement of the BTV policy objective, but do not in fact replace the fossil liquid/gaseous fuels still needed for the remaining fleet of internal combustion engine vehicles. They are displacing the use of renewable rather than fossil fuels.
• The result is therefore more residual fossil emissions than complying with the BTV makes it seem  
• In order to achieve the emission reductions targeted by the BTV, in addition to the use of electricity in electric vehicles, an additional volume of renewable fuels is required; this volume must be equal to that resulting from the BTV
• An important question arising from this analysis is whether the combined approach with electricity and fuels in the BTV should be revised, from the point of view of reducing physical fossil CO₂ emissions.

Download

You can find the slides with the analysis that was presented during the workshop with Platform Members and a broader network by clicking on the right hand side or here.