Green Deal for carbon credits in Dutch non-ETS sectors

On 11 May of this year, the Netherlands Minister of Environment, Sharon Dijksma, signed a Green Deal with 17 organisations on a pilot for domestic carbon credit creation and trading in Dutch non-ETS sectors. The deal helps to establish methodologies for accounting of emission reductions for Dutch projects to be applied to a portfolio of projects. Realised emission reductions will be issued as carbon credits. Potential buyers are Dutch organisations that aim to reduce their carbon footprint.

Around 400 Dutch companies are covered by the EU Emissions Trading Scheme (ETS). In addition to the ETS, several Dutch organisations expressed interest in a market-based instrument for trading of emission reductions achieved via projects in non-ETS sectors. With that, they would be able to add financial value to their projects based on emission reductions achieved. 

Currently, it is possible for project developers to have their emission reductions certified in a voluntary market (where buyers of carbon credits have voluntarily agreed to reduce their carbon footprint). However, in this market, there is a wide range of methodologies and certification procedures which does not make the market transparant and which runs the risk of carbon credits entering the market which are based on non-additional emission reductions (i.e. the project does not need the value of the carbon credits to move on) or which lead to double counting issues (e.g. one emission reduction is accredited twice or more times, including in the ETS market).

Therefore, under the Green Deal, parties will:

1. Create a metholodogy rulebook with principles for baselines, additionality and doube counting, and adopt methodologies for different project categories that adhere to these principles.

2. Create a portfolio of concrete projects which will apply these methodologies and generate carbon credits accordingly.

3. Create a market place where demand and supply in the Netherlands for carbon credits can meet.

4. Create an institutional framework to enable the transformation of the pilot system under the Green Deal to a fully operational non-ETS carbon market in the Netherlands.

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