Netherlands’ recovery and resilience plan

RRF FUNDED PROJECTS IN NETHERLANDS

WHAT’S IN THE PLAN?

The reforms and investments in the Dutch plan, are helping the Netherlands become more sustainable, resilient and better prepared for the challenges and opportunities offered by the green and digital transitions. Following Council approval of the Dutch plan on 4 October 2022, the Netherland’s recovery and resilience plan was updated on 24 October 2023 also to introduce a REPowerEU chapter.

^{*The plan is entirely financed by RRF grants}

Key figures for the plan:

• 28 investment streams and 22 reforms
• 55% of the plan will support climate objectives 
• 26% of the plan will foster the digital transition.

The transformative impact of the Netherlands’ plan is the result of a strong combination of reforms and investments which address the specific challenges. The reforms address bottlenecks to lasting and sustainable growth, while investments are targeted to accelerate the transition towards a more sustainable, low-carbon and climate-resilient economy, to maximise the benefits of the digital transformation and to strengthen economic and social resilience and the cohesion of the Single Market.

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.

The Netherland’s plan now includes one reform and one investment to reduce its reliance on fossil fuels, in line with one of the REPowerEU Plan's objectives. To finance this increased ambition, the Netherlands has asked for a share of its Brexit Adjustment Reserve to be transferred to the plan, amounting to €280 million. These funds would be added to the Netherland's REPowerEU grant of €455 million.

Key measures for REPowerEU

The REPowerEU measures include a reform of the electricity grid management system and a  €735 million investment in sustainable energy and energy savings.

The reform will reduce congestion on the Dutch electricity grid and facilitate the decarbonisation of energy production.

The investment will notably improve connections to the heat grid, support insulation and finance the installation of heat pumps and solar water heaters.

Together, these measures are expected to increase energy savings and renewables in The Netherlands.

The major challenge for the Netherlands in terms of meeting climate targets relates to the presence of relatively large energy-intensive industry and transport sectors. In addition to electrification, these sectors will need to rely on other energy carriers such as renewable hydrogen to become climate neutral.

The measures in the plan are expected to contribute to achieving the 2050 climate neutrality objective, and the 2030 energy and climate targets, taking the Netherlands’ national energy and climate plan into account. They should also contribute to meeting environmental targets for waste, water, pollution control, biodiversity protection and restoration, marine and water resources, and support the transition to sustainable food systems as well as to a circular economy as appropriate.

Key measures for the green transition

• The Netherlands’ plan puts a strong focus on the green transition, as €3 billion will be dedicated to green investments.
• Dedicated measures are expected to boost the development of renewables through investments in support for offshore wind energy (€694 million) and in R&D in green hydrogen (€69 million). These will be complemented by crucial reforms in permitting and energy taxation.
• €989 million will be allocated to reduce nitrogen emissions or address their negative effects on nature through a subsidy scheme for the cessation of intensive pig farming (€275 million) and a comprehensive Nature Restoration scheme (€714 million).
• On sustainable mobility:
  • €29 million will be invested in promoting the development of ultra-efficient aircrafts using hydrogen as an energy carrier; and 
  • €56 million in strengthening support for fully electric, zero-emission inland waterway transport.
• The adoption of specific reforms will facilitate the connection of renewable energy to the energy grid, the sale of self-generated electricity and investments in the charging infrastructure for electric cars to support the transition towards more energy sources.
• Energy efficiency measures will account for €1.6 billion via:
  • the subsidy scheme for sustainability of public sector real estate (€225 million), which promotes renovations and focusses on improving the energy efficiency of public sector buildings, and
  • the investment subsidy for sustainable energy and energy savings (ISDE) (€1.4 billion), which awards grants for investments in small-scale heat pumps, solar boilers, insulation and heat connections to improve energy efficiency. 
• Several measures in the plan also contribute to the REPowerEU objectives to rapidly reduce dependence on Russian fossil fuels and fast-forward the green transition. These include for example investments in sustainable energy and energy savings and a reform to facilitate investments in the electricity grid.

The modified plan, including the REPowerEU chapter, has further strengthened the focus on the plan on the green transition, devoting 55% of the available funds to measures that support climate objectives (up from 48% in the original plan).

The Netherlands is one of the top performers in the digital domain in the European Union and the Dutch population has generally high levels of basic and advanced digital skills. However, the country also faces a persistent shortage of digitally skilled professionals, including in artificial intelligence, data and cybersecurity. The proportion of female ICT specialists has been increasing slowly over recent years but is still slightly below the EU average. Addressing these challenges through suitable investments in digital skills education and in digital skills development more generally can contribute to maintaining the Netherlands' position as a digital leader.

Key measures for the digital transition

• The Netherlands’ recovery and resilience plan supports the digital transition with investments promoting advanced technologies, such as quantum technology (€263 million) and artificial intelligence (€60 million).
• Digitalisation of education is supported by a €209 million investment in the information and communications technology (ICT) infrastructure and sectoral knowledge infrastructure of the education system.
• Sustainable mobility is supported with €149 million in promoting smart mobility solutions, the rollout of digital infrastructure in the traffic management system of trains and the development of digital road side stations.
• The plan also envisages support for the digitalisation of the criminal justice chain (€75 million) and upgrades to the IT systems of the Ministry of Defence (€94 million).
• Furthermore, the plan will contribute to developing digital skills at different levels of the education system and digital inclusion in both education (€329 million) and health through e-health applications (€22 million) in the Netherlands.

Key macro-economic challenges for the Netherlands’ economy include addressing challenges emanating from debt bias and distortions in the housing market and from institutional differences on the labour market between employed and self-employed. Efforts are needed to tackle tax avoidance and address money laundering related challenges, to promote institutional resilience by accelerating the digitalisation of the Dutch government and to improve the Dutch healthcare system, including the risk of an acute shortage of human resources in the care sector.

Key measures in reinforcing economic and social resilience

• The recovery and resilience plan supports with €538 million the availability of affordable housing through the acceleration of the provision of accommodation in locations with a good and climate-resilient living environment, thereby increasing the opportunity for lower- and middle-income groups to find appropriate housing.
• The plan improves social protection for the self-employed in a reform introducing a mandatory disability insurance for the self-employed, which will contribute to level the playing field between employees and self-employed.
• With a budget of €95 million, the plan sustains employment through support for upskilling and targeted advice to prevent unemployment or help people get back to work.
• With €49 million, the resilience of the health care system is supported through the creation of a national health reserve of care professionals to be deployed in case of a future health crisis and through vocational education and ‘on the job training’ of health staff. 

The Netherlands’ plan is consistent with the challenges and priorities identified in the European Semester, the annual cycle of coordination and monitoring of each EU country’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

DOCUMENTS