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Upstream reforms help the Netherlands spearhead Europe’s energy transition

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19 February 2021

Upstream reforms help the Netherlands spearhead Europe’s energy transition

Report summary

On 26 January 2021, the Dutch senate finally passed a bill submitted in May 2020, to amend investment deductions and decommissioning protocol in the Mining Act. As a package, the changes outlined in the amendment all contribute to the Netherlands’ energy transition goals. The new incentives will not lead to massive new investment in exploration or development because of a lack of pre-FID projects and few active explorers. However, increased activity at the margins will undoubtedly contribute to increased economic recovery. And in an increasingly import-dependent gas market, the lower carbon intensity of domestic production will contribute to industry and country-level decarbonisation efforts.

Table of contents

  • Executive Summary
  • A long-awaited bill is passed
    • More attractive tax terms will do little for a bare pipeline of pre-FID projects
    • ...although administrative burdens to apply the investment allowance will be lightened
    • And while exploration may be partially resuscitated, it won’t see a full revival
    • But fiscal incentives will contribute to decarbonisation
    • New Decommissioning Security Agreements introduced
    • New framework could enable portfolio optimisation
    • Decommissioning exemptions benefit both Dutch state and operators
  • Amendment is a positive step, but regulatory reforms still needed

Tables and charts

This report includes 5 images and tables including:

  • Netherlands upstream investment and abandonment costs
  • Fiscal analysis: Rembrandt and Vermeer
  • Fiscal analysis: A/15-A
  • Netherlands exploration drilling by year
  • Top companies by total offshore acreage

What's included

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  • Document

    Upstream reforms help the Netherlands spearhead Europe’s energy transition

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