To: European Commission
From: Nederlandse Vereniging Duurzame Energie (NVDE – Dutch Sustainable Energy Association)

Introduction
As representatives of the NVDE, we welcome and strongly support the European Commission’s initiative for an Electrification Action Plan. Electrification is critical to achieving climate neutrality, strengthening Europe’s strategic autonomy, and improving competitiveness. However, without robust demand-side policies, progress risks stagnation. The Action Plan should therefore prioritize creating stable, long-term demand for clean industrial products to accelerate electrification and the deployment of renewables, ensuring a resilient and competitive European industrial base.

Breaking the chicken-and-egg cycle
Ensure a coordinated development of demand, supply, and infrastructure so factories can run on electricity and green hydrogen. Establish agreements between governments, industries, and energy producers to share risks—such as four-way Contracts for Difference (CfDs)—covering both the supply of renewable electricity and the demand from industry.

Key recommendations

1) Establish EU-wide procurement standards for clean products
- Mandate the use of clean industrial products (e.g., steel, plastics, fertilizers) in public and private procurement.
- Require a minimum share of clean inputs in final products and public tenders.
- Benefits:
  • Create a reliable market for clean products, making electrification investments viable.
  • Encourage innovation and scaling of clean technologies.
  • Ensure a level playing field across the EU and prevent carbon leakage.
- Implementation principles:
  • Introduce gradually, tailored to sectoral specifics to manage transition impacts.

2) Implement CfDs and enable long-term Power Purchase Agreements (PPAs)
- Use CfDs and PPAs to reduce risk for electrification and renewable generation.
- Outcomes:
  • Provide price stability for producers and consumers of renewable electricity.
  • Encourage long-term investments in renewable infrastructure.
  • Facilitate integration of renewables into industrial processes.
- Develop a European or government-backed PPA guarantee fund:
  • Address the maturity mismatch between long-term generation contracts and shorter industrial offtake horizons.
  • Ensure industrial players can participate in long-term PPAs to build a mature, ultimately subsidy-free market.

3) Support infrastructure development and keep grid costs manageable
- Expand and modernize electricity grids to meet electrified industry demand.
- Policy measures:
  • Public financing for energy infrastructure, analogous to transport networks.
  • Align grid expansion with the pace of industrial electrification.
  • Incentivize private sector participation in grid projects.
- Green interest rate initiative:
  • Given infrastructure’s sensitivity to interest rates, the ECB could introduce a discounted interest rate for sustainable energy projects to keep grid costs in check and spur investment. Analysis indicates substantial savings at national level, multiplied at EU scale.
- Measures to reduce and fairly distribute grid costs:
  • Time-varying and capacity-reflective network tariffs to encourage flexible use and reduce peaks, while safeguarding affordability for households and SMEs transitioning to clean technologies.
  • Support organizations to adopt flexible operations and contractual arrangements.
  • Emphasize energy efficiency—energy not consumed need not be transported—directly relieving grid pressure.
  • Treat grid investments as a European priority, strengthening interconnections. For the Netherlands, enhanced cooperation on cross-border offshore grids in the North Sea will optimize abundant offshore wind. Ensure cross-border transmission charges reflect shared benefits.

4) Reduce taxes on (renewable) electricity
- Lower electricity taxes, especially for households and energy-intensive industries, to:
  • Help households electrify while lowering bills.
  • Reduce operating costs of electrified industrial processes.
  • Enhance EU industrial competitiveness.
  • Accelerate renewable adoption.
- Make energy taxation fairer and more effective through one of two options:
  1. Reform based on energy content (per GJ):
     • Equal treatment per unit of energy.
     • Simpler, transparent, and efficiency-stimulating.
     • More stable tax revenues in a decarbonizing system.
     • Does not internalize externalities.
  2. Reform based on CO2 emissions:
     • Closely aligned with climate policy.
     • Automatically makes electricity cheaper as power supply decarbonizes.
     • Direct price signal to switch to cleaner alternatives.
- Shift the tax base to CO2 or energy content to align with climate goals, price fossil energy fairly, and lower energy costs. Reduce degressivity so citizens and businesses can electrify step by step.

5) Align electrification with broader industrial decarbonisation
- Integrate electrification into a comprehensive strategy that includes:
  • Clear, sector-specific emission reduction targets.
  • Support for R&D in clean technologies.
  • Policies promoting circular economy practices.
  • Just transition measures for affected workers and regions.

Conclusion
The Electrification Action Plan is a pivotal opportunity to drive Europe’s transformation toward sustainability, energy security, and competitiveness. By focusing on demand creation, risk-sharing instruments, infrastructure development, fair taxation, and alignment with industrial decarbonisation, the EU can ensure electrification accelerates renewable deployment and deep industrial emissions reductions.

We thank the Commission for the opportunity to contribute and remain available for further dialogue.

Yours sincerely,
Nederlandse Vereniging Duurzame Energie (NVDE)