A Dutch report has highlighted the risk of ‘offshoring’ carbon dioxide emissions from commercial greenhouses which are currently outside the scope of the EU’s Emissions Trading Scheme (ETS) – sometimes known as carbon leaking.
The report by Trinomics for the Dutch government points out that the greenhouse sector produces some 83 per cent of all Dutch greenhouse gas (GHG) emissions, equal to around 5.8 MtCO2, of which 5.4 MtCO2 are outside the scope of the ETS.
The report attempts to clarify what the impacts of introducing carbon pricing to these emissions would be. While carbon leakage from heated Dutch greenhouses to unheated production in warmer climates negatively affects production levels in the Dutch sector, it may lead to lower global CO2 emissions due to lower carbon footprints per unit of product. This is not the case for leakage towards (Northern) countries using heated greenhouses, like the Netherlands.
The report comments, ‘That there is little product differentiation within the sector and little room to passthrough costs. Qualitative research confirms this overall picture. It is noted that there is more room to pass-through costs for specialty products, such as certain flowers and plants.’
It adds that, ‘Unilateral Dutch carbon pricing will likely increase the risk of carbon leakage to both heated greenhouse producers as well as unheated production. The difference between heated and unheated production systems adds an additional component to the carbon leakage assessments.’