The Dutch industrial sector is experiencing significant difficulties as the ongoing energy transition and global pressures take their toll. With rising energy costs and diminishing investment, companies in the Netherlands are facing challenges that threaten their very existence. This shift is not merely an abstract issue; it is a pressing reality impacting the economy and employment.
The European Union’s push towards renewable energy sources—particularly offshore wind, solar, and biofuels—aims to reduce dependence on unstable suppliers. This transition, however, comes at a price. Countries like the Netherlands, previously buoyed by their natural gas reserves, are now struggling with high energy costs that are eroding their manufacturing base.
Energy Crisis Intensifies in the Netherlands
According to EU Commissioner for Industry Thierry Breton, over 20 companies have closed in recent years across Europe, with the Netherlands bearing a disproportionate share of the impact. The situation is exacerbated by global overcapacity and competition from China. Dutch companies, especially in the downstream and chemical sectors, are particularly vulnerable to these pressures, which are heightened by strict environmental regulations and ongoing disputes over nitrogen emissions.
The Port of Rotterdam, a critical hub for Europe’s energy and chemical industries, is witnessing a wave of closures and divestments. Major firms such as Global Energy Storage Group (GES) are relocating to Asia, taking with them vital infrastructure. GES has sold its 212,000 m3 terminal in Rotterdam to French company Tepsa amid concerns over the Netherlands’ investment climate. Similarly, Gunvor is shutting down its oil terminal and refinery in Rotterdam, citing unstable conditions.
The consequences of this industrial unraveling extend beyond job losses; they pose a significant risk to Europe’s defense capabilities. The Netherlands plays a crucial role in supplying fuel to NATO through Rotterdam’s infrastructure. As companies like LyondellBasell, Tronox, and Indorama shut down operations, questions arise about the sustainability of Europe’s energy security.
Market Pressures and Regulatory Challenges
A report from the Dutch Statistics Office (CBS) highlights growing concerns within the industrial sector. It found that 95% of industrial exporters are apprehensive about global trade policies, a sharp increase from 41% in March 2023. This worrying trend reflects broader anxieties about operational costs and market conditions.
The Dutch economy is grappling with the highest energy prices in the EU, alongside an unstable power grid and the looming threat of winter blackouts. The sustainability push, often regarded as a “Holy Grail,” is increasingly seen as a contributing factor to deindustrialization. The Netherlands, once a beacon for global investors, is losing its competitive edge.
Political leaders in the Netherlands must recognize the gravity of the situation. The European Commission recently introduced an action plan to combat the wave of closures affecting chemical plants and refineries across the EU. While this initiative is a step in the right direction, there are fears that it may be too late for many companies, particularly in Rotterdam, where closures are escalating.
The interplay of high energy costs, regulatory challenges, and global competition is reshaping the industrial landscape in the Netherlands. Without decisive action, the country risks not only its economic stability but also its critical role in Europe’s energy and security framework.
