Industrial long-term agreements on energy efficiency in the Netherlands. A critical assessment of the monitoring methodologies and quantitative results

Abstract

Long-term agreements (LTAs) with industry were added to the mix of energy-policy instruments in The Netherlands at the beginning of the 1990s. Within a few years these agreements have become very important for the industrial energy-conservation policy. In this study we assessed the extent to which the targets set out by the government were achieved. To this end we studied: (1) whether the original policy targets for industry were adequately translated to the contracted LTAs; (2) whether the LTAs achieved the contracted goals; and (3) whether the monitoring methodologies that were developed ensure a complete, comparable and objective monitoring of the energy-intensity developments in manufacturing industry. The policy target for manufacturing industry was to decrease energy intensity by 19% in the period 1989-2000 (excluding feedstocks). It turned out to be possible to contract LTAs that cover 72-75% of the energy consumption in manufacturing industry. The average of the contracted LTA targets amounts to an 18% intensity decrease. The average goal achievement of the LTAs in the period 1989-1997 turned out to be in accordance with the contracted targets, although more than half of the LTA sectors are lagging behind the agreed rate of intensity decrease. For each of the LTAs a monitoring methodology was developed. Some aspects of these monitoring methodologies have resulted in the fact that the LTA monitoring does not ensure a comparable and objective monitoring of the energy-intensity results in the LTAs. Overall, we conclude that the monitoring of the energy-intensity developments in the long-term agreements' sectors is insufficiently transparent. We recommend a stricter enforcement of uniform monitoring requirements in a new generation of LTAs and independent supervision and verification of the monitoring results.