Does the government have to support the industry? A waste of money, these economists think

A group of thirteen economists calls on the government not to spend a lot of money on support for the industry, which is struggling with high energy costs. Because according to the economists, that money will mainly go to large companies that use a lot of gas and petroleum. “It is precisely these energy-intensive companies that would benefit most from a generic reduction in energy costs. The Dutch tax money can be better spent,” they write in a letter.

“Fossil companies that now ring the bell about the energy costs are the same companies that have made a lot of profit in recent years,” says Karen Maas, director of the Impact Center Erasmus. “They could have used that money themselves to make it more sustainable.”

According to economists, it is mainly about the so -called basic industry: factories that make basic products used by the rest of the industry. Consider, for example, steel and chemical products. The Lower House is debating today about possible support for the heavy industry in the Netherlands.

There are living throughout Europe that industry disappears here, due to the high energy costs compared to, for example, surrounding countries and the United States. This week it came out that both chemical company Lyondellbasell and pigment manufacturer Tronox are closing a factory, both in the port of Rotterdam. As a result, around 300 jobs disappear.

According to economists, the importance of this type of energy-intensive companies in the basic industry is relatively small for the Dutch economy and employment. According to them, around 50,000 people work in this sector. In the Netherlands, a total of almost 10 million people work.

On a national scale, employment in the basic industry may be relatively small, at the local level there are major concerns about fewer jobs. Such as in Rozenburg, ‘sandwiched’ between the Botlek area and the Europoort area of ​​the port of Rotterdam. “You lose industry, you lose knowledge. In the long term, it is really just a disaster for the village,” says former mayor Ria de Sutter-basters of the former municipality of Rozenburg, now part of Rotterdam. “The industry simply produces prosperity for ordinary citizens in Rozenburg.”

In 2003 she was at the festive opening of the Lyondellbasell factory that is now closing and is demolished. “The people in Rozenburg are wondering, how is that possible? Why does such a beautiful factory have to close barely 20 years old,” said the Sutter-Onderers. “We have to stop running behind that climate transition and wanting to be at the forefront.”

The call for support for the industry is not just about employment. But Europe also does not want to become dependent on, for example, the US or China. We must be able to produce basic products ourselves, especially now that a trade war threatens due to the import duties that President Trump enters.

The thirteen economists are sensitive to that argument. “Europe must also be self -reliant, especially in view of the current situation,” says professor Maas. “I don’t argue that we chase away all chemical and steel companies from Europe. But the question is that companies have to be in the Netherlands? We are a small country, have many problems with the energy networks and have a shortage of labor.”

They therefore argue that the industry will be distributed differently across Europe. “In Spain, for example, there is room and through the sun there is a lot of green energy available,” says Maas. “Within Europe, we can better see where certain companies should find their place, so that Europe can protect and support itself.”