COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - the Netherlands Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary polices of the Netherlands
Date: 2026-06-03
Institutions: European Commission, Reform and Investment Task Force
Subjects: Netherlands, budget policy, economic policy, economic recovery, economic reform, employment policy, green economy, labour market, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 3.6.2026  SWD(2026) 219 final  COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - the Netherlands Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary polices of the Netherlands {COM(2026) 219 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

Lower growth amid global 
uncertainties 

The  Dutch  economy  grew  by  1.8%  in 
2025,  surpassing  earlier  forecasts.  This 
solid  growth  was  supported  by  strong 
domestic demand, driven in particular by  high 
government spending on healthcare and rising 
wages.  Goods  exports 
resilient 
despite global headwinds, including the impact 
of  US  tariffs.  However,  investment  levels 
stayed subdued. 

remained 

Inflation  is  surging  again  due  to  soaring 
energy prices. The recent crisis in the Middle 
East  has  driven  up  energy  prices.  With  Dutch 
inflation already above the EU average at 3% 
in  2025,  fuelled  by  services  and  food  prices, 
the energy market disruptions are expected to 
push up inflation to 3.2% in 2026. 

The  rising  cost  of  energy  is  likely  to  rein 
in  household  spending  and  investment, 
future  economic  growth. 
dampening 
remains  strong, 
Although  wage  growth 
household  spending  is  projected  to  increase 
only  limitedly,  while  investments  may  be 
further  postponed  amid 
lingering  global 
uncertainty.  Meanwhile,  high  labour  costs  and 
surging  energy  prices  will  undermine  the 
competitiveness  of  Dutch  exports  amid  low-
productivity  growth.  An  ambitious  public 
investment agenda particularly in the areas of 
defence,  the  green  transition  and  housing, 
partially  offsets the  weakness  of  investment 
in  the private  sector.  Against  this  backdrop, 
GDP growth is forecast to reach 1.0% in 2026 
and 1.1% in 2027. 

Dutch  public  finances  remain  sound  but 
ageing-related costs continue to be a risk 
long  term.  The 
in  the  medium  to 

government  deficit  in  2025  stood  at  1.6%  of 
GDP  and  is  expected  to  rise  to  2.5%  in  2026 
and  1.9%  in  2027.  Government  debt  rose  to 
44.4%  of  GDP  in  2025  and  is  expected  to 
increase to 46.9% in 2026 and remain broadly 
stable  at  47.0%  in  2027.  In  the  longer  term, 
costs  linked  to  the  ageing  population  are 
expected  to  lead  to  a  significant  increase  in 
spending  on  pensions,  health  and  long-term 
care  (see  Annex  2).  As  a  share  of  GDP, 
spending on long-term care in the Netherlands 
is  the  highest  in  the  EU.  It  is  expected  to 
increase  by  1.5%  of  GDP  by  2050,  raising 
potential  concerns  about 
long-term  fiscal 
sustainability  (see  Section  4).  Climate  change 
has  an  increasing  impact  on  long-term  public 
finances (1).  

Long-standing macroeconomic 
imbalances remain 

facing 
The  Netherlands  has  been 
vulnerabilities relating to a large current 
account  surplus  and  high  household  debt 
and house prices. The Commission undertook 
an  in-depth  review  of  the  Dutch  economy  as 
part  of 
Imbalance 
the  Macroeconomic 
Procedure  earlier  in  2026  (2).  That  review 
highlighted  that  the  current  account  surplus 
remains  elevated,  despite  some  recent  falls, 
but  it  is  a  structural  feature  of  the  economy, 
as  the  Netherlands  host  a  large  number  of 
prices 
multinational 
increased further amid structural challenges to 
supply.  The  household  debt-to-GDP  decreased 

enterprises.  House 

(1)  See  European  Commission  (2026),  Debt  Sustainability 
Monitor  2025  -  Economy  and  Finance,  Institutional 
Paper No 332, 

(2)  SWD(2026) 140 final; European Economy Institutional 

Paper 337, May 2026.  

2 

 
 
 
 
marginally  in  2025  after  more  significant 
declines  in  previous  years  and  is  expected  to 
remain elevated as borrowing edges up. Policy 
actions  have  been  recently  taken  but  overall 
progress has been limited. 

are 

The  current  account  surplus  stands  at 
around  8%  of  GDP  and  is  expected  to 
remain high, driven by a substantial trade 
surplus  in  goods  and  services.  From  a 
savings-investment  perspective,  this  surplus 
reflects  excess  savings  in  the  Dutch  economy 
that are largely driven by the corporate sector. 
The  main 
Dutch 
contributors 
multinationals  and  small  and  medium-sized 
enterprises.  The  former  receives  profits  from 
their  worldwide  operations  and  largely  use 
them  to  reinvest  in  their  foreign  affiliates, 
increasing  retained  earnings  held 
in  the 
Netherlands.  Still,  even  after  accounting  for 
these  factors  there  is  a  substantial  savings 
surplus.  Addressing  domestic 
investment 
needs could contribute to closing the savings-
investment gap. Removing the bottlenecks that 
hold  up  further  investments  could  stimulate 
stronger  investment  growth  and  reduce  the 
surplus.  Domestic  demand  dynamics  have 
been  relatively  strong  in  the  Netherlands. 
Consumption growth, and, to a lesser extent, in 
investment  has  outperformed  the  rest  of  the 
euro area since 2021. This has helped narrow 
the surplus, although the effect is mitigated by 
the  impact  of  the  corporate  sector  on  the 
surplus. 

Unlocking investments to maintain 
a highly competitive economy 

The  Netherlands  is  one  of  the  EU’s  most 
productive  and  competitive  economies, 
but  productivity  growth  has  lagged  that 
of its European peers. In 2025, the country 
ranked  seventh  in  the  EU  in  terms  of  labour 
productivity  (3),  but  growth  over  the  last 
decade has been relatively weak compared to 
peers such as Denmark, Germany and Sweden. 
A major reason for this underperformance has 
been  the  gradual  phase-out  and  shutdown  of 
gas  extraction  from  the  Groningen  field  (due 
to seismic risks), which had a particularly high 
productivity  rate.  Most  other  provinces  also 
perform poorly with a real productivity growth 
(see  Annex  18). 
below  the  EU  average 
Structural  weaknesses  including  overall  low 
investments,  a  high 
flexible 
employment  and  an  inefficient  allocation  of 
scarce  labour  resources  to  relatively  low-
productivity  sectors  are  also  likely  to  have 
weighed on overall productivity growth. 

level  of 

Graph 1.1: Growth in fixed investments 

Household  debt  and  house  prices  remain 
high.  The  high  level  of  debt  stems  primarily 
from  high 
rates  of  mortgage-financed 
homeownership  and  substantial  loans.  The 
household  debt-to-GDP  ratio  decreased  only 
marginally,  from  93.3%  in  2024  to  92.8%  in 
2025,  remaining  the  highest  in  the  EU  but 
significantly below its peak of 125% in 2010. 
The  high  debt  levels  make  households  more 
vulnerable to economic downturns, particularly 
in  the  context  of  an  overvalued  housing 
market.  However,  the  immediate  risks  appear 
contained 
strict 
rules governing the debt 
service-to-income 
ratio keeping payment delays low. 

result 

as 

of 

a 

Source: CBS 

Government  instability,  global  economic 
uncertainties  and  structural  domestic 
bottlenecks are holding back investments 
that  are  essential  to  future  growth. 
Investments 
in  fixed  assets  -  such  as 
infrastructure, machinery and buildings - have 
been  on  a  downwards  trend  (see  Graph  1.1). 

(3)  The Conference Board (2026). 

3 

-6%-4%-2%0%2%4%6%8%10%201720182019202020212022202320242025Business and households investmentsGovernment investmentsTotal investments 
  
 
 
Private-sector  investment  growth  even  turned 
negative  in  2024  and  2025,  but  thanks  to 
a public  investment  agenda  -  particularly  in 
defence,  energy  and  housing  -  overall  annual 
investment growth was positive. In addition to 
the  global  uncertainties,  to  which  an  open 
economy  like  the  Netherlands  is  particularly 
exposed,  private-sector  investment  has  been 
including 
dampened  by  domestic  factors, 
political  instability  and  frequently  changing 
government 
structural 
bottlenecks have yet to be tackled as they are 
additional  constraints  on  overall  investment. 
These 
include  electricity  grid  congestion, 
permitting  constraints  related  to  excessive 
nitrogen 
skills 
shortages, and access to finance for start-ups 
and  scale-ups.  Taken  together,  these  factors 
risk  holding  back  the  investments  needed  to 
underpin 
and 
competitiveness,  as  well  as  the  green  and 
digital transitions and housing construction. 

productivity 

deposition, 

policies. 

Several 

labour 

future 

and 

Tackling housing shortages and 
supporting the private rental 
market to narrow the divide in the 
Dutch housing market 

from 

The  Dutch  housing  market  poses  serious 
challenges  for  a  large  and  vulnerable 
minority. There is a structural divide between 
‘insiders’  –  social  renters  and  particularly 
homeowners  -  and  ‘outsiders’  –  many  private 
renters and those struggling to access housing. 
Owner-occupiers 
fiscal 
benefit 
advantages, including lower mortgage interest 
and low imputed rent taxation (see Section 2). 
This  drives  up  house  prices  and  have  enabled 
many homeowners to profit from a decade of 
strongly  rising  house  prices.  Social  renters, 
predominantly 
and  mid-income 
households, benefit from paying below-market 
rents.  By  contrast,  many  private  renters  and 
people  looking  for  housing  (outsiders)  receive 
less  public  support  than  the  insiders.  They 
typically face higher rents and less availability, 
including  long  waiting  lists  for  social  housing. 
This disparity is visible in that 43.9% of Dutch 
private  renters  are  overburdened  by  housing 
costs - defined as spending more than 40% of 

low- 

disposable income on housing  - far exceeding 
the  EU  average  for  tenants  at  market  rate 
(19.2%)  (4).  It  also  results  in  low  rate  of 
residential  mobility  as,  for  example,  higher-
income  households  continue  living  in  social 
housing, while older residents continue living in 
family-sized  homes.  To  reduce  inequalities  in 
the housing market, reducing distortions in the 
tax  system,  potential  measures  include  a 
gradual  phase-out  of  the  mortgage  interest 
deduction (see Section 2), and tighter income-
linked  rent  policies  for  higher-income  social 
tenants (see Annex 16). 

a 

received 

regarding 

Recent  rental  regulations  have  led  to  a 
sell-off  of  private  rental  property.  The 
country-specific 
Netherlands 
recommendation  (CSR)  in  2025  highlighting 
concerns 
the  attractiveness  of 
investment  in  the  private  rental  sector.  The 
focus  was  primarily  on  the  extension  of  rent 
caps to the mid-range private rental  sector in 
2024  (5).  While  this  measure  provided  relief 
for some tenants, together with higher interest 
rates  and  tax  changes,  it  has  led  to  an 
increase in sales of private rental properties to 
the owner-occupier market. Two years later, on 
1 January 2026, around 16 000 fewer private 
rental properties were available on an already 
tight  market.  This  marked  a  change  since 
2020-2023, during which an average of about 
36 000  dwellings  per  year  were  added  to  the 
private  rental  stock.  The  Netherlands  reduced 
the  transfer  tax  from  10.4%  to  8%  on  non-
primary 
is 
expected to support a limited expansion of the 
private  rental  sector.  In  addition,  it  would  be 
preferable 
investments  more 
attractive  by  recalibrating rent  controls  to 
better 
regulated 
ensure 
align with property  valuations 
in the  rental 
market,  while  avoiding  a  return  to  excessive 

residence  dwellings 

to  make 

(6).  This 

rents 

that 

(4)  This indicator should be read together with the tenure 
structure (homeowner, tenants), that may differ across 
country and regions. 

(5)  Further  rent  regulations  introduced  in  recent  years 
include  a  ban  on  buy-to-let  properties  in  specific 
neighbourhoods  (2022),  providing  greater  protection  to 
renters  (Wet  goed  verhuurschap,  2023),  and  making 
fixed-term rental contracts the norm (2024). 

(6)  Terugdringen woningnood topprioriteit | Nieuwsbericht | 

Rijksoverheid.nl 

4 

 
 
address  the  complex  planning  and  permitting 
processes  by  parallel  instead  of  sequential 
planning  and  by  shortening  appeal  periods.  In 
addition,  preparations  are  ongoing  of  a  first 
package  of  amendments  to  simplify  the 
building  regulation  to  reduce  construction 
costs.  The  government  made  EUR 3  billion 
available  until  2030  to  support  municipalities 
in  the  construction  of  affordable  homes 
(Realisatiestimulans and Woningbouwimpuls).  

on 

an 

increase 
tax 
the  proceeds  used 

To  reach  the  national  target  of  100 000 
new  homes  per  year,  the  Netherlands 
could pursue a more  active  land  policy. 
This  could  include amending  zoning  laws to 
in 
enable 
land 
construction and a zoning 
surpluses,  with 
to 
finance the 
necessary 
supporting infrastructure.  At  the  same  time, 
housing 
modest 
construction 
to  meet 
strong  and  persistent  demand.  Tackling  the 
constraints  to  scaling  up  construction  by 
enabling  housing  associations, 
including 
through 
improving  their  financial  position, 
could  help  alleviate  affordability  pressures 
(see Annex 16). 

social 
in 
insufficient 

increases 
remain 

Structural  bottlenecks  also  restrict  the 
housing  supply.  There  are  other  bottlenecks 
that also curb the supply of new homes, which 
were  covered  by  CSRs  in  2025.  They  include 
labour  shortages,  also  in  the  construction 
sector  (see  Section  4),  and  challenges  related 
to  the  green  transition,  such  as  construction 
permit 
to  excessive 
nitrogen deposition and lack of grid capacity to 
connect  new  dwellings  to  the  electricity  grid 
(see Section 3). 

restrictions 

related 

for 

broader 

implications 

The  lack  and  high  cost  of  housing  also 
has 
the 
country’s competitiveness. It can aggravate 
labour  shortages  by  hindering  internal  labour 
mobility. In certain regions (Randstad)  it could 
make it more difficult for companies to attract 
foreign  talent  (who  are  often  more  reliant  on 
the  private  rental  market)  and 
increases 
labour  costs  as  firms  need  to  offer  higher 
salaries  to  offset  the  high  cost  of  living.  The 
government aims to tackle this problem under 

rents. This  could  also  help  increase  overall 
housing constructions (see below). 

Tackling the housing shortage would ease 
availability  and  affordability  challenges. 
The  Netherlands  received  a  CSR  in  2025  to 
remove  obstacles  to  the  construction  of  new 
homes. The housing shortage was projected to 
exceed  400 000  homes  in  2025  (7).  The 
number  of  new  homes  added  to  the  housing 
stock  has  been  decreasing  since  2022  (see 
Graph  1.2),  which  will  reduce  the  housing 
supply in 2027. The shortage is most acute in 
the  Randstad 
(West  Netherlands),  where 
population  density  is  high  and  there  are 
several  rapidly  growing  medium-sized  cities 
such as Eindhoven, and other parts of Brabant, 
due to increasing population numbers in these 
regions. 

Graph 1.2: Additional homes per year 
(compared with the government target) 

(1) In 2019-2020, the government target was between 
75 000 and 100 000 additional homes 
Source: CBS 

The related legislative measures are still 
in  progress,  but  they  need  to  be 
implemented.  The  government  sent  a  bill  to 
Parliament  on  a  Housing  Management 
regie 
Enhancement  Act 
volkshuisvesting), which is also included in the 
Dutch  recovery  and  resilience  plan  (RRP),  to 

(Wet  versterking 

(7)  Based  on  European  Commission  and  JRC  calculations 
and  forecast.  For  details,  see  Balouktsi  et  al.  (2026), 
Housing  investment  needs  in  the  EU,  JRC  Technical 
Report 144419. 

5 

0200004000060000800001000001200002019202020212022202320242025Other additions and subtractions to housing stock (net result)New build dwellings(minimum) Annual government target 
   
 
 
policy  funds  (see  Box  3).  In  addition,  the 
Common  Agricultural  Policy  (CAP)  provides 
Netherlands  with  an  EU  contribution  of  EUR 
4.7  billion  under  the  CAP  strategic  plan  for 
2023-2027 (8). A further EUR 558.7 million are 
available  under  the  Asylum,  Migration  and 
Integration  Fund  (AMIF),  together  with  the 
Border  Management  and  Visa 
Instrument 
(BMVI)  and  the  Internal  Security  Fund  (ISF). 
Other 
support 
competitiveness  in  Netherlands,  for  instance 
through  open  calls  under  Horizon  Europe  and 
the Connecting Europe Facility.  

programmes 

also 

EU 

initiatives  such  as  Project  Beethoven  for 
Brainport Eindhoven (see Annex 18). 

Action is ongoing to tackle the 
economic security challenges 

over 

fuels 

fossil 

faces 

existing 

Netherlands 

The 
persistent 
challenges  due  to  relatively  high  energy 
prices  and  dependence  on  critical  raw 
materials  from  outside  the  EU.  Electricity 
and gas prices are already among the highest 
in  the  EU  in  nominal  terms,  but  the  country’s 
reliance  on 
for  electricity 
generation makes it also vulnerable to severe 
price  spikes  during  peak-demand  hours  when 
gas-fuelled plants need to ramp up production 
significantly.  To this  end,  fast  decarbonisation 
of  the  economy  and  enhancing  electricity 
trading 
cross-border 
infrastructure remains crucial. The Netherlands 
has already drastically reduced its reliance on 
Russian  gas,  replacing  supplies  mostly  by 
imports from Norway and the United States. It 
also  imports  significant  oil  supplies  from 
including  Norway  and  the 
within  Europe, 
United  Kingdom  (see  Annex  9).  At  the  same 
time, 
sector, 
the  Dutch  manufacturing 
although smaller than the EU average (12.8% 
of  GDP  against  17.3%  of  GDP  in  2024),  is 
heavily  dependent  on  critical  raw  materials 
imports  needed  for  the  green  and  digital 
transitions.  As  the  EU’s  largest  importer  of 
critical  raw  materials  from  non-EU  sources, 
the  Netherlands  imported  unprocessed  critical 
raw  materials  worth  EUR 17  billion  in  2024 
(7.4  billion  without  transit),  leaving  it  exposed 
to  any  supply  chain  disruptions.  To  mitigate 
these  risks,  it  has  set  up  a  Task  Force  on 
Strategic 
identify and 
address  high-risk,  strategic  dependencies (see 
Annex 5). 

Dependencies to 

funding 

instruments 

EU 
provide 
considerable  resources  to  Netherlands. 
investments  and  structural 
They  support 
reforms 
competitiveness, 
increase 
to 
environmental  sustainability,  skills,  social 
fairness and security, while helping to address 
in 
challenges 
the  CSRs.  Key 
instruments 
the  Recovery  and 
Resilience  Facility  (see  Box  2)  and  Cohesion 

identified 
include 

(8)  An overview of the Netherlands ’s formally approved 
strategy to implement the EU’s common agricultural 
policy nationally can be found at 
https://agriculture.ec.europa.eu/cap-my-country/cap-
strategic-plans/netherlands_en.  

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Box 1: 

UN Sustainable Development Goals (SDGs) 

The  Netherlands  performs  well  across  most  SDGs  related  to  macroeconomic  stability  (SDGs  8 
and 17) and productivity (SDGs 4,  8 and 9), achieving  results that are  above or comparable to 
the EU average. 

The  Netherlands  also  performs  well  on  most  SDGs  related  to  fairness  (SDGs  3,  4  and  5), 
outperforming  the  EU  average  in  most  indicators  related  to  health, education,  gender  equality, 
and decent work and growth. 

However,  in  terms  of  environmental  sustainability,  the  Netherlands  still  lags  behind  the  EU 
average  on  several  goals  (SDGs  7,  11,  13,  14  and  15).  This  underscores  the  need  for  further 
progress  to  increase  the  share  of  affordable  and  clean  energy,  reduce  net  greenhouse  gas 
emissions and reduce the high levels of agricultural emissions. 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Box 2: 

Key achievements of the recovery and resilience plan 

The  recovery  and  resilience  plan  (RRP)  of  the  Netherlands  has  a  total  budget  of  EUR 5.44 
billion, corresponding to 0.51% of GDP (9). The plan aims to support reforms and investments 
contributing to the green and digital transitions, strengthen economic resilience and address the 
long-standing structural challenges identified in the European Semester. 

As  of  22  May  2026,  the  Netherlands  has  received  EUR 3  billion  (around  56.4%  of  the  total 
budget) following the satisfactory fulfilment of 74 milestones and targets. Implementation has 
progressed steadily, with a growing number of  reforms and investments already  complete and 
tangible results achieved on the ground. 

The Netherlands is one of the largest recipients of spillover effects from other Member States’ 
plans  across  the  EU.  Spillover effects, estimated  at  EUR 8.8  billion,  account  for  more  than  two 
thirds of the total impact (10). 

Highlights and impact of the plan 

•  Energy. Through the entry into force of the Energy Law, the Netherlands has integrated the 
Gas  Law  and  the  Electricity  Law  into  a  single  legal  framework,  focusing  on  data 
management, optimising government action in key energy projects, updating regulations for 
grid operators, empowering electricity users as market participants and increasing consumer 
protection. At the same time, the Netherlands improved the energy efficiency of  homes by 
providing  subsidies  to  households  by  providing  support  for  over  600 000  energy  savings 
projects. 

•  Digital innovation. To accelerate the development and application of quantum technology, 
attract  and  retain  talent  and  stimulate  the  creation  and  growth  of  new  companies  in  the 
field, the Netherlands supported the implementation of the Quantum Delta NL programme. 
This  included  the  establishment  of  a  pre-seed  facility  for  quantum  start-ups  and  the 
development  of  a  Quantum  NL  R&D  network  to  strengthen  research  collaboration, 
innovation and commercialisation in quantum technologies, as well as related investments 
such as PhD scholarships and nanolab infrastructure. 

• 

Labour market. The Netherlands provided career advice to around 68 000 individuals, skills 
training to 119 000 individuals, and 21 tailor-made sectoral pathways to support the labour 
market profile and employability of individuals during and after the COVID-19 crisis. 

•  Pensions. Through the entry into force of the law reforming the second pillar of the pension 
system,  the  Netherlands  has  made  the  Dutch  pension  system  better  suited  to  a  changing 
labour market, improving intergenerational fairness, transparency and shock resilience. 

(9) Share of country RRP over its nominal GDP in 2023. 

(10) For a more detailed analysis of the economic impact of 
the  RRF  in  the  Netherlands,  see  Discussion  Paper  232 
(2025)  Economic  Impact  of  the  Recovery  and  Resilience 
Facility in the Netherlands - Economy and Finance. 

8 

 
 
 
 
 
 
Box 3: 

Contribution of cohesion policy funds 

EU  cohesion  policy  funding 
is  supporting  the  Netherlands’  efforts  to  boost 
competitiveness,  environmental  sustainability,  skills  and  social  fairness.  In  the  2021-
2027  programming  period,  EU  cohesion  policy  funds  (11)  are  providing  EUR 1.54  billion 
(amounting to EUR 3.5 billion paired with national co-financing) to the Netherlands. The value of 
selected projects exceeds 100% of the total allocation as of March 2026. 

• 

Innovation,  business  environment  and  productivity.  EUR 1.1  billion  is  allocated  to 
research  and  innovation,  SMEs  competitiveness  and  to  the  regions  most  affected  by  the 
transition away from carbon-intensive activities. Around 8 200 firms have already seen their 
projects approved. 

•  Decarbonisation, energy affordability and sustainability. EUR 761 million is dedicated 
to clean transition projects. These investments are expected to create approximately 35 MW 
in  additional  renewable  energy  production  capacity,  ready  for  upscaling.  Selected  projects 
will contribute to the recycling of almost 500 000 tonnes of waste per year for circular reuse 
as raw material. Projects under the Just Transition Fund will contribute to the expansion of 
classroom capacity for more than 7 000 people with new or modernised education facilities. 

•  Skills,  quality  jobs  and  social  fairness.  EUR 413  million  are  allocated  under  the 
European  Social  Fund+,  with  a  strong  focus  on  helping  vulnerable  individuals  access 
sustainable  employment.  This  funding  aims  to  improve  recipients'  access  to  the  labour 
market,  promotes  active  inclusion  and  supports  lifelong  learning  and  skills  development, 
including  in  ways  that  help  meet  labour  shortages  and  support  the  green  and  digital 
transitions.  The  funding  also  supports  social  innovation  to  foster  equal  opportunities  and 
gender  equality,  alongside  providing  material  and  food  assistance  to  the  most  deprived, 
including children. 

The  mid-term  review  (12)  reinforced  the  link  between  cohesion  policy  and  emerging  strategic 
priorities, reallocating EUR 75  million. EUR 60 million  of the reallocated funding will strengthen 
competitiveness (under the STEP initiative) by providing support for digital technologies and deep 
tech  innovation,  clean  and  resource-efficient  technologies,  and  biotechnologies.  The  mid-term 
review will also support an increase in defence innovation (EUR 15 million), with a focus on dual-
use  capabilities.  In  addition  to  cohesion  policy  funding,  the  Netherlands  will  be  allocated  up  to 
EUR 720  million  under  the  Social  Climate  Fund  over  2026-2032  to  help  mitigate  the  social 
impact  of  the  new  emissions  trading  system  (ETS2)  and  support  vulnerable  households  and 
small businesses. 

(11)  European Regional Development Fund, European Social 

Fund+, Cohesion Fund and Just Transition Fund. 

It 

(12)  The mid-term review is carried out halfway through the 
is  a  formal 
2021-2027  programming  period. 
assessment  process  required  under  Article 18  of  the 
Common Provisions Regulation that aims to assess the 
implementation  of  programmes  and,  where  necessary, 
propose  adjustments  to  improve  their  performance, 
ensure  their  relevance  in  light  of  new  and  emerging 
needs and maintain consistency with other EU policies. 

9 

 
 
 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

simulations.  They  indicate  that  increasing 
R&D  intensity  from  current  levels  to  2.8%  by 
2030  and  to  3.5%  by  2035  could  lead  to  a 
gradual  but  significant  rise  in  total  factor 
productivity  by  0.9%  after  10  years  and  by 
over  3%  in  the  long  run  (Graph  2.1).  These 
outcomes assume policy shifts of a magnitude 
that is large by historical standards. 

Graph 2.1: Estimated gains in total factor 
productivity from R&D intensity 

Source: QUEST simulation. 
Notes: policy support to innovation is modelled as 
subsidies to private R&D investment, such as R&D tax 
credits and wage subsidies.  

to 

increase  R&D 
Policy  measures 
intensity  have  yet  to  be  implemented.  In 
2025,  the  Netherlands  received  a  CSR  to 
increase  public  and  private  R&D  intensity  in 
key  strategic  sectors.  The  Dutch  government 
announced  the  action  plan  on  3%  R&D 
investment by 2030, including policy initiatives 
such  as  creating  a  National  Agency  for 
Disruptive  Innovation,  revising  the  industrial 
policy 
like  semiconductors  or 
biotech,  and  developing  regional  innovation 
technology 
clusters  under 

the  national 

in  sectors 

received 
the  Netherlands 
In  2025, 
country-specific  recommendations  (CSRs) 
to increase the level of public and private 
R&D intensity in key strategic sectors, to 
address  the  funding  gap  for  late-stage 
start-ups and scale-ups, and to align the 
taxation  of  different  types  of  income 
from  wealth.  On  R&D,  it  has  announced 
numerous  measures  that  cumulatively  are 
expected to reach 3% of GDP invested in R&D 
by  2030.  This  will  include  R&D  investment  in 
start-ups and scale-ups, but implementation is 
at an early stage (see Annex 1). In addition to 
the  areas  covered  in  the  previous  CSRs,  a 
challenge  is  that  innovation  and  productivity 
growth  appear  increasingly  concentrated  in 
large  incumbent  firms.  Lastly,  the  Dutch  tax 
system still contains distortions.  

Boosting R&D intensity  

Public  R&D  intensity  remains  below  the 
EU average (at 0.67% GDP vs 0.72%) and 
private  R&D  intensity  lags  behind  other 
(non-EU)  innovation  leaders.  The  Dutch 
innovation  ecosystems  can  draw  on  strong 
research  and  innovation  conditions,  but  R&D 
intensity  is  below  the  strongest  performing 
countries  in  the  EU  (Sweden,  Denmark  and 
Finland)  and  below  countries  outside  the  EU, 
such  as  the  US.  R&D  intensity  risks  further 
decelerating  (see  Annex  4).  Closing  the  gap 
with the EU target to invest 3% of GDP would 
require investing EUR 7-12 billion in R&D until 
2030, mainly from the private sector (13).  

The  potential  gains  from  increasing  R&D 
in  QUEST 
investment  are  modelled 

(13) 
https://www.rapportwennink.nl/.  

Wennink 

report 

(2025) 

10 

00.511.522.533.50.00.51.01.52.02.53.03.54.020262027202820292030203520452050Projected R&D intensity (%GDP) - left handR&D intensity (%GDP) as of 2024Total factor productivity (% increase from baseline) - right hand 
 
 
  
strategy  (14).  It  would  be  essential  to  align 
these  initiatives  to  avoid  fragmented  policy 
action.  

Narrowing the productivity gap 

is 

activity 

in  a  few  firms 

increasingly 
Innovation 
concentrated 
in  the 
Netherlands.  It  is  highly  concentrated  in 
large,  established  firms,  with  the  top  three 
companies accounting for a quarter of all R&D 
investment 
in  2023.  Young  and  small 
companies  invest  only  to  a  limited  extent  in 
innovation (15). This is reflected in the regional 
concentration  of  productivity  growth  in  the 
areas of North Holland and North Brabant (see 
Annex  18).  As  a  result,  productivity  growth  is 
incumbent  firms,  and 
mostly  driven  by 
differences  between  firms  in  the  same  sector 
are increasing (16). Initiatives such as extending 
the  scope  of  the  WBSO  R&D  tax  deduction 
scheme  (17)  and  simplifying  it  can  incentivise 
new  and  small  firms  to  engage  in  R&D  and 
drive  productivity  growth  (Graph  2.1).  The 
national  technology  strategy  can  promote 
regional  industrial  ecosystems  and  their  links 
with  research  institutions.  Action  to  support 
companies  in  Groningen  and  North  Drenthe 
have  started  through  the  Economic  Agenda 
Start-up  Capital  Fund  (18)  and  EU-supported 
(19).  However, 
Future  Tech  Ventures 
the 
initiatives adopted so far remain limited.  

There 
is  still  scope  for  productivity 
growth  through  digitalisation  of  SMEs. 
level  of 
Despite  a  comparatively  high 

(14) Action plan on 3% R&D investment by 2030. 

(15) TNO (2025) R&D Top 50 2025.  

(16) CPB (2025): Process of creative destruction weakens in 
the Netherlands | CPB Website. 

(17)  The  Wet  Bevordering  Speur  en  Ontwikkelingswerk, 
‘WBSO’ is a tax deduction scheme for companies and self-
employed that conduct R&D activities. Its latest evaluation 
concludes  that  micro  and  small  businesses  (of  up  to  49 
people)  receive  limited  support  due  to  low  scope  for  tax 
deduction and complex administrative requirements.  

(18)  EUR 60  miljoen  voor  innovatieve  bedrijven  in  Noord-
Nederland | Nieuwsbericht | Rijksoverheid.nl. 

(19)  https://futuretechventures.nl/about/.  

11 

digitalisation  among  Dutch  SMEs,  there  is  a 
significant gap between small and large firms 
in the uptake of advanced technologies like AI 
(36  percentage  points)  and  cloud  computing 
(23  percentage  points)  (see  Annex  4).  There 
are  initiatives  in  the  Netherlands  to  support 
SME  digitalisation  and  automation,  including 
investments  under  the  recovery and resilience 
plan such as AI Learning communities. Further 
action  to  address  these  challenges  could 
include  a  mix  of  fiscal  and  non-fiscal 
measures,  including  digital  adoption  vouchers 
and  grants,  tax  incentives  for  investing  in 
advanced technologies and tailored training to 
boost digital skills in SMEs. In parallel, reducing 
the  complexity  and  fragmentation  of  existing 
schemes, through better coordination between 
lower 
funding 
agencies,  would 
administrative  burdens  and  ensure 
that 
smaller  firms  can  more  easily  access  and 
benefit  from  public  instruments.  Additional 
advisory  support  could  help  SMEs  scale  up, 
integrate  digital  tools  into  core  processes, 
collaborate with larger companies and connect 
with  research  institutions  to  help  narrow  the 
innovation gap with larger firms.  

help 

Closing the funding gap faced by 
start-ups and scale-ups  

remains  a 

The  funding  gap  faced  by  start-ups  and 
scale-ups 
challenge,  as 
outlined in the 2025 CSR, with additional 
signs  of  structural  bottlenecks  in  early-
stage  capital.  Despite  having  access  to  a 
deep  venture  capital  market,  some  Dutch 
start-ups  and  scale-ups  face  difficulties  in 
accessing  funding.  In  particular,  start-ups  can 
face funding constraints at pre-seed stage and 
later  struggle  to  reach  scale-up  status  (20).  A 
lack  of  late-stage  venture  capital  can  lead 
some  Dutch  innovative  companies  to  seek 
financing or relocate abroad (21). This limits the 
Netherlands’  structural  capacity  to  develop 

(20)  State of Dutch Tech Report 2025 - Techleap. 

(21)  EIB 
(2024),  The  scale-up  gap:  Financial  market 
constraints  holding  back  innovative  firms  in  the  European 
Union. 

 
 
 
relatively 

start-ups into large market players (22). Public 
support  for  start-ups  and  scale-ups  has 
so  far  comprised 
limited 
financial  resources.  Public  financial  support 
for  startups  and  emerging  scale-ups  in  the 
Netherlands  is  provided  through  the  Regional 
Development  Agencies (ROMs),  Invest-NL,  and 
financing  schemes  such  as  the  SEED  Capital 
scheme.  However,  this  is  not  sufficient  to 
bridge 
the  financing  gap  for  scale-ups, 
especially  for  funding  rounds  exceeding  EUR 
10-50  million.    The  announcement  of  the 
creation  of  a  National  Investment  Institution 
(NII),  as  an  enhanced  national  promotional 
bank with a focus on start-ups and scale-ups, 
could  help  channel  funding  by  ensuring 
predictability  and  avoiding  fragmented  policy 
action (23). It can also help attract institutional 
investors  such  as  domestic  pension  funds, 
which are the largest in the euro area. The NII 
is expected to become operational in 2028. 

In  addition  to  the  areas  covered  in 
previous  CSRs,  companies  have  limited 
options to exit their investment on public 
markets,  which  can  make  the  ecosystem 
more  reliant  on  external  capital.  The  low 
number  of  initial  public  offerings  (IPOs),  at 
only  1.2%  of  all  exit  transactions  since  2019, 
lead  Dutch  scale-ups  to  seek  acquisition  or 
remain  private.  This  may  inflate  the  need  for 
therefore 
of 
higher 
exacerbating the funding gap problem at late-
stage commercialisation.  

volumes 

funding, 

Reducing distortions in the tax 
system 

Tax  expenditure  in  the  Netherlands  is 
in  scale  and  generates 
substantial 
significant 
the 
distortions 
economy.  This  was  the  subject  of  a  2025 
CSR.  The  Dutch  Ministry  of  Finance  reports 
125  different  tax  expenditure  schemes,  for 
example targeting entrepreneurs, homeowners 
or  VAT  rates,  that  are  estimated  to  result  in 

across 

foregone  revenue  of  EUR 167  billion  in  2025, 
equivalent  to  over  40%  of  total  government 
tax  revenue and 15.6% of GDP.  In addition to 
generating  distortions  in  the  economy,  these 
system 
exceptions 
unnecessarily  complex  for  people,  businesses 
and the tax administration alike (24). 

render 

the 

tax 

significant 

distortions 
Economically 
concentrated 
in  home  ownership  and 
pension tax relief reduce the efficiency of 
capital 
interest 
allocation.  Mortgage 
deductions  and  low  imputed  rent  taxation 
together  create  a  strong  fiscal  bias  towards 
debt-financed home ownership, contributing to 
high  levels  of  household  indebtedness.  These 
schemes impair the functioning of the housing 
market,  increase  wealth  inequality  between 
owners  and  renters,  and  distort  residential 
choices  (see  Section  1).  Pension  tax  relief  is 
one  of  the  largest  tax  expenditures  overall, 
allowing  tax-deductible  contributions  up  to  a 
high  threshold  of  annual  income  and  tax-free 
accrual,  with  taxation  deferred  until  benefits 
are  withdrawn.  Wealthy  individuals  can  also 
hold  their  wealth  in  closely  held  firms,  a 
structure (called ‘Box 2’) which allows them to 
reduce  and/or  postpone  tax  payments.  The 
uneven  tax  treatment  of  different  asset 
classes  relative  to  investment  in  bonds  and 
stocks can also give rise to tax arbitrage.  This 
could  partly  explain  the  high  concentration  of 
household wealth  held  in illiquid forms, which 
may  amplify 
the  severity  of  economic 
downturns and reduce the overall efficiency of 
capital allocation. 

for 

incentives 

Entrepreneurship-related  tax  expenditure 
can  be  ineffective  and  fall  short  of 
innovation. 
providing 
Schemes  such  as  the  SME  profit  exemption 
(MKB-winstvrijstelling) 
reduced 
corporate  income  tax  rate  are  assessed  as 
poorly  targeted.  They  incentivise  the  legal 
status  of  being  an  entrepreneur  rather  than 
underlying  economic  activities 
such  as 
investment,  which  generate 
innovation  or 
positive spillovers for society (25).  

and 

the 

(22)  TNO (2025) Een blik onder de motorkap.  

(23) Action plan on 3% R&D investment by 2030.  

(24)  Ministry of Finance (2025). Kansen voor lagere tarieven 

en beter beleid. 

(25)  Ibid.  

12 

 
 
 
Savings  and  investments  are  also  taxed 
differently  in  different  settings.  Incomes 
from  savings  and  investments  by  households 
are  taxed  at  assumed  rates  of  returns  (called 
‘Box  3’).  The  system  of  assumed  returns  can 
amplify  economic  cycles  if  assumed  rates  do 
not  track  actual  outcomes.  The  government 
has  taken  steps  to  move  to  a  capital  growth 
tax  as  of  2028  that  would  tax  income  from 
assets as well as their appreciation in value.  

the 

tax  burden  on 

Similarly, the reduced VAT rate structure 
is  assessed  as  an  untargeted  and 
inefficient  policy.  Originally  brought  in  to 
ease 
lower-income 
households,  over  time  the  Netherlands  has 
extended the 9% reduced rate to a wide range 
of  goods  and  services  with  varying  policy 
rationales, 
transport, 
including  passenger 
labour-intensive  services  and  cultural  goods. 
Evaluations  (26)  show  that  the  policy  fails  to 
meet  its purpose  of  redistributing  wealth.  The 
top  50%  of  households  by  income  benefit 
approximately  twice  as  much  from  reduced 
rates as the bottom 50%.  

(26)  See footnote 11. 

13 

 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

address 

excessive 

received 
the  Netherlands 
In  2025, 
country-specific  recommendations  (CSRs) 
to  reduce  the  overall  reliance  on  fossil 
fuels, decrease electricity grid congestion 
nitrogen 
and 
deposition  and  the  deteriorating  water 
quality.  Although  the  Netherlands  has  made 
progress  on  certain  aspects,  for  example  by 
adopting  regulatory  solutions  to  alleviate  grid 
congestion,  additional  measures  are  required 
(see  Annex  1).  The  structural  and 
legal 
challenges  the  country  faces  in  achieving 
climate  neutrality  and  the  interim  targets  for 
2030  on  reducing  greenhouse  gases  have 
increased. This is due to persistent shortfalls in 
reducing domestic emissions and the ‘Bonaire’ 
judgment 
in  which  the  Dutch  state  was 
ordered  to  adopt  emission  reduction  targets 
covering  the  entire  economy  (27)  (28).  Meeting 
these  targets  requires  accelerated  action  on 
industrial decarbonisation. 

Roll-out of renewable energy 

The  Netherlands  remains  heavily  reliant 
on  fossil  fuels.  Only  limited  progress  was 
made  on  the  2025  CSRs  to  reduce  overall 
reliance on fossil fuels by accelerating the roll-
out  of  renewables.  The  installed  capacity  of 
solar photovoltaics has increased by 4% since 
capacity 
2024, 
but 
for wind energy stalled at 
11.8 GW in 
2025, compared  to  11.7  GW  in  2024  (see 

installed 

the 

(27)  ECLI:NL:RBDHA:2026:1344, Rechtbank Den Haag, 

C/09/659832 / HA ZA 24-53. 

(28)  While the Dutch government is appealing the Hague 
District Court ruling, the ‘provisionally enforceable’ 
status (uitvoerbaar bij voorraad) ensures that 
compliance remains mandatory during the appeal 
procedure, unless a suspension is granted. For more 
information, see this link. 

Annex 9). The total renewable energy share in 
the Netherlands continues to remain below the 
trajectories  mandated  by 
the  Revised 
Renewable  Energy  Directive  (RED)  (see  Annex 
9). Overall, fossil fuels accounted for 82.6% of 
the total energy mix, comprising oil  at 42.3%, 
natural gas at 34.1%, and coal at 6.2%, while 
renewables 
contributed 
15.08% (see Annex 9). 

biofuels 

and 

of 

chains 

renewable 

Additional action is required to boost the 
The  main 
roll-out 
renewables. 
energy 
for 
bottlenecks 
the  Netherlands  are  grid 
development in 
congestion,  high  network 
tariffs,  volatile 
electricity  prices,  a  lack  of  electricity  demand 
from industry, increased costs in offshore wind 
supply 
hydrogen 
infrastructure  development.  The  development 
of offshore wind capacity in particular stalled, 
with  no  bids  submitted  for  the  tender  for  the 
offshore wind park Nederwiek I-A in 2025. To 
ensure further deployment of offshore wind, it 
is  important  that  investments  in  the  sector 
remain sufficiently attractive. The CfD scheme 
announced 
coalition 
the  2026-2030 
agreement could help to this end (29). 

delayed 

and 

in 

Industrial decarbonisation 

reducing 

its  per  capita  emissions 

The  Netherlands  has  made  progress  in 
in 
reducing 
by 
manufacturing, 
approximately  40%  between  2019  and 
2023.  Despite 
this  progress,  per  capita 
emissions in manufacturing remain above the 
EU  average  (see  Annex  8).  The  Netherlands 
has developed a range of policies that aim to 
decarbonise 
including 
tailor-made agreements and support schemes. 

industrial  sector, 

its 

(29)  For more information, see here. 

14 

 
 
 
 
Alleviating energy grid congestion 

new 

connecting 

Electricity  grid  congestion  remains  a 
major  challenge  in  the  Netherlands,  as 
highlighted  in  the  2025  CSRs.  Congestion 
occurs  at  both  transmission  and  distribution 
network level and are a major obstacle to the 
integration  of  renewable  energy  sources.  Grid 
congestion  prevents  new  connections,  for 
example 
photovoltaic 
installations  to  the  grid.  This  discourages 
renewable energy production that requires grid 
access,  limiting  the  Netherlands’  ability  to 
meet  its  greenhouse  gas  emissions  reduction 
targets and clean energy ambitions (see Annex 
9). Grid congestion is costly,  partly  due to the 
need for redispatching. Congestion poses a risk 
to  the  security  of  supply,  slows  the  transition 
to electric transport, hampers the construction 
of  new  premises  and  constrains  business 
expansion.  This  has  a  knock-on  effect  on  the 
Netherlands’  competitiveness.  Around  14 000 
users are on a waiting list for grid connection 
at  distribution  level,  and  at  transmission  level 
there 
large-scale 
projects (31). 

is  declining 

interest 

in 

It 

coalition 

incentive 

2026-2030 

large  emitters 

agreement 
The 
announced  the  continuation  of  tailor-made 
agreements  and  the  phase  out  of  financial 
incentives  for  fossil  fuels.  However,  the 
the 
coalition  agreement  also  announced 
abolishment of the CO2 levy, a levy introduced 
to 
for 
as  an 
decarbonise. 
the 
is 
abolishment of the CO2 levy will lead to higher 
emissions by  2030  than  the  level  in  the  base 
scenario 
is  therefore 
needed  to  achieve  the  desired  reduction  in 
to 
industrial  greenhouse  gas  emissions, 
support the transition of industrial regions with 
high greenhouse gas emissions (see Annex 19) 
and  to 
low-carbon 
products.  

increase  demand  for 

(30).  Further  action 

expected 

that 

Energy efficiency  

The 2025 CSRs also highlighted the need 
to improve energy efficiency, particularly 
in buildings. Increasing energy efficiency can 
help  tackle  both  energy  affordability  and  grid 
congestion.  

Final  energy  consumption  decreased  only 
in the residential sector, by 21% between 
2019  and  2024,  mostly  driven  by  energy 
savings  through  behavioural  measures, 
policies  and  building  renovations.  Overall, 
final  energy  consumption  (FEC)  in  2024  rose 
by  2.1%  compared  with  2023  to  41.7  Mtoe, 
reversing  the  declining  trend  since  2019  (see 
Annex  9).  To  increase  energy  efficiency,  the 
Netherlands  could,  for  example,  scale  up 
building renovations, expand renewable district 
heating  and  accelerate  the  shift  to  electric 
transport. The 2026-2030 coalition agreement 
announced a ‘National Insulation Initiative’ and 
a  reform  to  improve  rental  properties  with 
poor  energy  labels  by  phasing  out  rental 
properties with energy labels E-G.  

(30)  Notitie CO2-heffing industrie.Toelichting ten behoeve 

(31)  Actualisatie voortgang Landelijk Actieprogramma 

van de overlegtafel CO2-heffing industrie. 

Netcongestie 2025. 

15 

 
 
 
Map 1: Capacity map of the Netherlands, 
March 2026 (offtake of electricity from the 
grid) 

remains  a  challenge.  It  would  therefore  be 
beneficial to work with neighbouring countries 
to maximise cross-zonal electricity trading. 

Energy prices 

high 

relatively 

transmission 

Electricity  and  particularly  gas  prices  in 
the  Netherlands  are  relatively  high 
compared  to  the  EU  average.  Household 
prices  for  gas  decreased  in  the  first  half  of 
2025 but remained significantly above the EU 
average.  Household  prices  for  electricity  also 
decreased,  remaining  below  the  EU  average. 
For  industry,  both  gas  and  electricity  prices 
were  above  the  EU  average  in  2025.  High 
energy  prices make the  business  environment 
less  attractive.  To  ensure  a  level  playing  field 
the 
with  neighbouring  Member  States, 
Netherlands  would  benefit  from  action  to 
tackle  the  high  energy  prices.  This  includes 
reviewing  network  tariffs  as  the  Netherlands 
and 
has 
distribution  tariffs  compared  with  the  EU 
average,  supporting  the  further  roll-out  of 
renewable  energy  sources  and 
increasing 
flexibility. Addressing energy  prices calls for a 
comprehensive  approach  that  considers  the 
interplay  between  energy  prices,  taxation, 
energy  consumption  and  grid  congestion, 
taking  into  account  the  need  to  minimise  the 
fiscal impact of such reforms and preserve the 
price  incentive  to  save  energy  (see  Annex  9). 
Initiatives  designed  to  make  dwellings  more 
energy-efficient,  as  announced  in  the  2026-
2030  coalition  agreement,  can  help  lower 
energy bills for households. Since the outbreak 
of  the  war  in  the  Middle  East  in  February 
2026,  the  Netherlands  adopted  a  number  of 
fiscal  policy  measures  to  mitigate  the  impact 
of high energy prices on households and firms. 
These  include  a  temporary  emergency  energy 
fund for 2026 and 2027  to support the most 
vulnerable  households  with  high  energy  bills 
during  the  next  winter,  a  permanent  increase 
travel  allowance,  and 
of 
temporary reductions of the motor vehicle tax 
rate for delivery vans and trucks for 2026. 

tax-free 

the 

Source: https://capaciteitskaart.netbeheernederland.nl/ 

investments 

reforms  and 

The  Netherlands  is taking  major  steps to 
help  alleviate  grid  congestion  through  a 
combination of investment in the grid and 
regulatory  initiatives.  In  April  2025,  the 
Dutch  government  announced  a  set  of 
to 
legislative 
accelerate expansion of the  transmission grid. 
The  Dutch 
transmission  system  operator 
continues to significantly increase investments 
to  modernise  and  expand  the  transmission 
grid.  Despite  these  initiatives,  grid  congestion 
is expected to remain a major challenge in the 
short to medium term. To speed up permitting 
procedures  for  grid  projects,  the  2026-2030 
coalition agreement announced a ‘crisis act on 
grid  congestion’.  In  addition  to  speeding  up 
to  accelerate 
permitting, 
initiatives  to  incentivise  flexible  grid  use  for 
consumers  and 
local 
industry, 
solutions,  as  highlighted  in  the  Commission 
timely  grid 
guidance  on  efficient  and 
connections  (32).  Improving  electricity  trading 
infrastructure 
using  existing  cross-border 

important 

including 

is 

it 

(32)  Commission Notice – Guidance on efficient and timely 
grid connections, OJ C, C/2025/6703, 19.12.2025.  

16 

 
 
 
 
water bodies currently achieve good ecological 
status.  The  main  pressures  include  population 
density, 
intensive 
land-use  changes  and 
agriculture 
(see  Annex  10).  However,  no 
substantial measures have been adopted. The 
Netherlands  is  currently  preparing  its  8th 
nitrates  action  programme,  which  aims  to 
tackle challenges related to poor water quality. 
Further  measures  are  needed  to  improve  the 
status  of  both  surface  and  ground  water 
bodies,  in  particular  on  the  use  of  fertilisers 
and pesticides.  

Limited progress has been made in taking 
further action on sustainable agriculture, 
as  the  sector  remains  a  major  source  of 
greenhouse gas emissions. The Netherlands 
is  still  not  on  track  to  reduce  its  emissions 
from  agriculture.  The  sector  is  projected  to 
generate greenhouse gas emissions of 21.9 Mt 
CO2-eq  compared  with  the  national  sectoral 
2030  emissions  reduction  target  of  17.9  Mt 
CO2-eq.  Organic  farming  also  remains  limited 
in  scale,  covering  only  a  small  share  of 
agricultural 
the  EU 
average  (see  Annex  10).  Further  policy  action 
would  be  needed,  including  measures  to  help 
farmers  transition  to  sustainable  farming 
practices.  

land  compared  with 

Addressing nitrogen, water and 
agricultural sustainability 
challenges 

This 

Excessive  nitrogen  deposition  continues 
to  affect  both  the  environment  and  the 
wider  economy,  as  highlighted  in  the 
2025  CSRs.  Nitrogen  deposition,  primarily 
from  agriculture,  remains  a  critical  cause  of 
nature  deterioration,  leading  to  eutrophication 
and acidification of soil and water bodies. The 
nitrogen  overload  in  the  Netherlands  also 
continues  to  seriously  restrict  permitting  for 
economic activities that emit nitrogen, such as 
housing  and 
could 
infrastructure. 
potentially cost the country economic losses of 
EUR 4-21.5  billion  between  2024  and 
2030 (33). Moreover, the derogation granted to 
the  Netherlands  under  the  Nitrates  Directive 
expired  on  31 December 2025, 
tightening 
manure  application  requirements  (see  Annex 
10). The Netherlands has taken some steps to 
tackle  these  challenges  by  compensating 
livestock  farmers  for  the  voluntary  closure  of 
their farms (buy-out schemes). In addition, the 
'Nature programme' measure under the Dutch 
recovery  and  resilience  plan  contributes  to 
nature  restoration  in  nitrogen-sensitive  areas. 
However,  the 
impact  of  these  measures 
limited.  The  2026-2030  coalition 
remains 
agreement allocates EUR 20 billion until 2035 
to  planned  measures  to  reduce  nitrogen 
pollution,  including  binding  company-specific 
targets,  area-specific 
emission 
measures  around  vulnerable  Natura  2000 
sites  and 
for 
implementation  of 
farms.  Yet, 
livestock 
concrete measures is still required.  

further  buy-out  schemes 

reduction 

The  deterioration  of  water  quality 
remains  a  major  concern,  as  emphasised 
in the 2025 CSRs. Many Dutch water bodies 
still  fail  to  comply  with  the  Water  Framework 
Directive  and  progress  towards  the  2027 
targets  is  not  on  track.  Almost  no  surface 

(33)https://www.rijksoverheid.nl/documenten/kamerstukken/2

025/07/02/eindrapport-onderzoek-economische-
effecten-stikstofproblematiek.  

17 

 
 
 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

and 

development 

In  2025, 
received 
the  Netherlands 
country-specific  recommendations  (CSRs) 
to  reduce  labour  market  segmentation, 
address 
labour  and  skills  shortages, 
improve education outcomes and address 
expenditure  in  long-term  care.  Since  then, 
several  measures  have  been  adopted  to 
improve labour market functioning, strengthen 
the 
skills 
attractiveness  of  the  teaching  profession. 
However, progress has been limited with major 
aspects of the reform agenda still pending. In 
addition, challenges related to the working and 
living  conditions  of  mobile  and  migrant 
workers  have  become  increasingly  evident, 
raising  concerns  about  job  quality  for  some 
groups  of  workers  and  about  downward 
pressure on labour standards. In the long-term 
care  and  healthcare  sectors,  the  Netherlands 
faces 
rising  costs,  persistent  workforce 
shortages and socio-economic disparities. 

enhance 

Persistent labour and skills 
shortages are a drag on economic 
growth 

for 

called 

Overall, the Dutch labour market records 
strong performance, but labour and skills 
shortages  remain  a  key  challenge.  The 
2025  CSRs 
comprehensive 
measures  to  tackle  the  labour  shortages. 
Although  labour  market  tightness  has  eased 
somewhat,  shortages  remain  widespread  and 
continue  to  constrain  companies’  capacity  to 
expand  production.  The  job  vacancy  rate  is 
among  the  highest  in  the  EU,  with  shortages 
particularly  pronounced  in  sectors  such  as 
ICT,  professional, 
construction,  healthcare, 
scientific 
(e.g. 
technical 
and 
engineering),  and  accommodation  and  food 
services  (see  Annex  11).  Structural  factors 
continue  to  underpin  these  pressures,  as 
demographic ageing and slowing labour supply 

services 

to 

and 

remains  uneven  across 

growth  are  expected 
limit  workforce 
expansion.  A  significant  share  of  recent 
employment  growth  has  occurred  in  relatively 
sectors. 
low-wage 
low-productivity 
Although  as  a  whole,  adult 
learning 
participation  in  the  Netherlands  remains  high, 
participation 
the 
workforce  (see  Annex  13).  Adults  with  low 
levels  of  qualifications,  workers  in  temporary 
or flexible employment, people with a migrant 
background  and  people  outside  the  labour 
force  have  a  significantly  lower  participation 
rate  in  training,  limiting  the  ability  of  lifelong 
learning to support labour market mobility and 
tackle the skills shortages.  

and 

matching, 

improving 

supporting 

limited  among  groups 

Some  measures  have  been  taken  to 
tackle  these  shortages,  but  the  reach  of 
reskilling  measures 
upskilling 
remains 
less 
integrated  in  the  labour  market.  Policy 
labour 
action  has  focused  on 
market 
skills 
development  and  helping  specific  groups  join 
the  labour  market,  including  refugees  and 
asylum  seekers.  Up-  and  reskilling  initiatives 
receive support under the Netherlands’ RRP via 
sectoral  development  paths  and 
training 
programmes  for  the  unemployed.  In  addition, 
there  is  a  training  subsidy  programme  for 
SMEs and regional labour market centres have 
been  set  up  to  improve  coordination  between 
employers  and  jobseekers.  However,  targeted 
outreach to vulnerable groups remains overall 
limited,  and  participation  in  training  continues 
to  be  closely  linked  to  labour  market  position 
and  employment  status.  As  a  result,  people 
with 
in  non-standard 
employment  and  people  with  a  migrant 
background  are  still  less  likely  to  apply  for 
upskilling  opportunities.  Further  action  to  step 
up  targeted  labour  market  measures  and 
improve access to training could help mobilise 
to 
untapped 
promote  better  work-life  balance  and  quality 
of  work,  for  example  by  improving  access  to 

labour  potential.  Measures 

low  skills,  people 

18 

 
 
Graph 4.1: Employment by type (permanent, 
temporary, self-employed), year-on-year 
changes 

affordable  childcare,  may  help  increase  the 
number of hours worked – particularly among 
women, who have one of the highest rates of 
part-time  employment  in  the  EU.  It  may  also 
help  increase  labour  supply  in  sectors  facing 
persistent  shortages.  Overall,  there  has  been 
limited  progress  in  tackling  the  labour  and 
skills shortages. 

Labour market segmentation 
remains a structural challenge 

labour  market 

Labour market segmentation (the division 
into  different 
of  the 
categories  of  workers  with  different 
levels  of  job  security  and/or  access  to 
social  and  other  benefits)  is  still  a 
structural  feature  of  the  Dutch  labour 
market. The 2025 CSR called for measures to 
reduce  the  incentives  to  use  flexible  and 
temporary  contracts,  but  the  prevalence  of 
flexible  employment  arrangements  remains 
high.  Temporary  and  flexible  contracts  and 
self-employment still account for a significant 
share of employment. However, the number of 
self-employed people declined slightly in 2025 
following  recent  reforms  (see  Graph  4.1), 
contributing  to  a  segmented  labour  market 
with differing levels of job security and social 
protection.  Workers 
in  flexible  forms  of 
employment are more often employed in low-
skilled and lower-productivity sectors and tend 
to  receive  less  employer-provided  training, 
which  may  weigh  on  skills  development  and 
labour  mobility.  At  the  same  time,  flexible 
employment  is  more  common  among  young 
people, people with a migrant background and 
workers  with 
levels  of  skills.  This 
compounds  the  risk  of  in-work  poverty  and 
weaker  labour  market  attachment  for  some 
groups. 

lower 

19 

(1) Total employment (thousand), people aged 20-64, 
year-on-year change based on non-seasonally adjusted 
data. 
Source: Eurostat, LFS [lfsq_egaps, lfsq_etgaed]. 

to 

the 

the 

presumption 

taken  several 
The  Netherlands  has 
measures 
labour  market 
tackle 
segmentation,  but  some  key  aspects 
remain  pending.  Reforms  under  the  RRP 
include  a  gradual  reduction  of 
the  tax 
deduction for the self-employed and the lifting 
of 
tax  administration’s  enforcement 
moratorium  on  bogus  self-employment,  with 
the  aim  of  reducing  the  incentive  for  self-
employment  without  employees.  Legislation 
relationships  and 
clarifying  employment 
of 
legal 
introducing 
employment  has  evolved:  a  proposed  bill  has 
been partially withdrawn, with the government 
instead  working  on  a  broader 
initiative 
to  distinguish 
providing  market  guidance 
between self-employed people and employees, 
drawing  on  recent  case  law,  while  advancing 
with  the  part  of  the  law  introducing  the  legal 
presumption  of  employment  for  workers 
earning  less  than  a  certain  hourly  threshold. 
The  plan  to  introduce  mandatory  disability 
insurance  for  the  self-employed,  designed  to 
reduce gaps in social protection coverage and 
create  a  more  level  playing  field  between 
employees  and  the  self-employed,  has  faced 
repeated  delays  and  is  unlikely  to  have  an 
effective  application  before  2030,  despite 
having been submitted to Parliament in March 
2026.  Additional  legislative  proposals  seek  to 

 
 
of 

employer-provided 

of  implementation,  further  policy  efforts  will 
be  needed to address this challenge. Stronger 
enforcement  of  labour  standards  and  of  the 
quality 
housing, 
improved  registration  of  workers  and  clearer 
accountability  across  subcontracting  chains 
would  help  improve  job  quality  and  reduce 
workers’  dependence  on  employers  or 
intermediaries, while ensuring fair competition 
between  firms.  Reducing  the  incentives  (e.g. 
sectoral  subsidies,  tax  advantages  or  low 
pricing  of  external  costs)  for  business  models 
that  rely  on  very  low  labour  costs  would  also 
help  prevent  distortions  in  labour  allocation 
and  a  weakening  of  productivity  growth 
(Annexes 11 and 12). 

The decline in basic skills and low 
STEM participation are risks to the 
country's future competitiveness 

The decline in basic skills poses a risk to 
the  competitiveness  of  the  economy  and 
to  labour  market  outcomes,  as  pointed 
out in the 2025 CSRs. The share of students 
achieving  below-average  PISA  scores  almost 
doubled  between  2012  and  2022 
in 
mathematics and in science, and increased by 
2.5  times  in  reading.  Most  Dutch  students 
perform at low levels on digital skills, and the 
disparities  with  their  parents’  education  are 
among  the  widest  in  the  EU  (34).  Equity  of 
education  remains  a  challenge.  The  share  of 
top performers in mathematics is almost twice 
as  high  as the  EU  average,  but  nearly  half  of 
foreign-born 
in 
mathematics,  with  the underachievement rate 
lower  (37.9%)  among  Dutch-born  students 
with  foreign-born  parents.  Contrary  to  most 
EU  regions,  in  the  Netherlands  students  from 
rural  areas  achieve  higher  PISA  2022  scores 
than  their  urban  peers  and  rank  among  the 
highest  of  all  EU  rural  areas  (see  Annex  18). 
The  interim  evaluation  of  the  ‘Masterplan  for 
basic  skills’  adopted  in  2022  to  assess  its 
impact on student performance is planned for 

underachieve 

students 

(34) 2023 International Computer and Information Literacy 

Study.  

in  more 

predictable 

strengthen job security in flexible employment, 
including  by  abolishing  zero-hours  contracts, 
bringing 
contract 
arrangements  and  improving  safeguards  for 
temporary  agency  workers.  Nevertheless, 
disparities 
in  employment  conditions  and 
access  to  social  protection  across  different 
forms  of  employment  remain  a  structural 
feature  of  the  Dutch  labour  market.  This may 
continue 
training 
investment  and 
labour  market  mobility 
(Annexes 11 and 12). 

job  quality, 

to  affect 

Reliance on mobile labour in low-
wage sectors poses risks to job 
quality and productivity  

workers 

and  migrant 

is  often  organised 

Job  quality  challenges  persist  for  mobile 
and  migrant  workers,  particularly 
in 
labour-intensive  sectors  that  rely  on 
flexible  employment  arrangements.  EU 
mobile 
are 
overrepresented  in  sectors  such  as  logistics, 
meat  processing  and  horticulture,  where 
through 
employment 
temporary work agencies and characterised by 
high  levels  of  contract  instability  and  low 
wages.  In  2024,  the  share  of  workers  on 
limited-duration  contracts  was  significantly 
higher among mobile EU workers and migrant 
In-work 
than  among  nationals. 
workers 
poverty 
higher, 
rates  were  markedly 
for  non-EU  nationals.  These 
particularly 
patterns  reflect  persistent  risks  of  precarious 
working  and 
these 
workers, including limited job  security,  greater 
exposure to occupational risks and dependence 
on  employer-provided  housing.  Beyond  the 
social  implications,  these  dynamics  also  have 
broader macroeconomic effects, with jobs and 
lower-productivity 
resources 
to 
sectors, 
productivity 
thereby 
growth and competitiveness. 

living  conditions  for 

hampering 

shifting 

The government has taken a first step to 
strengthen  oversight  in  the  temporary 
work  agency  sector. 
It  has  adopted 
legislation  introducing  a  mandatory  licensing 
system, due to enter into force in 2027. Since 
potential  loopholes  have  been  flagged  ahead 

20 

 
 
the 

remains 

research, 

the  end  of  the  school  year  2025–2026.  The 
impact  of  the  Ontwikkelkracht  programme, 
which aims to improve the quality of education 
by  helping  schools  use  evidence-based 
limited, 
practices  and 
despite  support  from 
recovery  and 
resilience  plan  for  improving  basic  skills  and 
teaching  quality. 
the 
revised curricula, planned for 2026, remains at 
an  early  stage.  While  keeping  the  focus  on 
effective 
the  adopted 
measures,  the  Netherlands  could  strengthen 
targeted support for underperforming schools, 
foreign-born  students  and  students  with  a 
migrant background, to raise the level of basic 
skills and decrease inequity in education.  

Implementation  of 

implementation  of 

Teacher  shortages  have  eased  but  are 
still  significant.  Shortages  of  qualified 
teachers  and  school 
leaders  undermine 
education  quality.  The  Netherlands  has  taken 
several measures to tackle teacher shortages, 
including  salary  increases,  measures  to  help 
workers  join  the  teaching  profession  from 
other  sectors  and 
the  establishment  of 
educational  regions  to  improve  coordination. 
To  make  the  profession  more  attractive  and 
help  retain  teachers,  the  Netherlands  could 
improve  career  progression,  flexible  working 
including 
and  better  working  conditions, 
lowering 
for 
teachers and more diversified career paths.  

the  administrative  burden 

is 

and 

maths 

The  share  of  pupils 
in  vocational 
education  and  training  and  tertiary 
students  enrolled  in  science,  technology, 
engineering 
(STEM) 
programmes 
low.  The  Netherlands 
received  a  CSR  in  2025  to  boost  participation 
in  STEM  programmes.  Women  and  migrant 
students  are  still  underrepresented  in  STEM 
subjects,  and  specialisation  in  ICT  is  limited 
(see Annex 13). Despite strong overall rates of 
participation  in  higher  education,  there  are 
structural  constraints  across  the  stages  of 
STEM  education,  from  secondary  to  tertiary 
level,  resulting  in  persistent  shortages  of 
technical  and  digital  skills  needed  for  the 
economy to be competitive and innovative.  

impact  remains 

makes  a  limited  contribution  to  overcoming 
the STEM shortages in the Netherlands due to 
the relatively low share of students enrolled in 
STEM-oriented  VET  programmes  (see  Annex 
13).  Several initiatives are being implemented 
to  tackle  the  low  participation  rate  in  STEM 
(e.g.  Techkwadraat,  Sterk  Techniekonderwijs, 
Worden wie je bent, Vrouwen in Techniek), but 
limited  due  to  the 
the 
magnitude  of the skills shortages. To improve 
the rate of enrolment in STEM programmes in 
higher education, further policy action could be 
taken to increase targeted educational support 
and career guidance in secondary education, in 
particular by focusing on education and career 
counselling, 
gender 
stereotypes  in  career  choices.  Improving  the 
retention 
programmes, 
especially  among  women,  requires  stronger 
academic 
facing 
for 
educational  gaps,  and  initiatives  to  promote 
well-being  in  tertiary  education  and  increase 
the  visibility  of  female  role-models  in  STEM 
careers. 

overcoming 

in  STEM 

students 

support 

rates 

and 

Ensuring the sustainability of care 
systems is a growing challenge 

due 

system 

long-term 

faces 
care 
The 
significant 
to 
challenges 
demographic  pressure  and  a  delivery 
model that is  skewed to residential care. 
Overall  spending  on  long-term  care  in  the 
Netherlands reached 3.8% of GDP in 2022, the 
highest in the EU (35). It is projected to increase 
to  5.7%  of  GDP  by  2070.  Despite  the 
implementation of a major reform of the long-
term  care  system  in  2015,  the  proportion  of 
spending  on  and  users  of  residential  care  is 
still  relatively  high.  This  is  partly  due  to  co-
payments  not  being  aligned  across  different 
types  of  long-term  care  benefits.  Action  to 
tackle  this  mismatch  and  to  invest  in  home-
based  and  community-based  care  could  help 
manage  long-term  care  needs  in  a  cost-
effective  manner.  The  coalition  agreement  of 
the  current  government  contains  measures  to 

Vocational  education  and  training  (VET) 
supports  strong  performance  on  the 
school-to-work  transition.  However,  VET 

(35) .2024 Ageing Report – country fiche Netherlands.

21 

 
 
 
 
achieve  structural  savings  of  about  0.2%  of 
GDP. However, most measures are at an early 
stage of design or negotiation. Their impact on 
cost containment and the shift towards home-
based  care  is  not  yet  clear.  While  the  policy 
direction is consistent with the goal to improve 
cost-effectiveness,  so  far  progress  on  the 
2025 CSR appears to be limited. 

Persistent  structural  shortages  continue 
to  increase  workload  pressures  and  job 
strain  in  long-term  care  and  healthcare. 
Hospitals  struggle  to  manage  gaps  in  the 
nursing  workforce  with 
shortages 
particularly acute in nursing homes and home 
care services (see Annex 15). The rise in part-
demanding  working 
time 
conditions  and  difficulties  in  recruiting  and 
retaining  staff  limit  the  systems’  capacity. 
These  challenges  raise  concerns  for  access  to 
quality care and for continuity of care.  

employment, 

the 

Investing in measures to promote health, 
prevent  disease  and  tackle  inequalities 
between  socio-economic  groups  is  key.  In 
the  Netherlands,  inequalities  persist  between 
socio-economic  groups  across  most  lifestyle 
risk  factors  (tobacco  smoking,  dietary  risks, 
alcohol consumption and low physical activity) 
and  in  terms  of  participation  in  prevention 
programmes  (see  Annex  15).  There  are  also 
to 
imbalances 
income-related 
prevention 
healthcare 
services,  which  are  particularly  acute  among 
people with lower levels of education and with 
these 
mental  healthcare  needs.  Tackling 
challenges  is  critical  to  reduce  the  strain  on 
the healthcare and long-term care systems.  

programmes 

in  access 

and 

22 

 
KEY FINDINGS 

The  Netherlands  would  benefit  from  taking 
in  the  following  areas  that  were 
action 
covered  by  previous  country-specific 
recommendations: 

• 

• 

• 

• 

• 

housing 

increasing  access  to  and  the 
affordability 
by 
of 
simplifying  planning  and  permitting 
procedures,  and  construction  rules  for 
housing  development,  making  more 
land 
construction, 
recalibrating  regulated  rents  in  the 
and 
private 
rent 
strengthening 
policies 
social 
tenants; 

income-linked 
for  higher-income 

available 

market 

rental 

for 

by 

out 

phasing 

reducing  distortions  in  the  tax 
system 
tax 
expenditure  schemes, in  particular  the 
mortgage interest deductibility, and by 
decreasing  the  ability  to  delay  and/or 
reduce tax payments by holding assets 
in closely held companies (Box 2); 

increasing  R&D  intensity  by  for 
example  targeting  public  support  to 
the 
investment 
and 
country's 
supporting 
innovation 
ecosystems; 

in  areas  key 
competitiveness 

regional 

to 

improving  access  to  finance  for 
start-ups and scale-ups, and providing 
long-term, predictable public support; 

overall 

reliance 
fuels 

on 
reducing 
(imported) 
by 
fossil 
accelerating  the  roll-out  of  renewable 
energy,  improving  energy  efficiency 
and decarbonising industry; 

•  decreasing 

electricity 

grid 
congestion  by  accelerating  grid 
investment 
incentivising 
projects, 
flexible  grid  use  and  by  maximising 

23 

• 

• 

• 

cross-zonal  electricity  trading  using 
existing cross-border infrastructure; 

tackling  the  issues  of  excessive 
nitrogen 
and 
deteriorating  water  quality  by 
supporting sustainable agriculture;  

deposits 

implementing 

market 
labour 
reducing 
segmentation  by  swiftly  adopting 
and 
a  mandatory 
disability insurance for   self-employed 
job 
strengthening 
persons, 
security in flexible employment; 

and 

underused 

shortages 

labour 
into 

by 
tackling 
labour 
tapping 
potential,  by promoting job quality  for 
mobile  and  migrant  workers  while 
reducing reliance on low-wage, labour-
intensive activities and by encouraging 
workers  to  move  to  high-productivity 
sectors and sectors that tackle societal 
challenges; 

skills 

shortages 

•  promoting  skills  development  and 
tackling 
by 
continuing targeted and tailored active 
labour  market  policies  and  increasing 
access  to  upskilling  and  reskilling 
schemes for specific groups of  people 
who  are  less  integrated  in  the  labour 
market; 

• 

improving  the  level  of  basic  skills 
by  tackling  teacher  shortages  and 
providing 
to 
disadvantaged schools; 

tailored 

support 

in 

tertiary 

•  boosting  rates  of  enrolment  and 
retention 
and 
vocational  education  programmes 
in science, technology, engineering and 
maths  subjects  by  providing  stronger 
academic support and guidance and by 
promoting  these  subjects  to  women 

 
 
students  with 

and 
background; 

a  migrant 

•  ensuring  the  fiscal  sustainability 
of  the  long-term  care  system  by 
allocating  benefits  efficiently,  aligning 
in  the  different  care 
co-payments 
settings, 
in 
prevention and facilitating community-
based services. 

investment 

increasing 

In other areas, the Netherlands would benefit 
from: 

new 

technologies 

•  supporting  SMEs  to  innovate  and 
adopt 
by 
combining  a  mix  of  fiscal  and  non-
fiscal  measures,  such  as  targeted 
vouchers and grants, tax incentives for 
advanced  technologies  and  tailored 
digital  skills 
training  programmes, 
while  reducing  the  complexity  and 
fragmentation  of  existing  schemes,  to 
ease  access  and  lower  administrative 
burden for smaller companies.  

24 

 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

A1.  CSR implementation 

Fiscal 

A2.  Fiscal developments and debt sustainability 

A3.  Taxation 

Productivity 

A4. 

Innovation to business 

A5.  Single market and industry 

A6.  Savings, investment and access to finance 

A7.  Effective institutional framework 

Sustainability 

A8. 

Industry decarbonisation, circularity and climate mitigation 

A9.  Affordable energy transition 

A10.  Climate adaptation, preparedness and environment 

Fairness 

A11.  Labour market 

A12.  Social policies 

A13.  Education and skills 

A14.  Social scoreboard 

A15.  Health and health systems 

A16.  Housing 

Horizontal 

A17.  Sustainable development goals 

A18.  Competitive regions 

A19.  Transport 

LIST OF TABLES 

A1.1. 
A2.1. 
A2.2. 
A2.3. 
A3.1. 
A4.1. 

2025 CSR implementation and Commission assessment 
Supplementary pension schemes - scope for expansion 
Fiscal governance database indicators and public accounting maturity 
Projected change in ageing-related expenditure in 2025-2040 and 2025-2070 
Taxation Indicators 
Key innovation indicators 

27 

30 

33 

33 

37 

41 

41 

47 

54 

61 

68 

68 

77 

83 

93 

93 

97 

100 

105 

106 

110 

116 

116 

118 

124 

29 
34 
35 
35 
37 
45 

 
 
 
Single Market and Industry 
Savings and Investments Union summary diagnostic 
Financial sector indicators 
The Netherlands. Selected indicators on better regulation practices for primary legislation 
Digital Decade key performance indicators: availability of digital public services 
Key clean industry and climate mitigation indicators: The Netherlands 

A5.1. 
A6.1. 
A6.2. 
A7.1. 
A7.2. 
A8.1. 
A10.1.  Key Adaptation Indicators 
A14.1.  Social Scoreboard for Netherlands 
A15.1.  Key health indicators 
A18.1.  Main development trends in the Netherlands 
A18.2.  Key regional indicators (at NUTS 2 level) for the Netherlands 

LIST OF GRAPHS 

Public investment evolution and composition (% of GDP) 
Primary spending evolution and compositional change 
Tax revenue by economic function in 2024, NL (outer ring) and EU-27 (inner ring) 
Tax wedge for single and second earners as a % of total labour costs, 2025 
R&D intensity (gross domestic expenditure on R&D (GERD) as PC of GDP) compared to leader and strong innovators 

Composition of non-financial companies' funding 
Capital markets and financial intermediaries 
Composition of households' financial assets 
Trust in the justice system, regional / local authorities and in government 

A2.1. 
A2.2. 
A3.1. 
A3.2. 
A4.1. 
A5.1.  Manufacturing industry production: total and selected sectors, index (2021=100), 2015-2024 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2.  Most time-consuming aspects of service delivery 
A8.1. 
A9.1. 
A9.2. 
A9.3. 
A11.1.  Job vacancy rates by sector (2019-2025) 
A12.1.  At-risk-of-poverty or social exclusion rate and its components 
A13.1.  Adult learning 
A15.1.  Life expectancy at birth, in years 
A15.2.  Treatable mortality 
A16.1.  House prices, rents and price-to-income evolution in NL and EU27 since 2005 
A16.2.  House supply indicators in NL since 2005 
A16.3.  Housing affordability selected indicators 
A17.1.  Progress towards the SDGs in the Netherlands 
A18.1.  Labour Productivity growth (2014 - 2024) and labour productivity (2024), Netherlands (NUTS 2 regions) 
A19.1.  The Netherlands' road fatalities per million 2024 

Greenhouse gas emissions in the effort sharing sectors, 2005, 2023, and 2024 
Electricity and gas prices for household and non-household consumers, first half of 2025 
Low-carbon electricity generation vs. electricity wholesale prices, 2025 
Netherlands’s installed renewable capacity vs electricity generation mix 

LIST OF MAPS 

A18.1.  GPD per head compared with the EU average. 
A18.2.  Regional Competitiveness Index 
A18.3.  Nationaal Programma Vitale Regio’s (‘National programme for vital regions’) 
A18.4.  House purchase capacity relative to income, NUTS 3, 2024 
A18.5.  Capacity of electricity network 
A19.1.  The Netherlands' road safety map 

28 

52 
53 
59 
61 
63 
75 
91 
104 
106 
119 
120 

32 
33 
36 
38 
41 
51 
54 
55 
56 
60 
62 
70 
77 
77 
79 
93 
96 
102 
105 
105 
109 
110 
113 
115 
117 
125 

119 
119 
122 
122 
123 
126 

 
 
 
 
 
 
ANNEX 1: CSR IMPLEMENTATION  

Table A1.1:  2025 CSR implementation and Commission assessment 

(Continued on the next page) 

29 

The Netherlands faces challenges in a wide range of policy areas, as identified in the country-specific recommendations (CSRs). The Netherlands was recommended, among other things, to support the availability and affordability of housing; to boost R&D and innovation, including better access to finance for start-ups and scale-ups; accelerate the green transition by expanding renewables, improving energy efficiency, and addressing grid congestion as well as addressing excessive nitrogen deposition and the deterioration of water quality; and reduce labour market segmentation, tackle labour and skills shortages, improve basic skills, and increase STEM participation.    The Commission has assessed the degree of implementation of the 2025 CSRs considering the policy action taken by the Netherlands to date*. To do so, the Commission has taken into account the information provided by The Netherlands in its Annual Progress Report as well as other information sources. This annex provides summary information on the policy actions taken or planned by the Netherlands for each CSR. More detailed information on these actions is included in the relevant chapters and other annexes of the report. *CSR 2 is not assessed in CeSaR. RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessm. of progress  1.1 Reinforce overall defence and security spending and readiness while ensuring debt sustainability in line with the European Council conclusions of 6 March 2025. Total general government defence expenditure in 2026 is projected at 1.9% of GDP, corresponding to an increase of 0.3 percentage points compared to 2024.   The government has announced additional efforts to increase defence spending from 2027 to reach 2.7% of GDP in 2030. Total general government defence expenditure in 2027 is projected at 2% of GDP, corresponding to an increase of 0.4 ppt. compared to 2024. Substantial progress 1.2 Ensure that net expenditure respects the path recommended by the Council on 21 January 2025. Annual and cumulated deviations in 2025, vis-à-vis the Council Recommendation of 21 January 2026, amounted to 1.5% of GDP and 1.0% of GDP, respectively. In April 2026, the Netherlands has submitted a revised medium-term plan, covering the period 2026-2030. The adoption by the Council of a new net expenditure path would lead to a resetting of the preventive arm control account. The annual deviation in 2026, vis-à-vis the net expenditure path included in the revised plan, is projected at 0.1% of GDP.  Limited progress 1.3 Align the taxation of different types of income from wealth, among others to reduce incentives for debt-financed homeownership. Speed up the phase out of the deduction for no or a low mortgage debt (Wet Hillen) (small measure) Adoption of reform ‘Actual return box 3 law’ by 2nd chamber of parliament. Effective application foreseen for 1 January 2028. Limited progress 1.4 Remove obstacles for the construction of new dwellings by simplifying planning and permitting procedures. Realisatiestimulans: EUR 2.5 billion until 2029 to municipalities for newly constructed affordable dwellings  Woningbouwimpuls: EUR 515 million until 2029 for CSR projects with a public funding deficit Housing Management Enhancement Act: The act aims to streamline the planning process, permit issuance, and legal procedures.   Amendments to the building regulation: it simplifies the building regulation, thereby reducing construction costs. Some progress  
 
 
 
      
 
Table (continued) 

(Continued on the next page) 

30 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessm. of progress  1.5 Support the development of an affordable private rental sector, including by making investments in the sector more attractive. Reduction in transfer tax on non-primary residence dwellings (small measure)  Limited progress 1.6 Address the expected increase in age-related expenditure in long-term care (LTC) by making the system more cost-effective, including by allocating benefits more efficiently. Action plan based on various players in the LTC system to reduce administrative burden on employees and simplify provision of care. No implementation of changes to the structure of the LTC system. Envisaged reform to rebalance system towards home-based care in coalition agreement. Some progress 3.1 Enhance public and private R&D intensity by targeting support to investments in key strategic technologies. No progress in implementation, but actions outlined in the 3% GDP Action Plan, as well as the plans for the National Technology Strategy, are fully in line with the CSR. Creation of a National Agency for Disruptive Innovation (NADI) to support high-risk R&D projects and promote collaboration between SMEs, large firms and research institutions.  Implementation of the National Technology Strategy on 10 key technologies  R&D tax credits accessible for start-ups Limited progress 3.2 Address the funding gap for late-stage start-ups and scale-ups by leveraging available financing tools and providing incentives to attract institutional investors Very limited implementation.  Invest-NL (National Promotional Bank):   • EUR 250 m Blended Finance for start-ups/scale-ups • Fund-to-fund instrument to attract institutional investors Reinforcement of Invest-NL (National Promotional Bank) with additional funding and a new mandate: focus on loans and equity on start-ups and scale-ups  R&D tax credits accessible for start-ups Limited progress 4.1 Reduce overall reliance on fossil fuels Law on the ban on the use of coal for electricity production.   Support schemes for the electrification of the transport sector, including SEPP and AanZET (RRP).  State participation in Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU). Limited progress 4.2 by accelerating the roll-out of renewables and improving energy efficiency, particularly in buildings. Support schemes for renewables / energy efficiency, including SDE++ and ISDE (for dwellings, in the RRP), National Heat Fund (loans for renovations), SVVE (for associations of homeowners).   State participation in district heating projects. Contract for Difference (CfD) scheme for offshore wind.   Continuation of SDE++  Phase out of labels E, F and G for rental dwellings. Some progress 4.3 Decrease electricity grid congestion by increasing the capacity of the transmission and distribution grid, implementing flexibility solutions, maximising cross-zonal trade, and further Energy Act enabling more flexible grid use and energy sharing Grid Congestion Crisis Act  Implementation of revised of Transmission System Operator (TSO) working procedures  Grid expansion designated as Some progress  
 
 
      
 
Table (continued) 

Source: The Netherlands' reporting and Commission assessment 

31 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessm. of progress  simplifying permitting procedures. Overriding Public Interest  4.4 Implement structural measures to address excessive nitrogen deposition and the deterioration of water quality effectively, especially by making further efforts for sustainable agriculture. Voluntary termination schemes for livestock farms  Sector-specific nitrogen emission reduction targets   Area-specific measures around vulnerable Natura 2000 areas  Termination and extensification schemes for livestock farms  Limited progress 5.1 Adopt and implement measures to reduce incentives to use flexible or temporary contracts. Law to tackle abuses at employment agencies. Effective application 1 Jan 2027. Law providing more security to flex workers Limited progress 5.2 Implement comprehensive measures to address labour and skills shortages, including by tapping into underused labour potential, by strengthening upskilling and reskilling opportunities for all through targeted and tailored active labour market policies, and by encouraging mobility to high-productivity sectors and sectors related to societal challenges. Facilitation of childcare, functional regional work centres for job seekers and employed, sectoral development pathways established Lifelong learning in shortage sectors and for flexible contracts, fulltime bonus, pilot to attract foreign workers, free childcare Limited progress 5.3 Improve basic skills, including by addressing teacher shortages and tailored support to disadvantaged schools Masterplan for basic skills, curriculum reform, Teacher strategy, Ontwikkelkracht (school improvement), subsidies for priority schools.   Address learning deficiencies at an early age, professional development of teachers, less admin burden for teachers, facilitate career switch to become teacher, even higher priority to reading, writing and math in curriculum Some progress 5.4 Boost participation in STEM programmes by targeted educational support and career advice, especially for women and students with a migrant background. National reinforcement microchip talent plan, Action Plan Green and Digital Jobs   Lifelong learning for shortage sectors, schools are required to address gender and migration background in attracting more STEM students Limited progress   
 
     
 
FISCAL 
ANNEX 2: FISCAL DEVELOPMENTS AND DEBT SUSTAINABILITY 

in 

spending 

developments 

This annex discusses selected topics in public 
finance  and 
fiscal-
structural  country-specific  recommendations 
(CSRs)  addressed  to  the  Netherlands  in  July 
2025.  These  CSRs  include  a  call  to  strengthen 
defence 
readiness  while 
and 
implementing  a  fiscal  strategy  in  line  with  the 
Council Recommendation of 21 January 2025. The 
Netherlands also received recommendations to: (i) 
align  its  taxation  of  different  types  of  incomes 
from  wealth;  (ii)  reduce  incentives  for  debt-
financed  home  ownership;  (iii)  remove  obstacles 
for the construction of new dwellings; (iv) support 
the  development  of  the  private  rental  sector;  and 
(v)  address  the  expected  increase  in  ageing-
related expenditure in long-term care. 

for 

(36). 

On 21 January 2025, the Council adopted the 
Recommendation setting the net expenditure 
path 
The 
the  Netherlands 
recommendation  sets  a  fiscal  adjustment  over 
four  years  (37).  The  Netherlands  has submitted a 
revised  medium-term  plan,  covering  the  period 
2026-2030. The endorsement by the Council  of a 
new net expenditure path would lead to a resetting 
of  the  preventive  arm  control  account  (see  Annex 
1). 

to increase to 2.5 %  of  GDP  in  2026 and 1.9 %  of 
GDP in 2027.  The increase of the deficit in 2026 
mainly  reflects  the  temporary  effect  of  a  reform 
of  the  military  pension  system  that  requires  a 
transfer  of  approximately  0.7%  of  GDP  from  the 
government  to  a  private  pension  fund.  The  debt-
to-GDP  ratio  to  increase  to  46.9%  by  the  end  of 
2026  and  to  remain  broadly  stable  at  47.0%  by 
the end of 2027. The increase government debt in 
2026  mainly  reflects 
loans  to  TenneT,  the 
electricity  transmission  system  operator  of  the 
Netherlands,  and  to  EBN,  the  state  energy 
company.  

investment 

rising  public 

is 
Moderately 
improving  the  quality  of  expenditure  in  the 
Netherlands. Although the pandemic led to some 
cuts in public investment, those cuts bottomed out 
investment  has  been 
in  2022,  and  public 
increasing  moderately 
Public 
then. 
investment  is  now  expected  to  reach  3.5%  in 
2026, up from 3.4% in 2019. Public investment is 
also  set  to  further  increase  in  2027,  driven  by 
greater investment in defence. The Netherlands is 
projected  to  spend  more  on  nationally  financed 
investment in 2027 than it did before the COVID-
19 pandemic.  

since 

Developments in the government 
deficit, debt and public expenditure  

Graph A2.1: Public investment evolution and 
composition (% of GDP) 

At  the  end  of  2025,  the  government  deficit 
of  the  Netherlands  amounted  to 1.6%  of 
GDP and the  government  debt-to-GDP ratio 
to 44.4% 
the 
amounted 
Commission Spring 2026 
the 
Netherlands’  government  deficit is  projected 

(38). Based 

Forecast, 

on 

(36)  OJ C, C/2025/648, ELI: Council Recommendation of 21 
January 2025 setting the net expenditure path of the 
Netherlands. 

(37)  Compliance by the Netherlands with the maximum growth 
rates of net expenditure recommended by the Council is 
assessed in COM(2026)200. 

(38)  Figures underpinning fiscal surveillance (net expenditure 
growth) are provided in the Fiscal Statistical Tables  
SWD(2026)200 providing background data relevant for the 
assessment of the budgetary policies of the Member States.

Source: Spring Forecast. 

The  type  of  expenditure  that  has  a  greater 
impact  on  GDP  had  remained  broadly  stable 
over three decades, but it started increasing 
again since 2022. Zooming in on the composition 

32 

 
 
 
 
 
 
  
 
 
1.5 pp. increase between 2040 and 2070 (see 
Table A1.1). This overall increase is the result of 
a  projected  rise  in  expenditure  on long-term  care, 
pensions  and  healthcare.  Public  healthcare 
expenditure  is  projected  to  be  5.8%  of  GDP  in 
2025  (below  the  EU  average  of  6.6%)  and  is 
expected to increase by 0.3 pps by 2040 and by a 
further 0.3 pps between 2040 and 2070.  

Graph A2.2: Primary spending evolution and 
compositional change 

of  spending,  social  protection  accounted  for  the 
largest share of total expenditure (37%), followed 
by health and education (each above 10% of total 
spending) in 2024.  Since 2019, public expenditure 
on  general  public  services  and  defence  has 
in  defence 
increased  strongly,  with  the  rise 
spending  reflecting  recent  security  developments 
(See  Graph  A2.3).  Spending  on  housing, 
environment  and  other  economic  affairs  (39)  has 
risen  more  modestly  since  2019.  By  contrast, 
spending on R&D, transport, education and health 
expenditure  has  declined.    This  trend  deserves 
attention,  as  these  three  categories  are  generally 
considered growth-friendly spending categories. In 
particular,  the  decline  in  education  spending  is 
especially  concerning  given  the  recent  drop  in 
educational  performance  in  the  Netherlands  (See 
Annex 13 for further details). 

in 

with 

contributions) 

social 
compared 

Tax  revenues  as  a  share  of  GDP  in  the 
line  with  the  EU 
Netherlands  are 
average. In  2025,  total  Dutch  tax  revenues 
expressed  as  a  percentage  of  GDP  (including 
amounted 
compulsory 
EU 
an 
to 38.8% 
average of 39.9%. Total tax revenues are projected 
to fall  to 39.1%  of  GDP  in  2026  and 40.0 %  of 
GDP  in  2027  according  to  the  Spring  2026 
the 
Forecast. 
diversified, some tax 
Netherlands is 
types  that  are  considered  less  detrimental  to 
growth (such as recurrent property taxes) yield tax 
revenue as a percentage of  GDP that  is  below  the 
EU  average (0.6%  of  GDP  vs  EU  average  of  0.9% 
of GDP) (see Annex 3).   

the tax  mix in 

relatively 

Although 

The costs of ageing 

Total  ageing-related 
the 
Netherlands  is  projected  to  rise  by  about 
2 pps  of  GDP  between  now  and  2040,  to 
around  23%  of  GDP,  with  an  additional 

spending 

in 

(39)  This  refers  to  the  set of  government  activities,  policies,  and 
expenditures aimed at regulating, supporting, and developing 
economic  activity  across  major  sectors,  including  general 
economic  and 
labour  policies,  agriculture  and  natural 
resources, energy, industry, construction, and other economic 
functions  not  elsewhere  classified.  Although  transport  and 
communication,  as  well  as  research  and  development 
activities, are normally considered part of this function, they 
are treated separately in the graph presented. 

33 

Source: Eurostat Note: Based on economic literature, the 
categories considered to have a greater growth impact 
include education, R&D, health, transport and communication 
(See Barbiero and Cournede (2013), Gemmel et al. (2016), 
Lupu et al. (2018), Cepparulo and Mourre (2020) and OECD 
(2025)).   

Public  expenditure  on  long-term  care  is  projected 
to be 3.9% of GDP in 2025, significantly above the 
EU  average  of  1.7%.  It  is  expected  to  further 
increase  by  0.9  pps.  of  GDP  between  2025  and 
2040  and  by  a  further  0.9  pps  of  GDP  between 
2040 and 2070.  

Public pension spending as a share of GDP is 
projected to increase by about 1 pp. over the 
next  decades  and  by  a  little  under  2 pps 
between  2025  and  2070.  At  8.5%  of  GDP  in 
2070,  projected  gross  spending  on  public  pension 
benefits would be below the projected EU average 
of  12%. 
In  the  Netherlands,  the  uptake  of 
remains 
supplementary 
significant:  by  the  end  of  2024,  private  pension 
assets  were  equivalent  to  around  150%  of  GDP 
and  participation  covered  around  97%  of  the 

schemes 

pension 

101520404550200720082009201020112012201320142015201620172018201920202021202220232024a) Evolution (% of GDP)Primary expenditureSpending with higher impact on GDP (rhs)-1.0-0.8-0.6-0.4-0.20.00.20.40.60.81.0SocialprotectionHealthInterestspendingEducationCultureR&DTransportCommunicationPublicorderHousingOther economicEnvironmentDefenceGeneralservicesb) Compositional change 2024-2019 (% of total spending) 
 
  
Table A2.1:  Supplementary pension schemes - scope for expansion 

forecast  underlying 

narrow  mandate,  consisting  of  monitoring  the 
government’s compliance with fiscal rules. Another 
organisation, the Netherlands Bureau for Economic 
Policy Analysis (CPB), is a long-standing and well-
resourced institution, with the IFI task of producing 
the  macroeconomic 
the 
government’s  budgetary  plans.  The  CPB  has  a 
strong  media  presence.  The  CoS  –  AD  is  deeply 
embedded  in  the  Dutch  Council  of  State  as  a 
whole,  which  might  both:  (i)  make  it  difficult  to 
create  a  clear  IFI  identity;  and  (ii)  complicate 
name/role recognition among the public, especially 
since  the  CPB  may  be  the  better-known  fiscal 
surveillance  institution  in  the  Netherlands.  Some 
features  that  are  important  for  IFI  independence 
and  effectiveness,  such  as  access  to  information 
and  having  an  active  policy  dialogue  with  the 
government,  have  in  the  Netherlands  so  far  been 
upheld  via  tradition  and  tacit  agreements  rather 
than via legal protections, but recent legal changes 
are meant to introduce such protections. 

Source: European Commission 

working-age  population  (40).  This  coincides  with 
rising  medium-term  public  pension  spending 
pressures  and  a  projected  decline 
the 
replacement  rate  by  6.1 pps  between  2025  and 
2040 (Table A2.2 and A2.3) (41).  

in 

the  Netherlands 

The projected increases in public spending on 
long-term care, due to an ageing population, 
pose  a  risk  to  fiscal  sustainability  in  the 
medium and long term for the Netherlands. In 
2025, 
received  a  CSR  on 
addressing  this  expected  increase  in  long-term 
care  expenditure,  as  it  creates  a  significant  fiscal 
risk. Despite the implementation of a major reform 
of  the  long-term  care  system  in  2015,  the 
relatively  high 
Netherlands  still  spends  a 
proportion  of  total  expenditure  on  recipients  of 
long-term institutional care in comparison to other 
EU Member States. There seem to be a number of 
reasons  for  this,  including:  (i)  co-payments  not 
being  aligned  across  different  types  of  long-term 
care  benefits  to  induce  recipients  to  choose  the 
care  setting  that  is  most  cost-effective  for  their 
care  needs;  (ii)  the  lack  of  broader  criteria  to 
assess  each  individual’s  need  for  care;  and  (iii) 
incentives  for  municipalities  to  shift  responsibility 
for  recipients  to more  expensive institutional  care 
settings,  which  is  financed  at  national  level  (see 
Section 4 of the country report narrative). 

National fiscal framework 

The  Netherlands  has  two  institutions  that 
perform  the  tasks  of  an  independent  fiscal 
institution  (IFI).  The  Council  of  State  –  Advisory 
Division  (CoS  –  AD)  is  a  small  IFI  with  a  very 

(40)  Source:  OECD  Pension  Market  in  Focus  2025.  The  highest 
participation rate in at least one supplementary pension plan 
is reported.   

(41)  The  (gross)  replacement  rate  refers,  depending  on  data 
availability,  to  both  public  and  private  pensions.  It  is  based 
on projections from the 2024 Ageing Report.  

34 

Assets in 2024 (% GDP)Participation in 2024 (% working-age population)NL150.9-6.197.4NLEU32.4-2.855.9EUGross replacement rate at retirement: (pps change 2025-2040)  
 
 
  
 
Table A2.2:  Fiscal governance database indicators and public accounting maturity 

(1)  "The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level 
based on: i) the legal base; ii) how binding the rule is; iii) monitoring bodies; iv) correction mechanisms; and v) resilience to shocks. 
The Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on: i) coverage of the 
targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the 
annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal 
institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. 
The score for public accounting reflects the degree of maturity in relation to the International Public Sector Accounting Standards 
(IPSAS). Countries with an accounting maturity of 70% or more in relation to IPSAS are deemed to apply accrual accounting. For 
more information, see the report on public accounting in the EU (COM(2025)746 and accompanying Staff Working Document 
SWD(2025)396)." 
Source: Fiscal Governance Database, European Commission 

Table A2.3:  Projected change in ageing-related expenditure in 2025-2040 and 2025-2070 

Source: 2024 Ageing Report (EC/EPC) 

in 

spending 

review  process 

the 
The 
is  mature,  systematic  and 
Netherlands 
Interdepartementaal 
The 
institutionalised. 
Beleidsonderzoek  (IBO)  was  established  in  1980. 
Spending  reviews  are  publicly  available  and  cover 
3-7  different  government  expenditure  areas  each 
year.  There  is  strong  institutional  integration,  as 
reviews  are  run  by  staff  from  the  Ministry  of 
Finance  and  line  ministries.  The  spending  review 
provides options to achieve  10-20% reductions in 
spending  in  the  areas  subject  to  the  spending 
review over a four-year period. 

Accrual  accounting  improves  transparency 
over  a  public  body’s  financial  position  and 
performance 
support 
sustainability  and  intergenerational  equity. 
Most  (14)  Member  States  have  implemented 
accrual accounting across the general government 

also 

and 

can 

sector and five are set to do so by 2030  (42). The 
Netherlands  lags  behind  the  EU  average  for  the 
introduction  of  accrual  accounting  (see  Table 
A2.2), in particular at the central government level. 
The  country  has  no  medium-term  plans  to 
transition towards accrual accounting (43).  

(42)  Report on public accounting in the EU (COM(2025)746 and 
accompanying Staff Working Document SWD(2025)396). 
Countries with an accounting maturity of 70% or more in 
relation to International Public Accounting Standards are 
deemed to apply accrual accounting. 

(43)  Annexes 3.1 and 3.4 of SWD(2025)396. 

35 

2024The NetherlandsEU AverageCountry Fiscal Rule Strength Index (C-FRSI)19.9314.81Medium-Term Budgetary Framework Index (MTBFI)0.950.722025 Public accounting maturity of general government53%65%NL21.01.10.30.9-0.32.123.1NLEU24.30.50.30.4-0.30.925.2EUNL21.01.70.71.8-0.63.524.5NLEU24.30.20.60.8-0.31.325.6EUageing-related expenditure change in 2025-2070 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotalageing-related expenditure change in 2025-2040 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotal 
 
 
 
 
  
 
 
  
 
ANNEX 3: TAXATION 

the 

information  on 

This  annex  provides  an 
indicator-based 
overview  of  the  Netherlands’  tax  system.  It 
includes 
tax  mix,  on 
competitiveness  and  fairness  aspects  of  the  tax 
system,  and  on  tax  collection  and  compliance. 
Furthermore,  it  provides  information  on  risks  of 
aggressive  tax  planning  activities.  In  the  area  of 
taxation, 
country-specific 
2025 
recommendations  for  the  Netherlands  highlighted 
challenges 
taxation, 
particularly  with  regard  to  incentives  for  debt-
financed homeownership. 

the  area  of  capital 

the 

in 

The  Netherlands’  tax  revenue  and  tax  mix 
are  in  line  with  the  EU  average.  In  2024,  the 
Netherlands’  tax  revenues  as  a  percentage  of  its 
GDP  amounted  to  38.8%,  just  slightly  below  the 
EU  average  of  39.4%.  The  structure  by  economic 
function  is  very  similar  to  the  EU  aggregate  (see 
Graph A3.1).  In  2024,  labour  taxation  was  the 
largest  revenue  source  (19.0%  of  GDP  vs.  EU 
average  of  20.3%),  followed  by 
taxes  on 
consumption  (11.2%  of  GDP  vs.  EU  average  of 
10.6%)  and taxes  on  capital  (8.7%  of  GDP vs.  EU 
average of 8.5%). Revenue from VAT amounted to 
7.0%  of  GDP  (vs.  EU  average  of  7.1%).  See 
Table A3.1. 

Graph A3.1: Tax revenue by economic function in 
2024, NL (outer ring) and EU-27 (inner ring) 

Source: Taxation Trends Data, DG TAXUD 

There  is  scope  to  further  reduce  incentives 
for  debt-financed  homeownership.  In  2025, 
received  a  country-specific 
the  Netherlands 
recommendation  that  highlighted  the  need  to 
reduce  distortions  in  the  tax  system  by  better 
aligning  the  taxation  of  different  types  of  income 
from  wealth,  among  others  to  reduce  incentives 
for 
More 
specifically,  the  Netherlands  provides  tax  benefits 
in  the  form  of  generous  mortgage  interest  tax 
relief  for  primary  residence  properties,  coupled 

homeownership. 

debt-financed 

with  a  very  low  effective  tax  burden  on  imputed 
rents  from  homeownership  (even  though  this 
effective  tax  burden  will  marginally  increase  per 
2026). Consequently, there is a high concentration 
of  household  wealth  in  illiquid  types  of  wealth, 
which  may  increase  the  severity  of  economic 
downturns and encourage tax planning strategies. 

by 

and 

increasing 

The  mortgage  interest  tax  relief  scheme 
fuels  housing  market  strain,  but  policy 
reform  remains  off  the  table.  The  mortgage 
interest tax relief scheme has been found to have 
a  negative  impact  on  macroeconomic  stability  by 
increasing  volatility  and  driving  up  prices  in  the 
housing  market, 
the 
accumulation  of  household  debt.  The  mortgage 
interest  tax  relief  scheme  is  thus  linked  to  the 
overvaluation  of  the  Dutch  housing  market  (see 
Annex 16).  That  leads,  in  turn,  to  higher  rental 
prices  on  the  private  rental  market,  especially  in 
the  mid-range  price  category.  The  high  rental 
prices  are  a  major  source  of  financial  strain  for 
many  households.  However, 
the  2026-2030 
coalition  agreement  states  that  the  Netherlands 
will  not  touch  the  mortgage  interest  tax  relief 
scheme. 

the 

increase 

is  scope 

There 
tax 
to 
administration’s  enforcement  in  the  field  of 
bogus  self-employment.  Past  policies  have 
created  an  unequal  playing 
field  between 
employees  and  (solo)  self-employed  individuals 
and have also enabled bogus self-employment. In 
recent  years,  the  government  has  implemented 
various  measures  to  lower  incentives  for  the  use 
of self-employment. These aim to limit bogus self-
employment  and  reduce  the  differences  between 
the  self-employed  and  employees.  One  of  those 
tax 
measures  was 
the 
for 
administration’s  enforcement  moratorium 
bogus  self-employment  as  of  1 January 2025  (in 
line  with  the  commitments  in  the  Dutch  recovery 
and  resilience  plan).  The  moratorium  had  been  in 
place since 2016. However, the tax administration 
qualified 2025 as a ‘soft landing’ or transition year 
with respect to the moratorium, which meant that, 
levied.  The  tax 
in  principle,  no  fines  were 
full 
administration 
enforcement as of 2026. 

the  abolition  of 

started  with 

(nearly) 

The tax wedge for medium- and in particular 
low-wage  earners  is  below  the  EU  average, 
whereas  the  one  for  high-wage  earners  is 
higher  than  the  EU  average.  In  2025,  the  tax 
wedge for single persons at 50%, 67% and 100% 

36 

51.526.821.649.028.722.3Taxes on labourTaxes on consumptionTaxes on capital 
 
   
 
 
Table A3.1:  Taxation Indicators 

(1) Forward-looking effective tax rate (KPMG).  
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2024. EU-27 refers to the median value. For more data on tax revenues as well as the methodology 
applied, see the Data on Taxation Trends webpage. 
Source: European Commission, OECD, ISORA. 

of  the  average  wage  amounted  to  26.2%,  30.7% 
and 38.6% and was below the EU average. Earners 
of  high  wages  at  167%  of  the  average  wage 
faced  a tax  wedge  of  46.9%  and  were  above the 
EU average. Second earners that take up a job  at 
67% of the average wage and whose partners are 
at the average wage face a lower tax wedge than 
single persons at the same wage level, contrary to 
the EU average (see Graph A3.2) (44).  

The  progressive  income  tax  system  in  the 
Netherlands  reduces  income  inequality  more 
than  the  EU  average.  In  2024  the  reduction  in 
income 
inequality,  as  measured  by  the  Gini 
coefficient,  was  10.6 pps,  surpassing  the  EU 

(44)  The  tax  wedge  is  an  indicator  of  the  tax  burden  on  labour 
that  can  be  assessed  at  various  levels  of  earnings.  It  is 
defined as the sum of personal income taxes, employee and 
employer  social-security  contributions  and  other  mandatory 
contributions,  expressed  as  a  percentage  of  total  labour 
costs  (composed  of  the  net  wage,  personal  income  tax, 
social 
contributions,  and  other  mandatory 
contributions).  Tax  wedge  data  in  the  2026  country  reports 
are calculated by the Joint Research Centre of the European 
Commission and based on the EUROMOD model, while in the 
past  country  reports  they  were  based  on  the  OECD  tax  and 
benefit  model.  While  the  underlying  methodology  is  very 
similar, differences in the assumptions can lead to different 
results between both models.  

security 

average  reduction  of  7.8 pps (45).  In  contrast, 
wealth  inequality  in  2024  is  relatively  high in  the 
Netherlands  as  compared  to  its  European  peers 
(46).  However,  according  to  a  study  by  Statistics 
Netherlands wealth inequality as measured by the 
Gini  coefficient  fell  sharply  between  2015  and 
2022  due  to  rising  housing  prices,  namely  by  9.5 
pps (47).  This  could  be  related  to  the  fact  that, 
whereas an owner-occupied home is overall often 
the  main  asset  of  a  household,  wealthier 
households hold a lower share of their total assets 
in  the  form  of  real  estate  (48).  Also,  it  should  be 
noted that the relatively high pension entitlements 
in the Netherlands are not counted as ‘wealth’ (as 
they are not freely available and transferable). 

(45)  The Gini  coefficient measures  the  extent  to  which  the 
distribution  of  income  within  a  country  deviates  from  a 
perfectly  equal  distribution.  A  coefficient  of  0  expresses 
perfect equality where everyone has the same income, while 
a coefficient of 100 expresses full inequality where only one 
person has all the income. 

(46)  UBS  (2025),  ‘Global  Wealth  Report  2025:  Crafted  wealth 

intelligence’, UBS.  

(47)  See  Pen’s  Parade  –  Table  of  wealth  distribution  in  the 

Netherlands in 2024. Central Statistics Bureau 

(48)  For the share of total assets held in real estate for different 
wealth quantiles see Annex I of Leodolter, A., S. Princen and 
A.  Rutkowski  (2022),  “Immovable  Property  Taxation  for 
Sustainable  and 
(European  Economy 
Discussion Paper 156). 

Inclusive  Growth” 

37 

2019202220232024202520192022202320242025Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)39.238.239.238.839.939.739.039.4Taxes on labour (% of GDP)19.718.317.919.020.620.119.920.3of which, social security contributions (SSC, % of GDP)13.812.612.312.113.012.712.713.0Taxes on consumption (% of GDP)11.811.211.311.211.210.910.510.6of which, value added taxes (VAT, % of GDP)7.07.17.27.07.17.47.17.1Taxes on capital (% of GDP)7.78.610.08.78.18.78.58.5Personal income taxes (PIT, % of GDP)8.37.89.19.89.69.49.39.6Corporate income taxes (CIT, % of GDP)3.54.74.94.32.63.23.23.1Total property taxes (% of GDP)1.61.61.41.32.22.11.91.8Recurrent taxes on immovable property (% of GDP)0.80.70.60.61.21.00.90.9Environmental taxes (% of GDP)3.62.92.93.02.62.12.12.1Effective carbon rate in EUR per tonne of CO2 equivalentsnana120.0nanana84.8naTax wedge at 50% of average wage (single person) (*)30.328.125.724.826.232.431.631.531.531.6Tax wedge at 100% of average wage (single person) (*)41.039.639.038.738.640.139.739.939.940.0Corporate income tax - effective average tax rates (1) (*)22.822.822.823.520.019.219.019.3Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.19.610.010.67.88.07.97.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)6.011.79.5na31.832.630.7naVAT gap (% of VAT total tax liability, VTTL) (**)11.29.67.07.310.57.38.2naEU-27NetherlandsProgressivity & fairnessTax administration & complianceBy tax baseSome tax types 
 
 
 
   
 
The  2026  tax  plan  contains  measures  that 
affect the tax brackets and rates in personal 
income  tax.  In  the  Netherlands,  the  tax  brackets 
are adjusted annually using a statutory correction 
factor  (tabelcorrectiefactor).  This  factor  is  based 
on  the  average  price  development  from  the 
previous  year.  Based  on  inflation  figures  from 
mid-2024  to  mid-2025,  the  statutory  correction 
The 
factor  was  determined 
government decided not to apply the full inflation 
correction  for  personal  income  tax  purposes,  but 
only  for  52.8%.  This  means  that  for  2026  the 
inflation  adjustment  is  1.5312%  (i.e.  52.8%  of 
2.9%). 

to  be 2.9%. 

Graph A3.2: Tax wedge for single and second 
earners as a % of total labour costs, 2025 

Note: The second earner tax wedge shows a household’s tax 
wedge resulting from the wage that a second earner taking 
up a job at 67% of the average wage receives. It does not 
show the total tax wedge of the household. The household is 
assumed to have a first earner at 100% of the average wage 
and no children. For the methodology of the tax wedge for 
second earners, see OECD (2024), Taxing Wages 2024. 
Source: European Commission 

As a result, taxpayers will move into a higher 
tax  bracket  sooner.  The  tax  rate  in  the  first 
bracket of the personal income tax (which includes 
national insurance contributions and applies up to 
an  income  of  EUR 38 883  per  year)  will  be 
reduced  to  35.75%  in  2026  (from  35.82%  in 
2025).  The  rate  in  the  second  bracket  (for  an 
income between EUR 38 883 and EUR 78 426) will 
be  increased  slightly  to  37.56%  (from  37.48%  in 
2025).  The  top  rate  will  remain  unchanged  at 
49.5%.  The  threshold  above  which  the  top  rate 
applies will be increased by an additional EUR 432 
(in addition to the inflation adjustment) increasing 
from EUR 76 817 to EUR 78 426. 

The  2026  tax  plan  contains  measures 
affecting  VAT.  The  planned  increase  of  the 
reduced VAT rate on culture, media, and sports has 

38 

been  reversed,  keeping  it  at  9%.  However,  the 
reduced  VAT  rate  for  short-stay  accommodation 
(e.g. hotels) will increase to the standard 21%. 

have 

of  GDP 

decreased 
The  Netherlands 

In 2024 environmental taxes represented 3% 
of  GDP  compared  with  2.1%  of  GDP  for  the 
EU.  Since  2019,  environmental  taxes  as  a 
by 
percentage 
has 
0.6 percentage points. 
introduced  measures  to  reform  energy,  air  travel 
and  car  taxation.  The  aim  of  these  reforms  is  to 
promote  and  accelerate  the  green  transition.  For 
example, the 2026 tax plan adjusts air passenger 
tax  such  that  the  Dutch  air  passenger  tax  is  now 
(one  of)  the  highest  in  the  EU.  As  from  2027, 
different rates will be applied based on the flight's 
distance and environmental impact: EUR 29.40 (for 
0–2 000 km),  EUR 47.24  (2 000–5 500 km),  and 
EUR 70.86  (over  5 500 km  or  undetermined  final 
destination).  Furthermore,  as  from  2030,  a 
separate  rate  will  be  introduced  for  small  private 
aircraft. The tax per passenger will be EUR 420 (0–
2 000 km),  EUR 1 015 
(2 000–5 500 km),  or 
EUR 2 100  (over  5 500 km  or  undetermined  final 
destination). 

through 

environment 

The Dutch corporate tax system applies rates 
above  the  EU  average  but  supports  the 
lower 
business 
complexity. The top statutory tax rate in 2026 is 
25.8% (equal to that of 2025). At the same time, 
the  effective  average  tax  rate  has  increased 
0.7 percentage  points  since  2023  and  stood  at 
23.5% in 2024, above the EU average in 2024 of 
19.1% (which stood at 18.9% in 2023). The lower 
complexity  of  the  tax  system  compared  with  the 
EU  average  further  supports  a  strong  business 
environment. 

to 

aims 

research 

encourage 

Support for R&D expenditure is above the EU 
average,  but  there  seems  to  be  scope  to 
make  the  relevant  schemes  more  accessible 
for  SMEs.  One  example  of  an  important  public 
support  scheme  is  the  innovation  box  scheme, 
which 
and 
development  within  the  Netherlands.  This  scheme 
has  a  reduced  corporate  income  tax  rate  of  9% 
(instead  of  the  standard  rates,  which  can  be  as 
high  as  25.8%)  on  profits  generated  from  self-
developed and innovative assets. Another example 
is  a  subsidy  that  effectively  lowers  the  wage  tax 
liability for companies that conduct R&D activities 
(on the basis of the ‘WBSO’ R&D stimulation law). 
As  a  result  of  the  WBSO,  the  companies  involved 
pay  a  lower  amount  of  the  gross  salary  of  its 

26.230.738.646.925.82025303540455050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - NLSingle earner - EU averageSecond earner -  NLSecond earner -  EU average 
   
nudging  system  to  discourage  non-compliant 
behaviour. ICT costs accounted for 22.4% of total 
operating expenditure in 2023, among the highest 
in  the  EU.  This  highlights  the  focus  placed  on 
digitalisation in the Dutch tax administration. 

taxes  on 

interest  and 

Since  2021,  the  Netherlands  has  completed 
multiple  reforms  under  its  recovery  and 
resilience plan to curb the risk of aggressive 
tax  planning  (ATP).  Specifically,  it  introduced 
withholding 
royalty 
payments  to  listed  zero-  and  low-tax  jurisdictions 
in 2021 and on dividend payments in 2024. These 
reforms  were  undertaken  to  address  the  ATP-
related 
in  the  country-specific 
recommendations  made  to  the  Netherlands  in 
2019  and  2020.  The  Netherlands  has  also  made 
several amendments to the Corporate Income Tax 
Act (e.g. to limit loss relief for corporations). 

issues  raised 

Graph A3.3:  Indicators for financial activity risk as 
% of GDP 

Stock of FDI 

Dividends 

Interest 

Royalties 

Inward 

Outward 

Received 

Paid 

Received 

Paid 

Received 

Paid 

2023 
381.80% 
397.60% 
22.20% 
14.90% 
4.20% 
3.10% 
3.30% 
2.70% 

2024 
314% 
387% 
19% 
14% 
4% 
2% 
4% 
4% 

Source: European Commission 

Since  enacting  the  reforms,  the  Netherlands 
has  moved  closer  to  the  EU  average  on 
several  relevant  economic  indicators.  Despite 
this  positive  trend,  there  is  room  for  further 
improvement.  Financial  flows  of  foreign  direct 
investments,  dividend, 
royalty 
payments  in  the  Netherlands  remain  significantly 
disproportionate  and  above  the  EU  average. 
Specifically, in 2024 the inward and outward flow 
of FDI as a percentage of GDP ranked fourth in the 
EU,  at  314%  and  387%  of  GDP  respectively. 
reforms  were 
However,  since 
implemented to curb the ATP risk, these economic 
indicators have moved closer to the EU average. 

interest  and 

relevant 

the 

that 

the  use  of 

employees to the tax administration. Even though 
these  public  schemes  seem  to  foster  R&D,  it 
seems 
is 
concentrated  mainly  to  a  relatively  small  number 
of  bigger  companies.  The  2026-2030  coalition 
agreement states that the WBSO will be made less 
complex  and  the  administrative  burden  will  be 
reduced. See Annex 4 for further details. 

these  schemes 

The  Netherlands  performs  strongly  in  terms 
of tax compliance. In 2024, the VAT compliance 
gap (49)  was  estimated  at  7.3%  of  the  VAT  total 
tax liability (50). This is slightly higher than the level 
of  2023  (7.0%),  which  itself  was  lower  than  the 
level of 2022 (9.6%) and 2019 (11.2%) (51). Hence, 
the  slight increase  in the VAT  compliance gap  for 
2024  compared  to  the  level  of  2023  does  not 
cause direct concern given the declining long-term 
trend in this respect. 

The 

foregone 

the  Netherlands, 

considerable 
to 
due 
has 
Netherlands 

tax 
In 
tax 
revenues  are 
expenditures. 
a 
comprehensive  reporting  on  tax  expenditure.  In 
2025, the 125 actively monitored tax expenditures 
were  budgeted  to  result  in  foregone  revenue  of 
EUR 167 billion 
total 
government  tax  revenues),  representing  15.6%  of 
GDP.  Overall,  the  biggest  tax  expenditures  in  the 
Netherlands are (i) pension tax relief schemes, and 
(ii)  home  ownership 
incentives  (such  as  the 
mortgage interest tax relief scheme). 

(i.e.  about  42%  of 

The  tax  administration  has  also  worked  to 
improve  voluntary  compliance  and  prevent 
accidental  mistakes  by  taxpayers,  namely 
through  the  provision  of  prefilled  tax  returns, 
direct  payment  links  in  correspondence  and  the 
possibility  to  pay  online  using  a  payment  app.  E-
filing  rates  are  well  above  the  EU  average  for 
corporate income tax (100%), personal income tax 
(98.9%)  and  VAT  (100%),  further  indicating  a 
lower compliance burden for taxpayers. The Dutch 
tax  administration  uses  artificial  intelligence  to 
identify  non-compliance  and  detect  unregistered 
taxpayers  by  web  scraping  and  also  uses  a 

(49)  The VAT compliance gap is an estimate of revenues lost due 
to  VAT  fraud,  evasion  and  avoidance,  bankruptcies  and 
financial insolvencies, or miscalculations.  

(50)  The VAT total tax liability is the theoretical tax revenue that 
would  be  collected  in  a  situation  of  perfect  taxpayer 
compliance, assuming an unchanged net VAT base.  

(51)  See the ‘VAT GAP in Europe’ report.  

39 

 
 
  
  
 
  
PRODUCTIVITY 
ANNEX 4: INNOVATION TO BUSINESS  

is  an 

innovation 

The  position  of  the  Netherlands  among 
innovator  leaders  in  the  EU  is  at  risk.  The 
Netherlands 
leader,  with  a 
the  average  of 
performance  slightly  below 
innovation  leaders  in  the  EU  (129.1%  vs  131.9% 
of  the  EU  average  in  2025)  (52).  However,  Dutch 
R&D intensity, at 2.29% of GDP in 2024, is below 
the  strongest  R&I  performing  countries  in  the  EU 
and globally. The very solid Dutch science base is 
under  strain  due  a  to  a  low  and  declining  public 
R&D  intensity.  While  the  innovation  ecosystem 
benefits  from  strong  science-business  linkages 
and start up dynamism, technological performance 
is  under  pressure.  Moreover,  challenges  remain  in 
securing  adequate  public  resources  to  support 
Dutch  R&I  ambitions,  as  no  long-term,  structural 
and sustainable public funding plan for R&I exists. 
Concerning  digitalisation,  while  Dutch  businesses 
are  among  the  most  digitalised  in  the  EU,  SMEs 
lag  behind  large  firms in  adopting  cloud,  artificial 
intelligence  (AI)  and  data  analytics,  and  many 
companies still lack the expertise and resources to 
fully  exploit  these  technologies.  In  addition,  AI-
related  initiatives  and  support  measures  in  the 
Netherlands  remain  fragmented  across  regions, 
limiting  their  overall  impact  and  scalability.  The 
recommendation 
2025 
highlighted  the  need  to  increase  the  intensity  of 
public and private R&I by supporting key strategic 
technologies. 

country-specific 

Excellent science  

research  output,  but 

The  Netherlands  has  a  very  solid  and 
internationalised  science  base  producing 
its 
high-quality 
performance  is  under  strain.  The  quality  of 
research  outputs,  as  measured  by  the  proportion 
of scientific publications within the top 10% most-
cited  publications,  remains  well  above  the  EU 
average  (14.2%  vs  9.4%),  but  with  a  decreasing 
trend over the last decade (it was 15.3% in 2015). 

(52)  2025 European Innovation Scoreboard, country profile: The 

Netherlands. The scoreboard provides a comparative analysis 
of innovation performance in EU countries, including the 
relative strengths and weaknesses of their national 
innovation systems, and for the regions in the Regional 
Innovation Scoreboard 2025.  

The  investment  in  public  R&D  in  2024  stood  at 
0.67%  of  GDP,  a  decrease  from  the  0.71% 
achieved  in  2023  and  below  the  EU  average  of 
0.72% (see table A4.1). The Netherlands’ 3% R&D 
action plan, announced in July 2025 which aims to 
raise  investment  in  R&D  to  3%  of  GDP  by  2030 
(53)  sets  an  overall  goal  of  1%  of  public  funding. 
Although  the  critical  role  of  government  and 
knowledge  institutions  in  R&D  is  acknowledged, 
actual  allocation  of  resources  remains  uncertain. 
In  the  absence  of  decisive  actions  to  implement 
the  2025  recommendation  on  enhancing  public 
R&D  intensity,  Dutch  scientific  performance  may 
continue  to  erode,  undermining  future  innovation 
and competitiveness.  

 Business innovation  

intensity 

business  R&D 

The  Dutch  innovation  ecosystem  benefits 
from  very  good  science-business  linkages, 
remains 
but 
significantly  below  the  other 
Innovation 
leaders.  Business R&D intensity (1.61% in 2024) 
is higher than the EU average (1.49%) and slightly 
on  the  rise,  but  still  significantly  below  the  other 
innovation leaders. Expenditure on R&D performed 
by  SMEs  as  a  percentage  of  GDP  (0.52  in  2023) 
has been stagnant in the last decade. The private 
sector absorbs researchers at a rate well over the 
EU  average  (with    8.8  researchers  employed  by 
businesses per thousand population in 2024 vs an 
EU average of 5.90) and business-science linkages 
are  strong,  as  shown  by  a  percentage  of  public-
private  scientific  co-publications  among  the  total 
number of publications which is well above the EU 
average (11.4 % vs 7.6%).  

line  with  the  2025  country-specific 
In 
initiatives 
recommendations,  new  policy 
announced  in  the  3%  action  plan  have  the 
potential  to  promote  private  R&D  intensity. 
In  2025,  the  Dutch  roadmap  to  achieve  R&D 
ambitions  was  laid  down.  It  is  aligned  with  the 
Draghi  Report  (54)  and,  if  put  into  action  and 
backed  with  adequate  resources,  it  could  be 

(53)  Letter from the Ministry of Economic Affairs to Parliament on 

3%-RD action plan. 

(54)  Dutch competitiveness in the light of the Draghi Report.  

40 

 
 
 
 
 
 
 
  
 
investment.  The  strategy 

instrumental  in  addressing  the  2025  country-
specific  recommendation  on  the  enhancement  of 
private  R&I  intensity.  The  Netherlands’  3%  R&D 
action plan (55) aims to achieve a 2% contribution 
from  business 
to 
promote  private  R&D  focuses  on:  increasing  R&D 
investment  by  existing  enterprises,  particularly 
SMEs;  facilitating the  creation  and  scaling  of  new 
R&D-intensive  businesses;  and 
improving  the 
environment for innovative companies–both those 
already  investing  in  the  Netherlands  and  those 
considering setting up operations from abroad (56). 
Two actions envisaged in the 3% action plan have 
strong  potential  for  business 
innovation:  the 
creation  of  experimental  spaces  for  technology 
development (sandboxes), and the launching of an 
for  Disruptive 
ARPA-like  National  Agency 
Innovation  (NADI).    The  proposal  of  NADI  (57)  as 
concept is under discussion and no decisions have 
been  taken  yet  besides  a  preliminary  design.  The 
action plan has been accompanied by the release 
(58)  which  outlines 
of 
proposals on how to unlock private R&D, especially 
in  critical 
increasing  public 
support  to  de-risk  investments  and  back  early-
stage 
specific 
instruments to address these issues remain to be 
designed.  

the  Wennink  Report 

technologies,  by 

innovation. 

However, 

the 

(55)  Letter to Parliament on 3%-RD action plan | Parliamentary 

Paper | Rijksoverheid.nl : 3% R&D Action Plan | STIP 
Compass. 

(56)  Letter  to  Parliament  on  3%-RD  action  plan  |  Parliamentary 

Paper | Rijksoverheid.nl. 

(57)  NADI - Nationaal Agentschap voor Disruptieve Innovatie. 

NADI agency would be intended to help translate research 
into transformative technologies. See also the Letter to the 
House of Representatives from the Ministry of Economic 
Affairs and Climate Policy on Bevindingen verkenning naar 
een Nationaal Agentschap voor  Disruptieve Innovatie (NADI).  

(58)  The Wennink Report (2025) was commissioned by the Dutch 

government to inform an independent advice and to 
translate the Draghi diagnosis to the singularities of the 
Dutch economy. 

41 

Graph A4.1: R&D intensity (gross domestic 
expenditure on R&D (GERD) as PC of GDP) 
compared to leader and strong innovators 

Source: Eurostat 

The technological position of the Netherlands 
is  under  pressure.  The  number  of  applications 
filed  under  PCT  per  billion  GDP  (in  PPS  EUR)  has 
been  declining  for  a  decade:    although  it  is  still 
above  the  EU  average  (3.7  vs  2.8  in  2022),  it  is 
now far from the rate of 5.31 achieved ten years 
ago.  Furthermore,  a  recent  study  (59)  highlighted 
the  decline  over  the  last  decade  in  the  global 
position  and  global  share  of  patents’  value 
specifically in the ten key technologies outlined in 
2024’s  national  tech  strategy  (NTS)  (60).  The 
(61) 
Recovery  and  Resiliency  Facility 
supported investment in  critical  technologies  such 
as  quantum  technology,  AI  or  green  technologies 
in  recent  years.  However,  further  allocation  of 
funds  beyond  the  RRF  will  be  critical,  given  that 
the estimated NTS budget of EUR 1 billion remains 
provisional,  leaving  implementation  dependent  on 
existing funds. 

(RRF) 

line  with  the  2025  country-specific 
In 
recommendation on  supporting  key  strategic 

(59)  Een blik onder de motorkap Amber Geurts, Daan Pisa, Maike 
Conijn, Mirella Schrijvers, Sjoerd Hardeman, Sabine Kerssens 
& Hugo Gelever, 2025. Een blik onder de motorkap: sleutelen 
aan de technologiepositie van Nederland, TNO VECTOR: 
Centre for Societal Innovation and Strategy.  

(60)  The  NTS 

concentrates  policy  efforts  on  quantum 
technologies,  green  chemical  production,  biotechnology, 
imaging  and  opto-mechatronics,  artificial  intelligence  and 
data  science,  energy  materials,  semiconductor  technologies 
and cybersecurity.  

(61)  Quantum technology (Quantum Delta NL programme, 

EUR 264 million RRF fund), AI Ned and applied AI learning 
communities programme, EUR 60 million RRF fund) or green 
energy (Green power of hydrogen, EUR 68.5 million RRF fund) 
and to the scale-up of technologies for the use of hydrogen 
as an energy carrier in aircrafts (Aviation in transition 
EUR 28.7 million RRF fund). 

00.511.522.533.5420152020202220232024EU avgUS avgNetherlandsDenmarkGermanyAustriaBelgium 
 
  
 
investments 

technologies,  new  key  policy  roadmaps 
combine  enabling  technologies  with  growth 
markets,  driven  by  R&D 
in 
technological  innovation.  The  revised  2025 
industrial  policy  targets  six  strategic  domains: 
semiconductors, high-tech machinery, defence and 
space  technologies,  biotechnology,  digital  and  AI 
services and innovative chemistry, aiming to boost 
R&D  investments  to  3%  of  GDP.  Similarly,  the 
defence  strategy  for  industry  and  innovation 
to  accelerate  defence 
2025-2029 
collaboration 
enhanced 
innovation 
research 
industry  and 
between  government, 
institutions. It has secured over EUR 1.15 billion to 
expand 
strategically 
advancing  high-tech 
industrial  and  security 
capabilities (62).   

strives 
through 

the  defence 

industry, 

implementation  will  be  key 

Adequate budget planning and allocation and 
timely 
to 
unlocking  Dutch  R&I  enhancement.  Despite 
renewed  policy  frameworks, 
the  overarching 
challenge 
remains  securing  adequate  public 
resources  to  support  R&I  ambitions.  Budget  cuts 
are still a matter of concern. For example, funding 
rounds  of  the  national  growth  fund  have  been 
phased  out  since  2024  without  an  alternative 
programme  (63),  and  there  is  still  no  long-term, 
sustainable, and structural public funding plan for 
R&I. 

Direct public support for business R&D tends 
to be concentrated on larger firms. The Dutch 
government  mainly  supports  business  innovation 
through  broad  tax  incentives  such  as  the  WBSO 
and the Innovation Box, complemented by several 
smaller  funding  schemes.  While  instruments  such 
as  the  WBSO  have  a  positive  impact  on  private 
R&D  spending  (64),  the  current  toolbox  has  not 
structural 
proven 
productivity  growth.  Moreover,  complex  and 
fragmented  administrative  requirements  make 
these funds difficult to access, especially for SMEs. 
As a result, large firms receive a relatively higher 

enhancing 

effective 

in 

(62)  Dutch government launches new strategy for innovation and 
| 

the  defence 

|  News 

industry 

item 

upscaling  of 
Rijksoverheid.nl. 

(63)  Rijksoverheid.nl Monitoring en effectmeting | Nationaal 
Groeifonds Adviescommissie Nationaal Groeifonds - 
Jaarverslag 2024. 

proportion  of  direct  R&D  funding  (65).  Better 
coordination between agencies is required to lower 
administrative burden and help SMEs benefit more 
from public funding. 

of 

uptake 

advanced 

While  Dutch  SMEs  are  steadily  improving 
their  levels  of  digitalisation  and  increasing 
their 
digital 
technologies,  a  significant  gap  remains 
between  smaller  and  larger  companies.    In 
2025,  88.76%  of  Dutch  SMEs  reached  at  least  a 
basic  level  of  digital  intensity,  well  above  the  EU 
(71.39%).  However,  significant  gaps 
average 
persist  between  SMEs  and  large  enterprises,  as 
many SMEs still lack the resources and capabilities 
to fully integrate these technologies into their core 
business  practices  (66).  Cloud  adoption  reached 
68.54%  of  enterprises  in  2025,  driven  mainly  by 
large  firms  (89.65%),  while  uptake  among  SMEs 
remained  lower  (67.75%).  A  similar  pattern  is 
observed  for  data  analytics:  although  overall 
adoption exceeded the EU average (55.96% versus 
39.85%),  large  enterprises  are  far  more  likely  to 
use  these  technologies  than  SMEs  (88.60%  of 
large companies vs 54.70% of SMEs).  

AI adoption has accelerated markedly. AI has 
been adopted by 33.21% of Dutch enterprises, up 
in  2024.  Nevertheless,  uptake 
from  23.06% 
remains  uneven,  with  only  around  one  in  three 
SMEs using AI (31.87%), compared with more than 
half  (67.64%)  of  large  enterprises.  Moreover, 
relatively  few  companies  have  integrated  AI  into 
their  core  business  models,  with  the  technology 
being  mostly  used  for  text  mining  and  natural 
language  generation  (67).  This  reflects  differing 
levels  of  digital  maturity,  with  SMEs  being 
generally  more  hesitant  to  invest  in  higher-risk 
technologies  due  to  knowledge  gaps,  funding 
limited 
constraints,  regulatory  complexity  and 
access to data and computing power.  

The  Netherlands  aims  to  reinforce  support 
for  companies’  AI  uptake.  This  will  be  carried 
the  existing  European  Digital 
out 
through 
Innovation  Hubs 
(EDIHs)  network,  for  which 
additional  EU funding was recently  announced, as 

(65)  OECD Economic Surveys: Netherlands 2025 | OECD; Top 50 

meest R&D intensieve bedrijven van Nederland. 

(66)  2025 State of the Digital Decade package | Shaping 

Europe’s digital future. 

(64)  Evaluation of the Research and Development (Promotion) Act 

(67)  2025 State of the Digital Decade. The Netherlands country 

(WBSO) 2018 - 2022 | Report | Rijksoverheid.nl. 

Report 2025.  

42 

 
 
 
infrastructure. 

well as through the AiNed Innovation Labs, where 
a  second  round  of  proposals  has  opened.  In 
addition,  the  recent  approval  of  an  AI  factory  in 
important  step  towards 
Groningen  marks  an 
strengthening  national  access 
to  advanced 
these 
computing 
developments  have  the  potential  to  support  the 
country’s  build-up  of  AI 
capabilities  and 
infrastructure,  initiatives  remain  fragmented,  with 
fewer chances to scale  up. At the end of 2025, a 
group  of  experts  called  for  a  large-scale  national 
‘AI  delta  plan’,  advocating  increased  investment, 
stronger  infrastructure,  simplified  rules  and  the 
establishment of new research institutes.  

While 

Entrepreneurial dynamism 

The  Netherlands  benefits  from  a  dynamic 
startup  ecosystem.  The  country  posts  a 
relatively  strong  level  of  emerging  startups  and 
high-growth firms compared to many OECD peers. 
This  is  thanks  to  an  entrepreneurial  ecosystem 
which  ranks  among  the  stronger  OECD  countries, 
with  favourable  enabling  conditions  leading  to 
solid  performance  on  outputs  related  to  business 
formation,  innovation-oriented  entrepreneurship, 
solid startup activity and inclusive dynamics.  

According  to  the OECD  Entrepreneurial  Ecosystem 
Diagnostics (2025) (68), the Netherlands has fairly 
effective  institutional  frameworks,  market  access 
and  business  ecosystem  connectivity,  which 
support  new  business  formations  and  early 
growth.  

processes. 

However,  startups  still  face  key  regulatory 
and  administrative  barriers.  These 
include 
uncompetitive  employee  stock  option  schemes, 
rigid labour market rules and slow permitting and 
compliance 
energy 
shortages, as well as limited and uneven access to 
sandboxes and testbeds, further hinder scaling-up, 
increasing the risk that startups will relocate (69). A 
more  favourable  tax  system  for  employee  stock 
options  is  being  prepared:  the  Employee  Stock 
Ownership  Plan (ESOP)  would  allow  employees to 
benefit  from  the  company’s  success  and  thereby 

Space 

and 

help  to  attract  and  retain  talent  in  startups  and 
scale-ups  in  particular  (70).  Beyond  the  ongoing 
ESOP  reform,  there  is  no specific  national  startup 
regulation in place, which leaves gaps in targeted 
support for high-growth companies.  

Shortages  of  highly  skilled  workers  risk 
affecting  Dutch  innovation  performance  and 
competitiveness.  The  Netherlands  outperforms 
the EU average on the proportion of young people 
with tertiary education as well as on engagement 
in lifelong learning. However, despite an increasing 
trend  over  the  last  decade,  the  country  is  still 
lagging in producing new graduates in science and 
engineering  fields  (12.3  per  thousand  population 
aged  25-34  in  2023  vs  an  EU  average  of  16.8.). 
The  number  of  graduates  in  the  field  of  ICT  also 
remains  slightly  below  EU  average  (3.6  per 
thousand population aged 25-34 in 2023 vs an EU 
average  of  vs  3.8  in  2023).  The  Netherlands  is 
labour 
characterised  by  one  of  the  highest 
shortages in the EU. Despite some easing, the job 
vacancy  rate  stood  at  4.1%  in  Q2  2025.  Labour 
shortages 
remain  widespread  across  several 
sectors, including scientific and technical activities. 
Although  the  Netherlands  put  in  place  an  action 
plan for green and digital jobs (71) in 2023, recent 
policies to limit the intake of international students 
and  budget  cuts  to  international  education  could 
have a negative impact on attracting and retaining 
top talent at all levels (see Annex 13).  Increasing 
mismatches  between  skills  supply  and  demand 
might potentially impact competitiveness. 

Despite  having  access  to  a  deep  venture 
capital  market,  some  Dutch  start-ups  and 
scale-ups  face  difficulties 
in  accessing 
funding. Following  impressive  growth  over  the 
last  decade,  venture  capital  investment  level 
reached  0.11%  of  GDP  in  2024  (vs  0.03%  in 
2014), largely outperforming the EU average (see 
Annex  6).  The  Netherlands  has  become  home  to 
33  ‘unicorns’  (‘unicorns’  are  unlisted  companies 
valued  at  EUR 1 billion  or  more)  and  more  than 
6 500  funded  startups,  which  ranks  it  within  the 
top 15 global destinations for venture and growth 
capital.  However,  access  to  funding  remains 
the  seed  stage 
particularly  constrained  at 

(70)  Lower taxation on share options for start-ups and scale-ups | 

Business.gov.nl. 

(68)  Entrepreneurial Ecosystem Diagnostics | OECD. 

(71)  Letter to Parliament with Action Plan for Green and Digital 

(69)  OECD Economic Surveys: Netherlands 2025 | OECD; See also 
Top 50 meest R&D intensieve bedrijven van Nederland. 

Jobs.    

43 

 
 
 
 
school 

references 

curriculum, 

(74).  For  example, 
the  world’ 

the 
to 
entrepreneurial  skills  appear  across  different 
the  area 
learning  areas 
’Orientation 
learning 
in 
outcomes  related  to  financial  and  economic 
literacy  and  planning  and  management.  There  is, 
however,  a  lack  of  systematic  national  data  on 
entrepreneurship 
education  and  monitoring, 
evaluation  and  evidence  on  student  engagement, 
attitudes, skills and behaviours remain limited (75).  

includes 

in  early-stage 

compared to other leading ecosystems. Indeed, the 
fact  that  the  Netherlands  remains  at  the  EU 
average in seed-stage funding intensity (at 0.01% 
of  GDP  in  2024)  signals  the  persistence  of  a 
structural  bottleneck 
capital 
formation,  despite  programmes  such  as  the  seed 
capital  scheme.  Companies  requiring  more  than 
EUR 50  million  before  commercialisation  also  still 
face major funding gaps. This is especially true for 
deep  tech  (72),  where  high  R&D  costs  and  long, 
uncertain  timelines  discourage  private  investors, 
making government-backed venture capital key to 
foster  innovation  and  retain  companies  in  the 
country.  Moreover,  the  startup  ecosystem  would 
benefit  from  more  guarantee's  mechanisms  that 
de-risk  investments  and  better  mobilise  private 
capital. 

to 

integrate 

Invest-NL  and 

Initiatives  taken  to  strengthen  the  Dutch 
public financing system may help to address 
these  gaps.  The  strengthening  of  Invest-NL  with 
EUR 900 million for 2025-2027 was a first step in 
addressing these gaps, with about EUR 250 million 
allocated  to  a  blended  finance  instrument  to 
mobilise  private  capital  and  stimulate  high-risk 
investment  (73).  Furthermore,  the  decision  in  July 
2025 
Invest 
International  was  aimed  at  strengthening  the 
Dutch public financing ecosystem. Complementing 
this initiative, the 2025 3% action plan envisages 
the  mobilisation  of  institutional  capital  and,  more 
importantly, the creation of a national investment 
institution.  In  line  with the  2025  recommendation 
to address the funding gap for late-stage startups 
and  scale-ups  by  leveraging  available  financing 
tools,    these    policy  developments  have  the 
potential  to  help 
improve  efficiency,  reduce 
fragmentation  and  expand  the  range  of  financial 
instruments  available  to  innovative  enterprises, 
particularly  in  sectors  where  market  financing  is 
still  insufficient,  such  as  deep  tech  and  R&D-
intensive companies.  

in 

education 

is  often  advanced 

higher 
Entrepreneurship 
education  is  well  developed.  At  universities, 
entrepreneurship 
through 
centres  for  entrepreneurship,  which  promote 
entrepreneurial education and help connect higher 
institutions  with  enterprises  and 
education 
innovation 
though 
entrepreneurship education is not explicitly part of 

stakeholders. 

Even 

(72)  State of Dutch Tech Report 2025 - Techleap. 

(73)  OECD Economic Surveys: Netherlands 2025 | OECD. 

44 

(74)  European Commission / EACEA / Eurydice, 2025, 

Entrepreneurship education at school in Europe – 2025. 
Eurydice Report. 

(75)  Baggen, Y., Kuipers, R. & Veldman, J. (2021). Inzicht in 

ondernemerschapsonderwijs. Utrecht/Wageningen: Dialogic & 
Wageningen University. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A4.1:  Key innovation indicators 

(1)  EU average for the last available year or the year with the highest number of country data. * break in 
series.  
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database), Invest Europe, European Innovation 
Scoreboard 

45 

R&D intensity (gross domestic expenditure on R&D as % of GDP)1.692.122.272.18*2.32.29:2.243.44Public expenditure on R&D as % of GDP0.880.760.760.68*0.710.67:0.720.64Scientific publications of the country within the top 10% most-cited publications worldwide as % of total publications of the country 16.0715.1214.5714.28:::9.4412.31Researchers (FTEs) employed by public sector (Gov+HEI) per thousand active population3.13.13.43.4*3.53.5:4.3:International co-publications as % of total number of publications50.458.5364.265.7165.966.55:57.24:Business enterprise expenditure on R&D (BERD) as % of GDP0.811.361.511.49*1.591.61:1.492.69Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP0.260.490.490.48*0.52::0.470.30Researchers employed by business per thousand active population3.06.27.68.3*8.68.8:5.9:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)3.825.314.233.75:::2.812.20Employment share of high-growth enterprises measured in employment (%):::0.951::0.87:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::82.72:88.7671.39:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%)::::50.77:55.9639.85:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%)::::60.3968.5465.8146.69:Artificial intelligence adoption % enterprises (EU Digital Decade target by 2030: 75%)::::14.1023.0633.2119.95:Public-private scientific co-publications as % of total number of publications10.4310.9711.5911.7711.9511.46:7.62:Public expenditure on R&D financed by business enterprises (national) as % of GDP:0.060.060.05*0.06::0.060.02Total public sector support for BERD as % of GDP:0.240.270.25*0.26::0.21:R&D tax incentives: foregone revenues as % of GDP0.130.130.150.130.13::0.10:BERD financed by the public sector (national and abroad) as % of GDP :0.110.120.12*0.13::0.11:Venture capital (market statistics) as % of GDP (calculated as a 3-year moving average)0.030.030.070.110.120.11:0.06:Seed stage funding share (% of GDP)0000.010.010.01:0.01:Start-up stage funding share (% of GDP)0.020.020.050.10.10.1:0.03:Later stage funding share (as % of GDP)0.010.010.020.050.050.04:0.03:New graduates in science & engineering per thousand population aged 25-34::11.2411.9612.33::16.8:Graduates in the field of computing per thousand population aged 25-34::2.493.383.63::3.8:Science and innovative ecosystemsNETHERLANDS2010201520202022202320242025EU average (1)USHeadline indicatorInnovative talentR&D investment & researchers employed in businessesInnovation outputsDigitalisation of businessesAcademia-business collaboration Public support for business innovationFinancing innovation 
 
 
 
  
 
ANNEX 5: SINGLE MARKET AND INDUSTRY 

The  Netherlands  has  a  highly  productive 
economy  but  faces several constraints  to 
continued 
Business 
competitiveness. 
investment  registers  one  of  the  lowest  levels  in 
the  EU.  Business  dynamism  has  slowed  down, 
mainly  because  of  a  fall  in  the  entry  rate.  The 
insolvency  framework  in  the  Netherlands  is  more 
rigid than in most EU countries. The Dutch industry 
share  is  low  in  EU  comparison.  Production  in 
energy-intensive 
dropped 
industries 
significantly. 

has 

to 

implemented 

reforms  and 

The  2025  country-specific  recommendations 
(CSRs)  feature  several  measures  focused  on 
removing  barriers 
investment  and 
improving  resource  allocation.  To  remove 
barriers  to  construction  (CSR  1),  the  government, 
with Recovery and Resilience Facility (RRF) support, 
has 
investments, 
including  for  easing  permitting  and  building 
infrastructure.  A  Technical  Support 
connecting 
Instrument  (TSI)  project  supports  industrialisation 
of  construction.  A  comprehensive  simplification 
programme  aims  to  reduce  regulatory  burden  by 
20% by end 2026. It takes time for the measures 
to  bear  fruit.  To  encourage  mobility  to  high-
productivity sectors (CSR 5), a new industrial policy 
is  under  implementation,  focused  on  six  growth 
markets.  The  authorities  have  taken  steps  to 
increase offshore gas production. 

Business dynamics 

Investment  remains  low  in  the  Netherlands, 
mainly  driven  down  by  business  investment. 
Total investment stood at 19.9% of GDP in 2024. 
This  is  below  the  EU  average  of  21.7%,  close  to 
Germany  (20.5%)  but  far  from  other  peers 
(Belgium  –  24.3%,  Sweden  -  25.1%).  Business 
investment’s low level (10.2%, only four countries 
have  lower  levels)  is  the  key  component  driving 
down the total,  as government investment (3.3%) 
is  closer  to  the  EU  average 
(3.7%),  while 
households’ share (6.4%) is the third highest in the 
EU. Since 2010, the Netherlands’ total investment 
(as a share of GDP) has been below that of the EU 
and  euro  area  except  for  2015  and  2022.  Dutch 
businesses  and  pension  funds  invest  significant 
amounts abroad. 

The  2025  CSRs  feature  several  measures 
focused on  removing  barriers to  investment, 

46 

i) 

for 

two 

thirds  of 

infrastructure). 

removing  obstacles 

improving  resource  allocation  and  thereby 
boosting productivity growth. The relevant key 
areas  are: 
the 
construction  of  new  dwellings  (CSR  1).  The 
government  has  set  itself  a  national  target  of 
100 000  new  homes  per  year,  with  national  sub-
targets.  With  RRF  support,  the  government  has 
already  implemented  reforms  and  investments  to 
incentivise  construction  (signature  of  agreements 
with  local  government  to  build  900 000  new 
dwellings, 
them  affordable; 
publication  and  substantial  implementation  of  an 
action plan to tackle barriers; a subsidy scheme for 
construction-relevant 
The 
Netherlands  has  also  taken  important  steps  to 
digitalise building permits and is one of the front-
runner  states  in  this  regard  in  the  EU(76).  A  TSI 
project  on 
facilitate 
removing  barriers 
industrialisation  of  construction  is  under  way. 
Several  measures,  supported  by  national  and  RRF 
investments  and  reforms,  are  deployed  to  tackle 
the  nitrogen  issue  which  slows  down  construction 
(see  Annex  10).  In  terms  of  impact,  it  takes  time 
for  the  measures  to  bear  fruit,  especially  as 
regards  shortening  permitting  time  or  building 
connecting infrastructure; ii) encouraging mobility 
(CSR  5).  The 
to  high-productivity  sectors 
industrial 
government  has  announced  a  new 
policy, targeting a higher share for manufacturing 
(15%  of  GDP;  current  manufacturing  share  is 
10%) and with a focus on six growth markets (77). 
It  seeks  to  replicate  the  coordinated  plan  applied 
to  keep  the  semiconductor  company  ASML  in 
Eindhoven (‘Operation Beethoven’). The authorities 
signed  agreements  to 
increase  offshore  gas 
production  and  developed  plans  for  more  nuclear 
capacities,  which  may  boost  productivity  directly 
and indirectly (78). 

to 

Other  factors  may  contribute  to  boosting 
new 
investment. 

construction, 

For 

a 

(76)  European  Commission,  Development  of  a  business  case  on 
the  concept  and  potential  impact  of  implementing  Digital 
Building  Permits  (DBP)  within  the  EU  construction  sector, 
December 2025. 

(77)  ‘Who Does Not Choose, Loses’, openrijk.nl, 17 October 2025. 

the 

(78)  Reallocating  resources  to  high-productivity  sectors  is  not  an 
easy or automatic operation as the relevant productivity lies 
in 
future.  Therefore,  keeping  a  strong  private 
entrepreneurial  element  is  key  to  success,  while  the  public 
sector  can  usefully  contribute  by  ensuring  high-quality 
framework conditions, relevant investments (where the state 
is the key producer for parts of education, infrastructure, etc.) 
and keeping its industrial policy/entrepreneurial bets limited. 

 
 
 
 
 
has 

broadly 

accepted 

regulation 

companies, 

construction 

government-commissioned  study  on  barriers  has 
been produced. It focuses on all the stages of the 
construction process and highlights the significant 
(79).  The 
cumulative  effects  of 
government 
the 
recommendations  and  is  preparing  to  implement 
them.  The  regulatory  burden,  which 
is  also 
affecting 
is  being 
addressed (see the paragraph below on regulatory 
burden).  For  resource-mobility  but  also  for 
construction,  one  of  the  critical  factors  is  land, 
which  is  very  scarce  in  the  Netherlands.  Industry 
land  while 
and  business  take  2.6%  of  the 
agriculture  takes  66%  (15-19  percentage  points 
more  than  neighbouring  countries).  There  is  no 
clear  policy  framework  to  facilitate  transition  in 
land  use,  which  favours  freezing  the  status  quo. 
This is all the more important now as the political 
priorities may favour bold, structural solutions for 
tackling construction barriers. 

Besides  low  investment,  energy  plays  a 
significant  part  in  the  country’s  protracted 
productivity slowdown. The Dutch economy has 
had  to  manage  a  longer  and  more  pronounced 
energy  shock.  The  gradual  phasing  out  of  the 
Groningen  gas  field  production  started  in  2014. 
Removing  the  effects  of  the  capital-intensive 
mining and quarrying and the public sector moves 
the Netherlands towards the EU average in terms 
of  productivity  for  the  period  2013-2023(80).  The 
productivity  level  in  Groningen  declined  by  23% 
over this period(81). 

Business environment 

is  good  but 
The  business  environment 
regulatory  burden  has  increased,  especially 
for  small  and  medium-sized  enterprises 
(SMEs). 
by 
EUR 731 million in the Netherlands between 2018 
and 2023(82). There are plans to tackle the burden 

Regulatory 

increased 

costs 

(79)  Minister Keijzer receives final report STOER, openrijk.nl. 

(80)  Dutch National Bank, Productivity growth remains remarkably 
stable  in  much  of  the  Dutch  business  sector,  May  2025; 
CPB/National Productivity Board, 2024 Annual Report. 

(81)  IMF, Boosting Dutch Labour Productivity, 2025, p. 7. 

(82)  According 

burden 
(Actieprogramma  Minder  Druk  Met  Regels)  sent  to  the 

regulatory 

letter 

the 

on 

to 

associated  with  500  regulations  by  mid-2026, 
which may reduce regulatory costs by 20% by end 
2026  (see  Annex  7).  Keeping  focus  on  initiatives 
needs  political  continuity,  which  has  been  a 
challenge in the last five years. 

in 

by 

be 

hindered 

Business  dynamism  has  slowed  down  and 
may 
administrative 
requirements. Business cumulative entry and exit 
rate  (business  churn)  for  2023  (15.4%)  is  below 
the EU figure (19%)(83). A national study finds that 
business  dynamism  has  decreased 
the 
Netherlands over time, mainly because of a fall in 
the  entry  rate  –  from  levels  consistently  above 
14%  during  1995-2010  to  around  10-11%  for 
2011-2024(84).  There  is  scope  for  easing  the 
registration requirements for setting up a new firm 
as  well  as  for 
licensing  and 
permitting  system  by  bringing  it  more  into  line 
with 
(keeping  an 
inventory  of  all  licences,  reviewing  it  regularly, 
adopting the ‘silence is consent’ principle, tailoring 
the length and complexity of the licensing process 
to  the  risks  inherent  in  the  licensed  activities)(85). 
The  insolvency  framework  in  the  Netherlands  is 
more  rigid  than  in  most  European  countries  and 
could  be  a  factor 
low  exit  rate  of 
in  the 
companies (86).  The  early  detection  of  financial 
distress  could  be  strengthened  by  providing 
financial 
for 
struggling firms(87). 

training  and  debt  counselling 

international  best  practice 

improving  the 

the 
performing  well 
SMEs  are 
productivity  divergence  between  the  most 
productive  firms  and  all  the  others 
is 
growing.  In  2024,  the  Dutch  SMEs  had  the  third 
highest level of value added per person employed 

but 

Parliament  by 
9 December 2024. 

the  Ministry  of  Economic  Affairs  on 

(83)  Eurostat. 

(84)  CPB,  Dynamics,  Productivity  and  Innovation  in  the  Dutch 
Economy,  November  2025,  p. 8.  Beyond  this  dynamic,  the 
country  is  performing  well  as  regards  SME-intensity:  89 
SMEs/1 000  inhabitants,  well  above  the  EU  average  of  58. 
See  p. 11  of  the  Annual  Report  on  European  SMEs  2024-
2025. 

(85)  OECD,  PMR  2024,  The  Netherlands  country  fiche,  p. 2.  The 
country ranks 30th among OECD countries for administrative 
requirements for new firms and 20th for licences and permits. 

(86)  OECD,  Enhancing 

to  Support 
Economic  Renewal,  2022,  p. 9.  For  the  low  exit  rate,  see 
Eurostat. 

Insolvency  Frameworks 

(87)  OECD Economic Surveys: Netherlands 2025, p. 121. 

47 

 
 
 
 
in  the  EU  (88).  Their  share  of  employment  (66%) 
was  slightly  above  the  EU  average  (65.1%)  but 
much  higher 
(62.7%  vs 
for  value  added 
53.6%) (89).  The  gap  between  the  productivity  of 
large  and  small  companies  is  not  large.  Value 
added per person employed is around 15% higher 
in  large  companies  (90).  Nevertheless,  there  are 
two areas of concern: the low productivity of self-
employed  professionals  without  employees;  the 
growing productivity divergence between the small 
cohort of most productive firms and both median 
firms and least productive ones (91). On top of the 
regulatory  burden  mentioned  above,  SMEs  are 
affected by some labour costs (the minimum two-
year  paid  sick  leave),  high  interest  rates  for  bank 
loans and difficult access to scale-up funding (see 
Annex 6). 

Payment  discipline 
is  deteriorating.  Late 
payments  between  businesses  increased  in  2024 
(16.8  days)  and  2025  (17.9  days)  but  are  in  line 
with  the  EU  average  (17.4  days).  Government 
performance  in  paying  businesses  has  worsened 
compared  with  2024  and  is  now  above  the  EU 
average (15.1 vs 13.6 days). 

The Netherlands is performing strongly in the 
deployment  of  digital  connectivity,  although 
some  work  could  still  be  done  to  encourage 
the  take-up  of  high-speed  services. In  2024, 
the  country’s very  high-capacity  network  (VHCN) 
coverage  reached  98.41%,  with rural  coverage  at 
88.38%. Fibre-to-the-premises 
(FTTP)  coverage 
also  showed a  strong  growth rate  of  9.9%, 
reaching  85.35%  of  households.  Less  progress 
was  made in  sparsely populated  areas,  with  FTTP 
coverage  only  growing  from  78.42%  in  2023  to 
78.79%  in  2024. As  of  September  2024,  around 
27 500 
or 
underserved areas still lacked access to fixed fast 
internet,  often  relying  on  connections  below  30 
Mbps. The policy objective is to reduce this number 
to  around  12 000  households  by  2028, mainly 
through market-driven  deployment,  with  a  small 
residual  group  expected  to  rely  on  wireless  or 
satellite solutions. Concerning 5G, the country  has 

households scattered in 

rural 

(88)  European  Commission,  Annual  Report  on  European  SMEs 
2024-2025,  p. 14.  The  figure  referrers  to  the  non-financial 
business economy. 

(89)  2025 SME Factsheet for the Netherlands. 

(90)  Calculations based on the data in the SME Factsheet. 

(91)  See the CPB study referenced in footnote 3. 

48 

already  achieved  full  coverage,  meeting  the  EU’s 
2030 target ahead of schedule. The assignment of 
the  3.5  GHz  band  in  2024  further  strengthened 
high-quality  5G coverage,  while  emerging  fixed 
wireless access services highlight the role of 5G as 
a  complement  to  fibre,  particularly  in  remote 
areas. With  regard  to  take-up, high-speed  fixed 
broadband  continued  to  increase  in  2024,  with 
85.38%  of  subscriptions  offering  speeds  of  at 
take-
least  100  Mbps.  However,  gigabit 
up remains limited (10.53%). 

of 

the 

As  technological  change  accelerates,  the 
effectiveness 
European 
Standardisation  System  depends  on  the 
ability  of  national  standardisation  bodies 
(NSBs) to mobilise a strong and diverse pool 
of  experts.  The  Netherlands  should  support  the 
Stichting  Koninklijk  Nederlands  Normalisatie 
Instituut  and  the  Stichting  Koninklijk  Nederlands 
to  ensure  continued 
Elektrotechnisch  Comité 
involvement of a critical mass of stakeholders and 
experts  in  standardisation  activities.  In  addition, 
the 
national 
a 
standardisation system, aimed at improving speed, 
efficiency,  and  inclusiveness,  requires  increased 
investment in the national standardisation system. 
For  The  Netherlands,  this  investment  is  key  to 
building  a  future-proof  standardisation  system 
and  ensuring  that  businesses  can  fully  benefit 
from the opportunities of the Single Market. 

digitalised 

toward 

shift 

Single Market and barriers 

improve 

In  2025, 

the  country’s 

The  Netherlands  is  well  integrated  into  the 
Single  Market  but  could 
its 
performance  in  implementing  Single  Market 
legislation. 
trade 
integration  with  the  single  market  for  goods  and 
services  (42.6%  of  GDP)  was  above  the  EU 
average  (40.7%).  The  Single  Market  Scoreboard 
indicates that Dutch performance is trailing the EU 
average  on  both 
transposition  deficit 
the 
(percentage  of  directives not  transposed:  1.4%  vs 
(percentage  of 
1.1%)  and  conformity  deficit 
directives  incorrectly  transposed:  1.5%  vs  1.1%) 
for  2025.  The  number  of  Single  Market 
infringement  cases  is  now  below  the  EU  average 
(22 vs 25), but the average time taken to resolve 
infringement proceedings is above the EU average 
(51.1  months  vs  44.5  months).  The  share  of 
SOLVIT  cases  resolved  (84%)  improved  compared 

 
 
with 2024 and is now in line with the EU average 
(84.6%).  

Compliance  of  products circulating  in  the 
Single Market (92) is key to ensuring a level-
playing  field  for  law-abiding  companies  and 
the  safety  of  consumers. In the  Netherlands, 
the  number  of  market  surveillance  investigations 
has  increased  compared  with  2019.  In  2025, 
national authorities reported in the EU system for 
market 
total 
of 190.9 investigations per one million inhabitants, 
which  is higher than  the  EU median  of 136.2. The 
number 
in 
absolute  terms,  which  may  also  be  the  result  of 
insufficient  IT  national  interoperability  to  the 
ICSMS  system.  The  upcoming  revision  of  the 
Market Surveillance Regulation will upgrade ICSMS 
to a fully interoperable EU digital platform.  

notifications remains limited 

surveillance 

(ICSMS) 

of 

a 

Internationalisation  contributes  significantly 
to  the  performance  of  the  Dutch  economy. 
Empirical  research  shows  that  internationalisation 
has increased productivity (by 1.8% per year) and 
profitability  for  the  firms  involved.  The  most 
productive firms in the economy are those that are 
part  of  a  multinational  company  and  those  that 
engage  in  exports  (93).  No  less  than  one  third  of 
jobs in the economy are related to exports (94). On 
the other hand, the simple position of a company 
in  a  value  chain  or  a  particular  industry  did  not 
seem automatically related to good performance. 

that 

face 

fewer 

index  shows 

restrictiveness 

Professions 
regulatory 
constraints than in most OECD countries. The 
the 
OECD 
Netherlands has the lowest  barriers for trading in 
services  of  any  EU  Member  State,  except  for 
accountants. This is partly due to accountants also 
being  responsible  for  auditing.  Setting  up  a  sole 
proprietorship is  burdensome,  as  the  procedure 
cannot  be  completed  fully  online  for cross-
border operators  but rather 
requires  physical 
the  process.  Retail 
presence 
distribution  could  benefit  from  a  reduction  in 

complete 

to 

(92)  Part  of  the  barriers  highlighted 

in  the Single  market 
strategy (‘Terrible Ten’)  and  the 2026  Annual  Single  Market 
and Competitiveness Report. 

(93)  CPB,  Productivity,  Positions,  and  Foreign  Investment:  Dutch 
Firms  in  International  Production  Chains,  May  2025,  p. 11, 
24. CPB, Dynamics, Productivity and Innovation in the Dutch 
Economy, November 2025, p. 27. 

barriers 

Territorial 

(95). 
regulatory 
supply 
constraints  affect  Dutch  retailers,  which  face 
restrictions  when  trying  to  source  products  from 
other  Member  States.  The  restrictions  limit  the 
choice  of  products  on  the  Dutch  market  and  lead 
to higher consumer prices. 

in 

of 

level 

competition 

The 
public 
procurement  procedures  is higher  than  the 
EU average. The share of single bids is below the 
EU median (23%  vs  27%). On  the  other  hand,  the 
share of direct awards is more than twice as high 
as  the  EU  median.  SMEs’  access  to  the  largest 
national  public  procurement  market  (around  20% 
of GDP) could be improved. 

Businesses’  views  on  corruption  risks  in 
public  procurement  are  below  the  EU 
average.  In  the  Netherlands,  54%  of  companies 
(EU average: 53%) consider conflicts of interest in 
the  evaluation  of  bids  in  public  procurement 
procedures  and  53%  (EU  average:  58%)  tailor-
made specifications for particular companies to be 
a  ‘very’  or  ‘fairly  widespread’  practice.  Among 
companies  that  have  experience  of  and  have 
participated  in  a  public  procurement  procedure, 
19%  think  that  corruption  has  prevented  them 
from  winning  a  public 
tender  or  a  public 
procurement  contract  in  practice  (EU  average: 
25%) (96). 64% of businesses perceive the level of 
independence  of  the  public  procurement  review 
bodies (district  courts)  to be  ‘very’  or  ‘fairly  good’ 
when 
reviewing  public 
procurement cases (97). 

these  bodies  are 

Public  procurement  is  seen  as  one  of  the 
main  areas  at  high  risk  of  corruption  in  the 
country.  The  National  Risk  Assessment  on 
Corruption  is  expected  to  be  finalised  in  early 
2026.  A  specific  governmental  programme  on 
combating  subversive  organised  crime,  including 
corruption,  continues;  as  one  of 
tasks, 
corruption  risks  in  public  and  private  bodies  are 
assessed. As threats towards local politicians have 
intensified, 
evaluation 
recommends  reforming  the  Network  of  Resilient 
Governance. The proposed legislation on increased 
municipal  risk  screening  is  still  going  through  the 
legislative  process.  The  health  sector  is  also 

independent 

an 

its 

(95)  OECD, PMR 2024. 

(96)  Flash Eurobarometer 557, p. 133. 

(94)  CBS, Dutch Trade in Facts and Figures, 2025. 

(97)  Justice Scoreboard (2025); Flash Eurobarometer 555. 

49 

 
 
 
flagged as being at risk of corruption. This includes 
a  public-private  partnership  between  the  financial 
investigative  service  FIOD  and  the  banking  sector 
to 
healthcare 
detect 
professionals (98). 

corruption 

amongst 

the 

and 

and 

stronger 

fragmentation  underscores 

The  Netherlands’  fragmented  e-procurement 
landscape  and  data  quality  issues  highlight 
the need for interoperable systems, common 
standards, 
data 
governance. Given the Netherlands’ decentralised 
e-procurement  service,  which  has  at  least  two 
separate  procurement  services in  operation  (99), 
economic  operators  must  use  several  systems  to 
access  all  public  procurement  procedures, 
creating complexity  and barriers  to  participation. 
need 
This 
for introducing interoperability 
common 
standards. The once-only principle is only partially 
implemented  at  national  level  (see  Annex  7),  and 
buyers  across  the  EU  still  lack  digital  access  to 
relevant evidence. The Netherlands is developing a 
national  public  procurement  data  space  (NPPDS) 
while addressing challenges in setting up a spend-
related  database  and  connecting  to  the  EU-wide 
Public 
(PPDS). 
This requires continued data structuring, alignment 
of  national  variations,  and  collaboration  with  the 
European  Commission  to  ensure  accurate  data 
representation.  It  is  essential  that  the  country 
continuous  on  this  path,  given  that  the  Dutch 
system  would benefit from a  dedicated  public 
procurement 
analysis 
service within  the  government to  support  data-
driven oversight of the procurement lifecycle (100). 

Procurement  Data 

collection 

Space 

data 

and 

Industry and economic security 

The  Dutch  industry  share  is  low  in  EU 
comparison,  but  the  sector  is  one  of  the 
largest in the EU in absolute terms. Industry’s 
weight  in  the  Dutch  GDP  in  2025  amounted  to 
12.8%,  at  the long-term  level,  but  well  below  the 

(98)  Rule of Law Report - Country Chapter Netherlands (2025). 

(99)  As reported in the e-procurement matrix. 

(100) European  Court  of  Auditors,  Special  Report  28/2023: Public 
Procurement  in  the  EU.  Less  competition  for  contracts 
awarded for works, goods and services in the 10 years up to 
2021,  2023, Special  report  28/2023:  Public  procurement  in 
the EU. 

EU  average  (17.3%).  Only  four  EU  countries  have 
lower shares. Manufacturing provides 10% of GDP, 
constant  over  the  last  decade.  Dutch  industry 
remains 
it 
represents  4%  of  EU  industrial  production,  the 
sixth largest industrial sector in the EU (101). 

in  the  EU  context,  as 

important 

High  energy  costs  negatively  affect  energy-
intensive  industries  and  the  attractiveness 
of  the  business  environment.  The  Netherlands 
has  high  electricity  and  gas  prices  for  industry. 
Keeping  a  strong  industrial  base  in  the  country 
depends  to  a  significant  extent  on  affordable 
energy. Investment in energy infrastructure, which 
is  recouped  via  grid  and  transmission  tariffs,  is 
affecting  energy  prices.  EUR 10-11  billion  will  be 
spent  on  expanding the  electricity  and  gas grid in 
2026.  This  combines  with  some  of  the  highest 
energy  taxes  in  the  EU,  resulting  in  a  drop  in  the 
GDP  share  of energy-intensive 
industries from 
around 3% in 2019-2022 to around 2% by 2024. 
Particularly hard-hit – see Graph 5.1 - were rubber 
and plastic (20% drop compared with 2021), non-
metallic  mineral  products  (-20%),  chemicals  (-
15%), basic metals (-15%). (See also Annex 9.) 

The Dutch chemical sector plays a significant 
role in the EU’s strategic autonomy but faces 
is  home  to  a 
challenges.  The  Netherlands 
sizeable  chemical  capacity  (18%  of  EU  cracking 
capacity,  22%  for  ammonia).  On  top  of  the  large 
decline  registered  for  2022-2024,  the  Dutch 
chemical  industry’s  production  had  the  worst 
performance  in  the  EU  in  2025  (-4.9%)  (102).  To 
address  some  of  the  key  challenges  for  the 
prices, 
sector’s 
technological 
and 
integration  with  refineries),  initiatives  are  under 
way  at  EU 
the  competitiveness 
(e.g. 
coordination  tool  for  chemicals)  as  well  as  at 
national 
(expansion  of  offshore  gas 
production). 

competitiveness 
flexibility, 

(high  gas 
infrastructure 

level 

level 

The Netherlands has made sound progress in 
implementing  the  Net-Zero 
Industry  Act 
(NZIA). It  has  successfully designated a  single 
for 
point 
among 
communication 
authorities 
stakeholders. 

contact,  which 
and 

is 
coordination 

Furthermore, 

crucial 

the 

of 

(101) Eurostat, Industrial Production by Country for 2024. 

(102) World  Chemistry  Report,  February  2026,  p. 1.  EU  chemical 

industry contracted by 2.4%. 

50 

 
 
 
been 

there 
a 

for  net-zero 

has 
designated 

have established a  national  contact  point 
to 
strategic 
process  applications 
projects, facilitating the  advancement  of  these 
projects. 
no 
Although 
specific indication of 
net-zero 
in 
acceleration  valley,  the  country’s 
promoting  net-zero  activities  is evident. There  are 
already  five  different  potential  areas  that  could 
be designated, which  highlights 
the  country’s 
commitment to the broader objectives of the NZIA. 
Actively 
can 
help maintain momentum and encourage potential 
strategic projects. 

promoting 

interest 

process 

this 

high-risk, 

strategic  dependency  on 

Dutch  manufacturing  heavily  depends  on 
imports  of  critical  raw  materials  needed  for 
transitions.  The 
the  green  and  digital 
Netherlands’ 
raw 
materials in 2024 is one of the highest in the EU, 
suggesting  limited  diversification in  its  sources  of 
supply.  A  Task  Force  on  Strategic  Dependencies 
has  been  set  up  and  is  working  to  identify  and 
address 
dependencies, 
including  in  raw  materials.  In  2024,  the  value  of 
raw  materials 
imported  unprocessed  critical 
amounted  to  EUR 17  billion 
(EUR 7.4  billion 
without transit). Aluminium, nickel, coking coal and 
copper  dominate  (EUR 14  billion  or  87%  of  the 
total).  China  is  only  the  ninth  largest  supplier  of 
critical raw materials to the Netherlands. In 2023, 
the  Netherlands  was  the  EU’s  largest  importer  of 
critical  raw materials from non-EU  sources. It has 
not  had  any  projects  under  the  Critical  Raw 
Materials Act. 

strategic 

Graph A5.1: Manufacturing industry production: 
total and selected sectors, index (2021=100), 
2015-2024 

Source: Eurostat 

51 

7075808590951001051102015201620172018201920202021202220232024ManufacturingManufacture of wood and of products of wood and cork, except furniture;manufacture of articles of straw and plaiting materialsManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of rubber and plastic productsManufacture of other non-metallic mineral productsManufacture of basic metals 
      
 
Table A5.1:  Single Market and Industry 

Source: (1) Eurostat, (2) EIB Investment Survey, (3) EIF SME Access to Finance Index, (4) Intrum Payment Report, (5) SAFE survey, 
(6) OECD, (7) data up to 2024: Single Market and Competitiveness Scoreboard, 2025: Commission calculation based on TED data, 
accessible at the Public Procurement Data Space (PPDS) (*) the value represented here under EU average is the median, (8) Single 
Market and Competitiveness Scoreboard, (9) European Commission calculations. 

52 

POLICY AREA20212022202320242025EU-27 average124.4126.2123.2125.9126.5100.010.410.510.510.2-12.53.43.23.33.3-3.7Business environment and simplification9.012.69.75.534.034.00.260.250.280.30-0.430.270.210.180.24-0.1911.113.012.516.817.917.411.413.216.213.715.113.6from private entities in the previous or current quarter---30.7324.7047.13from public entities in the previous or current quarter---9.678.615.946.151.947.043.242.640.70.0370.0370.0370.0370.0370.05013191924232771012121461.61.40.60.91.411.31.61.21.21.51.189.1978737483.884.62123232522250.07770.13780.17630.13990.12090.146222.923.723.6--32.713.115.317.620.2-25.281.482.083.083.7-22.430.128.532.032.7-12.2NetherlandsINDICATOR NAMEBusiness environment and investmentProductivity and investmentLabour productivity (GDP per hour worked in PPP terms), % of EU271Business investment (share of GDP)1Public investment (share of GDP)1Impact of regulation on long-term investment, % of firms reporting business regulation as a major obstacle2SME liquidityEIF Access to Finance for SMEs index - loans3EIF Access to Finance for SMEs index - equity3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment4Payment gap - public sector, difference in days between offered and actual payment4Share of SMEs experiencing late payments, %5Industry and economic securitySingle Market IntegrationEU trade integration, average(intra-EU imports + intra EU exports)/GDP, %1EEA Services Trade Restrictiveness index6Public procurementSingle bids, % of total contractors7*Direct awards, % of negotiated procedures7*ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, resolution rate per country, %8Number of pending infringement proceedings8Energy-intensive industriesElectricity prices for non-household consumers1Electrification (electricity as a share of total energy consumption in industry)1Share of energy from renewable sources (renewable energy generation as a share of overall energy consumption)1Critical raw materialsMaterial import dependency, %1Circular material use rate1Operational cleantech manufacturing capacity in 20259 - Solar PV (c: cell, w: wafer, M:module), GW0.219 (m) - Electrolyzer, GW- - Heat pump assembly 0.28 - Battery, GW- 
 
     
 
ANNEX 6: SAVINGS, INVESTMENT AND ACCESS TO FINANCE 

Table A6.1:  Savings and Investments Union summary diagnostic 

Source: OECD (pensions), Eurostat (households' financial wealth), FISMA CMU dashboard (VC and PE), national sources (capital 
taxation). 

The  Netherlands  stands  out  as  one  of  the 
countries that have progressed most towards 
the  policy  goals  of  the  Savings  and 
Investments  Union  (see  Table  A6.1).  Within  a 
business  landscape  where  small  and  medium-
sized  enterprises  play  an  important  role  in  value 
creation,  Dutch  companies,  despite  being  more 
indebted  than  their  EU  peers,  rely  relatively 
moderately on debt finance to fund their activities. 
The  domestic  listed  equity  market  is  one  of  the 
most  developed  in  the  EU,  while  the  deep  debt 
markets  channel  savings  mostly  to  non-bank 
financial  institutions,  banks,  and  the  government. 
Despite a high level  of financial  assets, thanks to 
the  mandatory  participation 
in  well-endowed 
asset-backed pension schemes, households do not 
have  access 
to  a  preferential  savings  and 
investment account and their direct participation in 
capital markets is comparatively low. Bank lending 
by  the  well-capitalised,  liquid  and  sufficiently 
profitable  banking  sector  provides  more  stable 
funding  to  households  than  to  corporates.  The 
sizeable  pensions  funds,  which  are  undergoing  a 
transition towards defined contributions, dominate 
non-bank  financial  intermediation  and  crowd  out 
insurance  companies,  which  are  less  developed 
than  the  EU  average.  The  reform  away  from  the 
defined-benefits 
to 
significantly  strengthen 
investors’ 
interest  for  equity  and  growth  capital,  though  not 
the 
necessarily  domestically.  Even 
Netherlands  has  emerged  as  a  regional  leader  in 
venture  capital  (VC)  thanks  to  a  consistent  and 
predictable  ecosystem,  the  downward  trend  in  VC 
investments  since  2021  suggests  the  Dutch 
economy  might  be  experiencing  a  decline  in 
competitiveness. 
international 
support 
country-specific 
a 
investment, 

is 
institutional 

expected 

principle 

though 

2025 

To 

recommendation  (CSR)  highlighted  the  need  to 
‘address  the  funding  gap  for  late-stage  start-ups 
and  scale-ups  by  leveraging  available  financing 
to  attract 
tools  and  providing 
institutional investors.’ 

incentives 

Business landscape and company 
funding 

More  value  added  in  the  Dutch  economy  is 
generated  by  smaller  and  medium-sized 
companies  than  the  average  EU  business 
landscape,  though  these  companies  provide 
less  employment  than  the  EU  average.  While 
in  the  Netherlands  the  relative  importance  of 
small  and  medium  businesses 
for  value 
generation  is  higher  than  the  EU  average,  large 
companies  play  a  stronger  role  in  employment 
(see  Annex  5  for  more  details).  This  has 
implications for the corporate sector’s demand for 
funding, which are discussed in this annex. 

Even though on average Dutch companies are 
more indebted than their EU peers, they rely 
relatively moderately on debt finance to fund 
their  activities.  Financial  borrowing  by  non-
financial  corporations  (NFCs)  in  the  Netherlands 
is 
reached  108.6%  of  GDP 
significantly higher than the EU average of 71.6% 
(see Graph A6.1). However, given the overall much 
larger  size  of  the  aggregate  balance  sheet  of 
Dutch  NFCs,  which  stood  at  352.6%  of  GDP  at 
end-2024 (versus an EU average of 225.6%), the 
relative  share  of  financial  loans  in  their  funding 
structure  (30.8%)  is  slightly  lower  than  the  EU 

in  2024,  which 

53 

NetherlandsMain featuresRelative EU positioningAssets at 150.9% of GDP (32.3% in the EU)10-year real return of 0.4% (1.4% in the EU)Pension assets, which are very high in volume, yield a low real return.EUR 183 255 per capita (EUR 85 100 in the EU)o/w 2.2% in listed shares and bonds (7.6% in the EU)o/w 3.7% in investment funds (11.1% in the EU)o/w 3.1%  in life insurance (13.4% in the EU)o/w 52.5% in pension claims (13.6% in the EU)Households own a very high volume of financial assets, a high share of which is invested in equity and in capital markets. No savings and investment account.VC at 0.107% of GDP (0.064% in the EU)PE at 0.856% of GDP (0.487% in the EU)High venture capital and very high private equity investments.Capital gains tax of 0%, dividend tax of 15%, assumed interest income tax of 30%. Planned introduction of unrealised capital gains taxation at the rate of 37% as of 2028. Preferential tax treatment for equity investments, very low rates of capital taxation, though significant increases are planned.1-34-1011-1718-2425-27Colours indicate the country's relative ranking based on five groups, ranging from the three best to the three worst performers. The relative ranking as regards an SIU diagnostic topic derives from a consistent cross-country comparison, the starting point of which is the average of the underlying main features.TopicAsset-backed pension schemesHouseholds' financial assetsVenture capital (VC)Private equity (PE)Capital taxation 
 
 
 
 
 
  
 
average  (31.7%).  In  2024,  Dutch  NFCs  reported 
that  about  18%  of  their  investment  was  funded 
externally (vs 25% in the EU), which shows a much 
higher  reliance  on  internal  resources  (103).  At  the 
same  time,  only  7%  of  companies 
in  the 
Netherlands believed they had invested too little in 
the last three years, as opposed to 12% in the EU. 
This  suggests  a  low  perceived  investment  gap. 
However,  this  may  not  be  the  case  for  all  firms, 
especially  for  the  7%  of  companies  that  consider 
themselves financially constrained. 

Graph A6.1: Composition of non-financial 
companies' funding 

natural 

Europe, 

including 

Interestingly, while the general stock market index 
in the Netherlands surpassed the EU average, the 
index  of  Dutch  banks  plummeted  and  never 
recovered  from  the  2008-2009  Global  Financial 
Crisis.  The  Netherlands  is  also  home  to  the  ICE 
Endex,  which  is  a  leading  energy  exchange  for 
continental 
gas 
derivatives  and  EU  emission  allowances (105).  The 
volume of public and private Dutch debt securities 
stood  at  193%  of  GDP  at  end-2024,  making  the 
Netherlands  home  to  one  of  the  most  sizeable 
national  debt markets  in  the  EU.  Bonds  issued  by 
other financial institutions represented almost half 
of the market (47% of the total), followed by debt 
securities  issued  by  banks  (26%)  and  by  the 
government (18%) (106). The share of bonds issued 
by NFCs increased from around 8% in the previous 
years to 10% as of end-2024. 

Non-bank  financial  intermediation  in  the 
Netherlands  is  very  developed  across  all 
segments,  even  though  the  financial  sector 
remains  dominated  by  banks.  After  peaking  at 
311%  of  GDP  in  2020,  the  size  of  the  banking 
sector decreased to 250% of GDP as of end-2024, 
which is in line with the EU average of 251% and 
slightly  below  the  EA  average  of  268%.  Foreign 
presence is limited and accounts for about 10% in 
terms  of  assets.  With  the  top  five  monetary 
financial  institutions (MFIs) (107) representing 81% 
of the sector, banking concentration appears to be 
significantly  higher  than  the  EU  average  of  51%, 
which is also reflected in significantly lower inter-
bank lending in the Netherlands than elsewhere in 
the EU. The pension funds sector, with total assets 
of 171% of GDP at end-2024 based on data from 
the  ECB,  dominates  non-bank  intermediation  and, 
together  with  Denmark  and  Sweden,  accounts  for 
the  largest  asset-backed  pension  schemes  (108)  in 
the EU. Investment funds, though their total assets 

(105) Fore  further  details,  consult  the  ICE  Endex  institutional 

website. 

(106) The other financial institutions refer to the non-monetary 

financial institutions, i.e. pension funds, insurance 
corporations and investment funds. 

(107) The  MFIs,  i.e.  the  financial  institutions  that  participate  in 

money creation, refer to banks. 

(108) The Dutch pension funds sector, where occupational pension 
providers  are  set  up  under  the  IORP  Directive,  unlike  in 
Denmark  where  they  are  set  up  under  the  Solvency  II 
Directive,  is  sometimes  reported  as  the  fifth  largest  in  the 
world.  Such  a  country  comparison  is,  however,  inaccurate 
because  of  significant  structural  differences  in  contributors’ 
ownership rights across national regimes. 

Source: Eurostat. End-2024. 

Size and structure of the financial 
sector 

The Dutch economy stands out for one of the 
deepest  domestic  capital  markets  in  Europe. 
Based  on  ECB  data,  the  market  capitalisation  of 
issued  by  Dutch  companies (104) 
listed  equity 
reached  122%  of  GDP  at  end-2024  (see  Graph 
A6.2), which is the fourth highest among Member 
States,  after 
Ireland,  Denmark  and  Sweden. 
Characteristically, the total market capitalisation is 
split  almost  equally  between  non-financial  and 
financial  corporations,  which  reflects  the  strong 
role  that  finance  plays  in  the  Dutch  economy. 

(103) See the 2025 EIB Investment Survey. The higher reliance on 
internal resources could be ascribed to the higher importance 
of  SMEs  and  to  intra-group  funding  within  multinational 
companies. 

(104) This  figure is  a  proxy  for  the  degree  of development  of  the 
Dutch  stock  exchange,  given  that  i)  Dutch  companies  could 
be listed abroad and ii) foreign companies could be listed in 
the Netherlands as well. 

54 

050100150200250300350400NLEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
     
 
 
dropped  by  almost  50  percentage  points  to  82% 
remain 
of  GDP  between  2020  and  2024, 
significant, though below the EA average of about 
130%  of  GDP.  Insurance  corporations,  whose 
assets were equivalent to 40% of GDP as of end-
2024,  are  relevant  as  well,  although  they  appear 
less  developed  than  the  EU  average  of  55%  of 
GDP. 

Graph A6.2: Capital markets and financial 
intermediaries 

Dutch  households  held  less  than  20%  of  their 
financial  wealth  in  cash  and  bank  deposits,  which 
is  the  third  lowest  in  the  EU  after  Denmark  and 
Sweden,  and  well  below  the  EU  average  of  32%. 
However,  direct  holdings  of  bonds  and  equity  are 
significantly  lower,  both  in  nominal  amounts  per 
capita  and  relative  to  GDP  (see  Graph  A6.3), 
despite  a  tax  regime  that  penalises  income  from 
equity  less  than  income  from  debt  instruments 
(110).  The  absence  of  a  preferential  savings  and 
investment  account,  unlike 
in  Sweden  and 
Denmark  (111),  also  contributes  to  the  low  direct 
retail participation in equity and capital markets. 

literacy 

is  very  high 

recognises 
to  foster 

in  the 
Financial 
literacy 
that 
Netherlands.  Dutch  society 
retail 
is  crucial 
financial 
investors’  participation  in  capital  markets  and  to 
familiarise SMEs with alternatives to bank lending. 
The  Netherlands  has  had  a  national  financial 
literacy  strategy  in  place  since  2008.  The  current 
2024-2026  national  strategy  is  based  on  the 
EU/OECD  competence  framework  and  aims  to 
prepare people,  from  a  young  school  age,  to  take 
financially sound decisions. The Dutch central bank 
is committed to promoting financial education and 
responsible financial  behaviour. As a result of the 
persistent  educational  measures,  including  the 
‘national  money  week’,  the  2023  Eurobarometer 
on monitoring financial literacy in the EU ranks the 
Netherlands first for financial knowledge. It shows 
that 43% of the Dutch public have a high level of 
financial  knowledge  (26%  in  the  EU),  while  18% 
have  a  low  level  (24%  in  the  EU).  Moreover,  only 
8% of Dutch respondents (23% in the EU) declare 
that  they  feel  some  degree  of  discomfort  using 
digital financial services. 

(110) In 2025, the Dutch state taxed income from investments in 
equity,  bonds,  and  secondary  houses  on  an  assumed  return 
capped  at  5.88%,  at  the  rate  of  36%,  with  the  first 
The 
EUR 57 684  of  accumulated  wealth 
government  plans  to  introduce,  as  of  2028,  unrealised 
capital  gains  taxation  at  the  rate  of  36%  with  a  tax-free 
allowance of EUR 1 800 per person. 

tax-free. 

(111) For  a  comparative  review  of  the  various  features  of 
preferential  savings  and  investment  accounts  in  Member 
States,  see  the  dedicated  Commission  staff  working 
document SWD(2025) 6800. 

Source: ECB, EIOPA, AMECO. End-2024. 

Households’ participation in capital 
markets 

to  asset-backed 

large  and  mandatory 
Thanks  to  their 
contributions 
pension 
schemes,  Dutch  households  hold  high 
volumes  of  financial  assets.  As  of  end-2024, 
household  aggregate  financial  assets  equated  to 
293%  of  GDP,  which  is  above  the  EU  average  of 
212%,  though  still  significantly  behind  the  US 
average  of  446%.  After  correcting  for 
the 
relatively  higher 
level  of  Dutch  households’ 
indebtedness,  their  net  financial  assets  stood  at 
199.7%  of  GDP,  which  is  still  above  the  EU 
average  of  162.3%  of  GDP. 
in 
insurance  and  pension  funds  (164%  of  GDP)  are 
almost  three  times  larger  than  the  EU  average 
(59%  of  GDP)  (109).  As  of  end-2024,  in  per  capita 
terms  each  Dutch  person  held  EUR 183 300  in 
financial  assets,  which  is  the  third  largest  in  the 
EU after Denmark and Luxembourg and more than 
twice  as  high  as  the  EU  average  of  EUR 85 100. 

Investments 

(109) See also the Overview of CMU Indicators. 

55 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250300   Listed equity               Bonds                        Assets by sector% of GDP 
     
 
 
Graph A6.3: Composition of households' financial 
assets 

Source: Eurostat. End-2024. 

The banking sector: resilience and 
financing of the economy 

of  Q3-2025, 

The banking sector appears resilient to risks, 
has  a  low  exposure  to vulnerabilities, and  is 
thus  not  constrained  in  its  role  of  funding 
the  economy.  As 
overall 
capitalisation  stood  at  22.3%,  well  above  the  EU 
average of 20.2%, and higher than in the previous 
three years (see Table A6.2). As of end-2024, the 
aggregate  MREL  level  (Minimum  Requirement  for 
Own Funds and Eligible Liabilities) stood at 33.7%, 
5.1  percentage  points  above  the  required  level 
(112).  With  a  return-on-equity  of  10.1%  as  of  Q3-
2026,  profitability  remains  in  line  with  the  EU 
average of 9.6%, though declining from 10.9% in 
2023 and 10.6% in 2024. On the positive side, at 
1.2%,  the  aggregate  ratio  of  non-performing 
loans,  which  has  been  stable  over  the  years, 
remains  significantly  below  the  EU  average  of 
1.9%.  However,  banks’  asset  quality  outlook  is 
subject  to  increased  global  uncertainty  and  its 
likely  impact  on  energy  prices  and  economic 
growth.  Dutch  banks  maintain  strong  liquidity 
positions  thanks  to  ample  liquidity  buffers.  As  of 
end-2024,  at  the  aggregate  level,  the  net  stable 
funding  ratio  stood  at  137.6%,  while  the  liquidity 
coverage ratio was close to 170%. 

(112) See  the  latest  MREL  Dashboard  published  by  the  EBA.  For 
further 
in  the 
information  on  the  bail-in  mechanics 
Netherlands,  see  the  dedicated  publication  by  the  Dutch 
central bank. 

lending 

The  dynamics  of  bank 
in  the 
Netherlands is driven by loans to households, 
which  account  for  71.7%  of  the  stock  of  all 
bank loans. As of end-2024, loans to households, 
mostly  mortgages,  reached  EUR 617 billion  or  the 
equivalent  of  54.4%  of  GDP.  Corporate  loans  to 
non-MFIs  amounted  to  EUR 272 billion  or  the 
equivalent  of  24.0%  of  GDP.  Though  somewhat 
volatile,  the  growth  of  bank  credit  to  households 
has been significantly less unstable than corporate 
credit.  In  the  period  Q1-2020  to  Q4-2024  the 
shares  of  loans  for  real  estate  activity  and  for 
construction  increased  respectively  from  32.8% 
and 2.9% to 35.5% and 5.4%. This suggests that, 
while  total  bank  credit  to  corporates  has  been 
recovering,  an  increasing  part  of  bank  lending 
supported real estate and related activities instead 
of  other  productive  ventures  in  the  economy. 
Hence,  smaller  companies  might  be  facing 
difficulties with access to finance. As of Q3-2025, 
companies 
bank 
rebounded  vigorously,  by  4.7%  on  a  yearly  basis, 
well  above  the  EU  average  of  2.5%  (see  Table 
A6.2).  The  expansion  of  lending  to  households 
accelerated  even  further,  at  the  annual  rate  of 
5.3%  as  of  Q3-2025,  also  well  above  the  EU 
average of 2.6%. 

non-financial 

lending 

to 

Role of non-bank financial 
intermediaries 

The Dutch occupational asset-backed pension 
system  is  one  of  the  most  developed  in  the 
EU.  In  the  Netherlands,  participation  in  Pillar  2 
pensions 
is  mandatory  for  all  wage-earners 
through collective bargaining agreements, with an 
average  contribution  rate  of  17.9%  (maximum 
rate of 25%). Most of the investment vehicles are 
industry-wide,  though  company-specific  pension 
funds exist as well (113). Dutch pension funds were 
set up as defined-benefits pension schemes under 
the 
tax 
IORP  Directive  and  offer  an  EET 
profile (114).  Ownership  rights  remain  very  limited 

(113) For  further  details  on  the  asset-backed  pension  schemes  in 
the  Netherlands,  see  the  Country  profiles  published  by  the 
OECD  and  the  Country  fiches  of  the  latest  Ageing  report 
published by the European Commission. 

(114) The EET feature means that i) contributions are tax-exempt, 
ii)  investment  returns  are  tax-exempt,  and  iii)  pay-outs  are 
taxed. 

56 

02004000100200NLEUNLEUper capita (000 EUR) (lhs)% of GDP (rhs)Other equityUnlisted sharesListed sharesBondsInvestment fundsInsurance and pension fundsCurrency and depositsHH Debt (liability) 
     
 
 
reaching 

their  contributions  before 

despite  the  higher  flexibility  introduced  by  the 
ongoing  reform.  Contributors  do  not  have  access 
to 
the 
retirement  age  (currently  67  years)  and  cannot 
liquidate  them  after  retirement.  Re-investment  in 
another  vehicle  is  not  possible.  Accrued  holdings 
are  not  inheritable.  As  of  end-2024,  based  on 
OECD  data,  total  assets  accumulated  by  Dutch 
asset-backed  pension  schemes  amounted 
to 
EUR 1 694 billion,  which  represented  150.9%  of 
GDP  or  EUR  94 111  per  capita.  Concentration  is 
very  high,  with  the  three  largest  investment 
vehicles representing almost 52% of the sector as 
of  end-2023.  The  public  servants’  pension  fund 
alone holds more than one quarter of all assets. 

As  the  transition  from  defined  benefits  to 
defined  contributions  is  progressing,  Dutch 
pension  funds’  sustainability  is  improving, 
while  the  share  of  assets  invested  in  high-
yield  and  riskier  investments  is  expected  to 
grow.  The  prolonged  period  of  low  interest  rates 
as  well  as  the  defined-benefits  feature  of  the 
system have been putting a significant pressure on 
investment vehicles’ funding, as shown by assets-
to-liabilities ratios that were as low as 95% in late 
2020.  To  improve  the  funds’  sustainability  and 
risk-sharing between the different age groups, the 
authorities  are  currently  implementing  a  gradual 
transition  towards  defined  contributions.  This 
reform  of  Pillar  2  of  the  pension  system  is 
included in the Dutch RRP, including the transfer of 
the  pension  assets  of  at  least  66%  of  policy 
holders to the new pension system. Based on end-
2024  data 
Insurance  and 
Occupational  Pensions  Authority  (EIOPA),  assets 
were distributed mainly between investment funds 
(33.2%), government bonds (22.4%), equity (19%), 
real  estate  (10.2%),  corporate  bonds  (8.7%)  and 
deposits  (3.7%)  (115).  The  Dutch  pension  funds 
raised 14% of the funds committed to VC and PE 
(private equity) between 2007 and 2023, which is 
slightly below the EU average of 15%, despite the 
Netherlands  being  a  regional  leader  in  venture 
capital  and  a  European  leader  in  funded  pension 

from  European 

(115) While equity holdings appear high, only about 5% of shares 
and  participations  are  invested  in  the  Netherlands,  which 
implies that the sector’s actual contribution to the financing 
of  the  domestic  economy  remains  limited,  while  foreign 
investments imply a specific currency risk. For details on the 
geographical distribution of Dutch pension funds’ assets, see 
the  note  Attractive  European  capital  markets  published  by 
the Authority for the Financial Markets (AFM). 

schemes (116).  The  ongoing  transition  towards 
defined  contributions  will  imply  a  sizeable  re-
allocation  of  investments  from  sovereign  bonds 
towards  more  equity  and  growth  capital,  though 
not  necessarily  domestically (117).  Pension  funds 
are  also  exposed  to  derivatives,  which  entails 
some  specific  liquidity  risks,  notably  due  to  the 
dependence on well-functioning repo markets (118). 

life 

been 

sector 

The  insurance  sector  in  the  Netherlands 
appears  sound  despite  an  aggregate  capital 
level that is below the EU average. The Dutch 
undergoing 
has 
insurance 
consolidation  over  the  last  two  decades,  with  the 
number  of  supervised  entities  decreasing  from 
358  in  2004  to  127  as  of  end-2024.  Fourteen 
insurance,  eight 
in 
companies  specialise 
companies  in  re-insurance,  with  the  rest  active  in 
the  non-life  business  line.  However,  in  terms  of 
total  assets,  life  insurance  remains  by  far  the 
most  important  segment.  As  of  end-2024,  the 
total  assets  of  all  insurers  were  equivalent  to 
40.3% of GDP, which is lower than the EU average 
of 54.8% and below the peak from 2020 at 68% 
of GDP, despite an increase in the value of assets 
and the insurance penetration rate being the 15th 
highest  globally (119).  As  of  end-2024,  insurers’ 
solvency  ratio  of  185.7%,  though  robust  and 
above  statutory  requirements,  was  significantly 
below  the  EU  average (120)  and  lower  than  in 
previous  years  (see  Table  A6.2).  In  terms  of  non-
life risks, EIOPA estimates that the Netherlands is 
exposed  to  a  high  protection  gap  for  coastal 
flooding (a score of 3) and a significant protection 

(116) See ECMI - Closing the gaping hole in the capital market for 

EU start-ups – the role of pension funds. 

(117) Analysts  estimate  that  Dutch  pension  funds  will  divest  at 
least EUR 125 bn of government bond holdings by 2028. 

(118) However,  the  ongoing  transition  to  defined  contributions  is 
expected to ease the risk of fire sales for liquidity reasons, as 
shown in the 2024 Liquidity risk stress tests of the DNB and 
AFM. 

(119) See the FSAP Country Report 24/170 published by the IMF. 

(120) In addition, the technical note to the 2024 FSAP by the IMF 
clarifies that the Volatility Adjustment (VA) has a significant 
impact  on  Dutch  life  insurers.  For  companies  using  the  VA, 
the SCR ratio would have been around 70 percentage points 
lower,  though  still  above  the  regulatory  threshold  of  100%. 
This  is  due  to  some  structural  features  of  the  Dutch  life 
insurers.  First,  the  duration  of  technical  provisions 
is 
considerably  longer  than  in  other  EU  countries.  Second,  the 
relatively  sizeable  exposure  to  mortgage  loans  is  not 
properly  reflected  in  the  ‘representative  portfolio’  used  by 
EIOPA to calculate the VA. 

57 

 
 
 
the EU average of 0.058%, though on the decline 
since  2021  (124).  Private  equity  (PE)  investments, 
despite  a  moderate  decline,  amounted to  0.856% 
of  GDP  in  2022-2024,  significantly  above  the  EU 
average of 0.461% and second only to Sweden in 
the  EU.  Over  the  past  decade,  the  country  has 
emerged  as  a  prominent  regional  player  in  the 
start-up  ecosystem  thanks  to  a  consistent  and 
predictable  environment  that  is  favourable  for 
innovative business projects (see Annex 4 for more 
details).  Yet,  in  2025  VC  investments  continued 
their declining trend and contracted by 2% relative 
to  the  previous  year,  which  suggests  the  Dutch 
economy  might  be  experiencing  a  decline  in 
international competitiveness (125). 

The funding gap for late-stage start-ups and 
scale-ups  remains  an  issue,  despite  ongoing 
initiatives  in  relation  to  the  2025  CSR  to 
‘[a]ddress  the  funding  gap  for  late-stage 
leveraging 
start-ups  and  scale-ups  by 
available  financing  tools  and  providing 
incentives  to  attract  institutional  investors.’ 
As of end-2024, the total portfolio of InvestNL, the 
Dutch promotional institution which the Ministry of 
Finance  endowed  with  a  EUR 3 billion  capital  in 
2019,  reached  EUR 1.4 billion  committed  to  180 
companies.  To  mobilise  private  capital  directly 
towards  scale-ups  and  projects  with 
larger 
financing  needs, 
the  authorities 
in  2025 
committed  EUR250 million  to  a  Blended  Finance 
instrument under InvestNL, currently under review 
for  State  aid  approval.  Another  EUR 200 million 
was  committed  to 
the  continuation  of  the 
European  Tech  Champions  Initiative  (ETCI  2.0).  In 
addition,  ETCI  is  also  making  efforts  to  attract 
institutional  investors  to  the  fund-of-funds  within 
the  initiative,  where  it  expects  to  mobilise  about 
EUR 600 million.  While 
these 
ongoing  initiatives  are  still  to  come,  the  need  to 
leverage  available  financing  tools  and  to  provide 
incentives 
investors 
remains. 

institutional 

to  attract 

results  of 

the 

gap  for  flooding  in  general  (score  of  2.5),  which 
requires monitoring (121). 

In  terms  of  aggregate  asset  exposure, 
insurance  companies’  balance  sheets  appear 
soundly  diversified.  Based  on  end-2024  data 
from EIOPA, the sector’s aggregate balance sheet 
investment  funds 
was  exposed  primarily 
(21.6%),  and 
(33.7%),  mortgages  and 
government  bonds  (16%).  The  financing  of  the 
corporate sector, through bonds (13.1%) or equity 
(7.7%), was comparatively less significant. 

loans 

to 

between 

investment 

In  addition  to  pension  funds  and  insurance 
companies,  asset  management  is  another 
major segment of the Dutch financial sector. 
Total  assets  under  management  expanded  by 
further 7% in 2024 and reached EUR 2 119 billion 
or  187%  of  GDP,  ranking  the  Netherlands  first  in 
the  EU,  followed  by  France  (181%)  and  Denmark 
(138%) (122).  The  assets  under  management  were 
distributed 
funds 
(EUR 902 billion)  and  discretionary  mandates 
(EUR 1 217 billion).  All  funds  domiciled  in  the 
Netherlands  are  also  managed  there,  while  Dutch 
reached 
funds, 
ownership 
of 
EUR 1 262 billion, 
of 
exceeds 
domestically registered funds by almost 40%. This 
reflects  the  large  aggregate  size  of  the  sector  of 
institutional 
the  Netherlands. 
Investment  funds’  total  assets  were  distributed 
between  equity  funds  (32.8%),  real  estate  funds 
(15%),  bond  funds  (10.2%),  mixed  funds  (8.8%) 
and  hedge  funds  (0.9%)  (123).  The  remaining  third 
of  total  assets  is  reported  as  invested  by  other 
funds. 

which 
the 

investors 

volume 

in 

Venture capital ecosystem 

The  Netherlands  is  a  regional  leader  in  VC 
and  PE  investments  in  the  EU.  Venture  capital 
(VC)  investments  in  the  Netherlands  averaged 
0.107% of GDP in 2022-2024, significantly above 

(121) See  EIOPA  Dashboard  on  insurance  protection  gap  for 

natural catastrophes. 

(122) See  the  2025  Asset  Management  Report  published  by  the 

EFAMA. 

(123) In  the  absence  of  EFAMA  data  on  the  distribution  of  total 
assets between the different classes, the DNB publishes the 
reported breakdown between types of funds.  

(124) See the updated Overview of CMU Indicators. 

(125) See the Dutch country page on Dealroom. 

58 

 
 
 
Table A6.2:  Financial sector indicators 

(1) Annualised data. EU data for credit growth and pension funds refer to the EA average. 
Source: ECB, Eurostat, EIOPA, DG FISMA CMU dashboard, AMECO. 

59 

20182019202020212022202320242025-Q3EUTotal assets of MFIs, % of GDP294.9291.0311.2296.6288.9263.6252.5254.2246.1Common equity Tier 1 ratio17.016.917.917.816.516.717.217.716.8Total capital adequacy ratio22.422.923.222.721.221.222.022.320.2Overall NPL ratio, % of all loans1.91.81.91.41.31.31.41.21.9NPL ratio, loans to NFCs4.34.34.83.33.23.03.02.83.5NPL ratio, loans to HHs1.21.11.31.31.01.01.11.02.1Return on equity ratio18.17.73.18.27.710.910.610.19.6Loans to NFCs, % of GDP32.230.329.628.226.725.024.224.029.3Loans to HHs, % of GDP71.268.170.465.460.157.655.655.343.6NFC credit growth rate, %-0.8-1.80.94.02.5-1.01.94.72.5HH credit growth rate, %0.10.2-0.91.21.71.03.45.22.6Stock market capitalisation, % of GDP122.0152.0150.3170.6121.3129.7123.1132.569.9Initial public offerings, % of GDP1.090.002.142.040.000.010.00-0.06Market funding ratio50.750.545.950.348.547.245.7-49.7Private equity, % of GDP0.6830.7680.8770.9291.0570.9580.856-0.487Venture capital, % of GDP0.0430.0530.0680.0990.1130.1200.107-0.064Financial literacy, composite index-----53.0--45.5Bonds, % of HHs' financial assets0.30.20.20.20.20.20.2-2.8Listed shares, % of HHs' financial assets1.51.61.62.01.91.92.0-4.8Investment funds, % of HHs' financial assets3.33.33.03.63.43.53.7-11.0Insurance/pension funds, % of HHs' financial assets62.364.465.061.555.356.255.9-27.8Total assets of insurers, % of GDP60.362.868.159.344.742.740.738.753.9Pension assets, bn EUR---1836.31445.51572.41693.8-5813.8Pension assets, % of GDP---206.0145.5149.7150.9-32.310y real return average of pension assets, %-----1.40.4-1.4Pension funds assets, ECB (% of GDP)-209.9235.9222.1170.9171.5170.5163.023.01-34-1011-1718-2425-27Colours indicate performance ranking among the 27 EU Member States.Banking sectorNon-banking sector 
 
 
 
 
      
 
ANNEX 7: EFFECTIVE INSTITUTIONAL FRAMEWORK 

institutional  framework 

An  effective 
is 
essential  for  competitiveness.  This  requires 
public 
integrity,  high-quality 
legislation,  regulatory  simplification  and  efficient 
services for people and for businesses. 

trust  built  on 

above 
the  EU  average.  Additionally,  both 
businesses  and  the  general  public  retain  trust  in 
public  administrations  ability  to  handle  their  data 
securely and responsibly (130).  

Public trust 

Quality of lawmaking and 
implementation 

Graph A7.1: Trust in the justice system, regional / 
local authorities and in government 

(1) EU-27 since 2019; EU-28 before 
Source: European Commission, Standard Eurobarometer 
surveys 

perceived 

Trust  in  the  Dutch  government  has  fallen  to 
one  of  the  lowest  levels  in  the  EU.  Trust  in 
government  dropped  below  the  EU  average 
(Netherlands 24%; EU 33%) (see graph A7.1). This 
is  the  sharpest  decline  in  the  EU  between  2017 
and  2025  (from  66%  in  2017)  (126).  This  fall 
seems  to  be  the  result  of  political  instability,  the 
government’s 
and 
concerns over ministers’ competence (127). Trust in 
government has also been negatively impacted by 
systemic  failures  and  scandals  such  as  the 
childcare  allowance  scandal 
the 
response  has  is  seen  as  delayed  and  insufficient 
(128)(129). There is a contrast between the low trust 
in  government  and  the  high  levels  of  trust  in  the 
legal  system,  among  the  highest  in  the  EU 
(Netherlands  77%;  EU  56%),  and  the  trust  in 
regional and local authorities (67%), which is also 

indecisiveness 

for  which 

(126) Sociaal and Cultureel Planbureau, Burgerperspectieven 2025. 

(127) Ibid. 

(128) Commissie Van Dam, 2025, Minder beloven, meer doen.  

(129) Sociaal and Cultureel Planbureau, 2025, Kennisnotitie 

Vertrouwen in de politiek. 

60 

is 

but 

room 

The  Netherlands  has  a  sound  framework  for 
assessing  the  impact  of  new  and  existing 
legislation, 
for 
there 
improvement  (Table  A7.1).  The  Netherlands  has 
improved  its  policy  framework,  mostly  thanks  to 
enhanced  transparency  for  ex  post  evaluations. 
However, transparency remains well below the EU 
average  for  regulatory  impact  assessments  of 
both  primary  (Netherlands  0.1;  EU  0.5)  and 
secondary legislation (Netherlands: 0.1; EU 0.4).  

to  monitor 

implementation  and 

When developing legislation, the government 
is  only  required  to  estimate  the  costs  and 
assess  the  benefits  of  new  legislation  for 
business,  people  and 
the  government. 
Monitoring  does  not  need  to  include  specific 
indicators to measure progress,  which hinders the 
ability 
the 
effectiveness of ex post evaluations (131). That has 
led  to  43%  of  businesses  finding  administrative 
procedures  complex  (132)  and  to  implementation 
difficulties. 
the 
its  2025 
Implementation at municipal level, the association 
of  municipalities  (VNG)  referred  to  a  number  of 
challenges arising from complex rules that do not 
take the reality of municipalities into account and 
have 
the 
unintended 
implementation stage (133). 

consequences 

State 

of 

at 

In 

Implementation  of  key  policies  may  be 
hindered  by  capacity  challenges.  The  Dutch 
Court of Audit found 40 operational shortcomings 

(130) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(131) OECD, 2025, Indicators of Regulatory Policy and Governance 

(iREG),. 

(132) European Commission, 2024, Flash Eurobarometer survey 
557 on Businesses' attitudes towards corruption in the EU. 

(133) , Vereniging van Nederlandse Gemeenten (VNG), Stand van 

de Uitvoering Gemeenten 2025. 

00.10.20.30.40.50.60.70.80.9AutumnSpringAutumnSpringSpringAutumnWinterSummerWinterSpringWinterSummerAutumnSpringAutumnSpringAutumnSpring202520242023202220212020201920182017Justice,  legal system EU-27Justice,  legal system NLRegional or local public authorities EU-27Regional or local public authorities NLGovernment  EU-27Government  NL 
 
     
 
 
 
 
Table A7.1:  The Netherlands. Selected indicators on better regulation practices for primary legislation 

Source: OECD, 2025, Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025   

update 

budget 

incorporates 

in different ministries (134), including  three serious 
ones, up from zero, as well as procurement errors 
affecting  procedures  amounting  at  least  EUR  1.6 
billion,  leading  to  implementation  difficulties.  The 
gap  between  planned  and  actual  spending  grew 
from  around  EUR  4  billion  in  2020  to  EUR  17 
billion in 2024(135). The Ministry of Finance’s  mid-
year 
an 
implementation shortfall of between EUR  7 and 8 
billion  per  year  for  2025  and  2026  (136).  89%  of 
municipalities reported that policy implementation 
fell  short  of  targets  in  2024,  caused  by  staff 
shortages  and  lack  of  expertise,  despite  a  17% 
workforce expansion since 2017(137). This systemic 
implementation  shortfall  severely  constrains  the 
Netherlands'  capacity  to  deliver  on  reforms  and 
policy  goals.  Strengthening  coordination  between 
different levels of governance could help close this 
implementation gap. 

the 

regulatory 

The  Dutch  government  is  taking  steps  to 
minimise 
by 
strengthening  the  assessment  of  proposed 
legislation and simplifying existing rules and 
regulations.  The  advisory  board  on  regulatory 
burden  (Adviescollege  Toetsing  Regeldruk  (ATR)) 

burden 

was established in January 2026 as a permanent, 
independent body (138). Its mandate has since been 
expanded to assess proposed legislation, including 
EU  regulations,  for  regulatory  burden.  Alongside 
this,  the  government  has  launched  a  programme 
to  simplify  500  rules  by  summer  2026  (139),  as 
part  of  a  broader  drive  to  reduce  regulatory 
burden costs by 20% by end of 2026.  

The  business 
impact  assessment  system 
(bedrijfseffectentoets)  enables  ministries  to 
assess the impact on businesses of proposals 
before  review  by  ATR.  This  system  now 
incorporates  a  "no,  unless"  principle  under  which 
new 
if 
demonstrably  necessary  (140).  In  2024,  The  ATR 
expressed a negative opinion for 45% of proposed 
legislation,  preventing  an  increase  of  regulatory 
burden for businesses worth over EUR 426 million 
(141). 

reporting  may  be 

imposed  only 

(138) Eerste Kamer der Staten-Generaal, 2025, Instellingswet 
Adviescollege toetsing regeldruk; Rijksoverheid, 2025, 
Adviescollege toetsing regeldruk krijgt stevigere rol. 

(134) Algemene Rekenkamer, 2025, Bij 3 ministeries ernstige 

problemen in uitvoering van rijksbeleid. 

(135) ESB, 2025, Steeds minder voorgenomen overheidsuitgaven 

(139) Tweede Kamer der Staaten-Generaal, 2025, Stand van 

zaken ten aanzien van het versterken van het 
ondernemingsklimaat en aanpak vermindering regeldruk voor 
ondernemers. 

worden uitgegeven. 

(136) Rijksfinancien, 2025 Voorjaarsnota. 

(140) Rijksoverheid, 2025, Kabinet voorkomt regeldruk 

ondernemers door aanscherpen Bedrijfseffectentoets. 

(137) Rikjsoverheid, 2025, Integraal Overzicht Financiën 

(141) Adviescollege Toetsing Regeldruk, 2025, ATR Jaarverslag 

Gemeenten. 

2024. 

61 

Tools for smart legislation: Share of possible impacts assessed for all primary laws when developing legislation 1Regulators are required to identify and quantify the benefits of a new primary law0Regulators are required to identify and assess the impacts of alternative non-regulatory options1Tools for effective implementation: when developing laws, regulators are required to:Assess the level of compliance1Identify and assess potential enforcement mechanisms1Specify the methodology of measuring progress in achieving the law's goals0Oversight of better regulation: There is an external  body responsible for reviewing the quality of RIAs and of ex post evacuations 1There are publicly available assessments of the effectiveness of RIA in modifying regulatory proposals 1There are reports on the level of compliance by government department with the requirements of RIA1There are indicators on the percentage of ex post evaluations that comply with guidelines0The effectiveness of ex post evaluations in improving the regulatory stock has been assessed in the last five years0 
 
 
 
   
 
Public service delivery and 
digitalisation 

Graph A7.2: Most time-consuming aspects of 
service delivery 

Source: European Commission, 2026, Flash Eurobarometer 
surveys 567 and 568 on satisfaction with administrative 
services. 

Although  people  are  broadly  satisfied  with 
administrative  services,  their  perception  of 
service  delivery  has  fallen  sharply  since 
2023. 46% of companies and 51% of people say 
they  are  satisfied  with  administrative  services, 
above  the  EU  averages  of  42%  and  45% 
respectively  (142).  Both  companies  and  people 
completing 
identify 
application  forms  as  the  most  time-consuming 
aspects  of  obtaining  administrative  services 
(Graph  A7.2).  56%  of  individuals  say  they  need 
more  correspondence  than  expected  to  obtain 
administrative  services,  which  is  below  the  EU 
average of 69%.  

processing 

time 

and 

it  as 

Perceptions of service delivery have changed 
since 2023(143), with a significant decrease in 
the  public’s  overall  perception  of  public 
lacking 
administration.  43%  describe 
transparency,  10  percentage  points  (pps)  higher 
than in 2023; 38% describe it as ‘not close to the 
citizens’,  6  pps  higher;  and  37%  describe  it  as 
slow,  9  pps  higher.  Obstacles  to  administrative 
services  -  mostly  in  the  form  of  delays  and 
increased  operational  costs  -  have  a  detrimental 
effect  on  49%  of  companies 
(EU:  51%). 
Additionally,  45%  of  companies  think  that  the 
administration  is  not  transparent  about  how  it 

(142) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

uses  business  data.  This  proportion  is  well  above 
the EU average of 28%, and the highest in the EU. 
This  demonstrates  a  growing  disconnect  between 
administrative performance and the experience of 
users, i.e. people and businesses. 

The Netherlands has seen a slight increase in 
the  provision  of  digital  public  services  but 
further progress is needed in the provision of 
electronic  health  records  (Table  A7.2).  The 
availability of digital public services for the public 
has  increased  slightly,  remaining  above  the  EU 
average.  In  terms  of  the  provision  of  electronic 
health records, the Netherlands’ e-health maturity 
score  dropped  to  its  lowest  level,  even  further 
below  the  EU  average  (144).  The  decentralised 
nature  of  the  healthcare  system  has  complicated 
previous  efforts,  and  the  Netherlands  is  working 
platform 
on 
(‘MijnGezondheidsoverzicht’,  which  means 
’My 
(145).  Cross-border  service 
Health  Overview’) 
accessibility  has  increased  to  80  (from  78)  (146), 
higher than the EU average of 71.   

centralised 

health 

new, 

a 

efficiency. 

Digital  public  services  are  widely  used,  but 
there  is  room  for  improvement  in  terms  of 
user-friendliness 
The 
and 
proportion  of  e-government  users  remains  stable 
and well above the EU average (Netherlands 96%; 
EU  76%),  and  the  proportion  of  people  using  eID 
remains  high  at  95%  (EU:  52%).  Although  overall 
eID  usage has remained stable, its  frequency and 
scope  of  use  have  increased,  partly  driven  by  a 
growing  number  of  connected  services  and 
organisations (147). The Netherlands is developing a 
digital  identity  wallet  to  improve  people’s  access 
to  public  services  and  has  run  pilots  in  selected 
municipalities.  Despite  the  very  high  uptake  in 
digital  public  services,  24%  of  people  stated  that 
digital  services  either  increase  or  do  not  reduce 
to  obtain 
the 
that 
administrative 

effort  needed 

services.  This 

time  and 

suggests 

(144) The provision of electronic health records has decreased in 
the past year following the discontinuation of a pilot to 
assist legal guardians and other authorised persons in 
accessing health data on behalf of others. 

(145) Ministerie van Volksgezondheid, Welzijn en Sport, 2025, 

MijnGezondheidsoverzicht. 

(146) European Commission, 2025, Digital Decade 2025: Country 

reports. 

(143) European Commission, 2023, Flash Eurobarometer 526 
Understanding Europeans’ views on reform needs. 

(147) Logius, Ministerie van Binnenlandse Zaken en 
Koninkrijksrelaties, 2025, DigiD usage report. 

62 

0%10%20%30%40%50%Time forresponsesApplicationformsDocumentspreparationTime forresponsesApplicationformsDocumentspreparationPeopleBusinessesEU 
     
 
 
Table A7.2:  Digital Decade key performance indicators: availability of digital public services 

(1) Digital Decade target by 2030: 100. (2) Publishing year, data was collected in the previous year 
Source: European Commission, State of the Digital Decade report 2025 

improvements  could  be  made  to  the  user-
friendliness of digital services (148). 

The  Netherlands  scores  above  the  EU 
average  in  the  availability  of  digital  public 
services for businesses, but many companies 
report that these services do not necessarily 
make administrative tasks easier (Table A7.2). 
The  availability  of  digital  public  services  to 
companies has increased slightly, remaining above 
the  EU  average.  Cross-border  service  accessibility 
for  companies  has  increased  from  73  to  78  (EU: 
73) (149). However key services, such as starting a 
business,  remain  inaccessible  online  for  cross-
border  users:  EU  residents  without  a  Dutch  eID 
cannot  apply  for  it  digitally  (150).  Despite  the  high 
online  availability,  only  62%  of  companies  report 
regular  use  of  digital  public  administration 
services  and  30%  stated  that  digital  services 
either  increase  or  do  not  reduce  the  time  and 
effort 
administrative 
services (151). 

needed 

obtain 

to 

Permitting  legislation  has  been  updated,  but 
underlying challenges remain. The Netherlands 
overhauled  its  permitting  legislation  in  2024  with 
the Omgevingswet (Environment and Planning Act) 
and  its  Digitaal  Stelsel  Omgevingswet  (Digital 
System  for  the  Environment  and  Planning  Act) 
(DSO),  which  consolidated  laws  governing  spatial 
and 
planning, 

construction, 

environment 

(148) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(149) European Commission, 2025, Digital Decade 2025: Country 

reports. 

(150) European Commission, 2026, Simplification of key life 

events. 

the 

tackling 

underlying 

the  public 

(153).  However, 

nature (152).  The  DSO  established  a  digital  end-to-
end  permitting  portal  for  authorities,  businesses 
and 
reform 
consolidated  the  legislation  and  the  digital  portal 
institutional 
without 
In  2025  only  3  out  of  28 
challenges. 
environmental 
agencies 
(Omgevingsdiensten)  in  charge  of  permitting  for 
environment regulations met minimum operational 
capacity  requirements  (154).  While  the  time  taken 
to obtain some permits was shortened from 26 to 
8  weeks,  in  practice these  gains  were  negated  by 
pre-consultations,  essentially  shifting  the  burden 
to an earlier, non-digital, phase (155).  

protection 

in 

the  DSO 

Structural  usability 
led 
issues 
municipalities  to  default  to  the  legacy  digital 
standard,  which  still  accounted  for  around  three 
quarters of publications of draft plans in the third 
quarter  of  2025,  and  use other  permit  types that 
deviate from environmental plans (BOPA) (156). The 
legacy  digital  standard  was  then  discontinued  in 
January 2026 (157). Sector-specific fast tracks have 
been introduced in parallel, for example simplified 
building  regulations  and  single-instance  appeals 

(152) Rijksoverheid, 2024, Teksten Omgevingswet bij 

inwerkingtreding. 

(153) Rijksoverheid, 2024, Digitaal Stelsel Omgevingswet (DSO). 

(154) Rijksoverheid, 2025, Kamerbrief over voortgang versterking 

VTH-stelsel april 2025. 

(155) Rijksoverheid, 2025, Eerste reflectierapport Omgevingswet 

2024 'In werking, maar onderbenut'. 

(156) Rijksoverheid, 2025, Rapportage Monitor Werking 

Omgevingswet 2024. BOPA permits allow for municipalities 
to deviate from their Environmental Plans through a different 
system than the Omgevingswet mandates. The number of 
BOPAs granted increased from 500 per quarter in early 2024 
to nearly 2000 in Q1 2025. 

(151) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(157) Rijksoverheid, Kamerbrief voortgang uitvoering 

Omgevingswet derde kwartaal 2025. 

63 

EU-272023202420252025858689828987898669726583Digital public services for citizens (0 to 100)Digital public services for businesses (0 to 100)Access to electronic health records (0 to 100)Netherlands 
 
 
 
  
 
for  housing  (158),  and  single-instance  appeals  for 
priority  projects  relating  to  the  electricity  grid 
(from  July  2026)  (159).  While  these  may  provide 
temporary  relief,  they  address  symptoms  instead 
of  tackling  the  underlying  fragmentation  across 
authorities  and  the  redesigning  processes  that 
hinder the implementation of the Omgevingswet. 

types  of documents  and data 
they  need to 
exchange through the system and explore ways to 
shift  from  the  submission  of  unstructured to 
structured data 
formats. The 
Netherlands has authority  registries connected  in 
the field of education.   

A  new  whole-of-government  approach  to 
digitalisation  was  introduced  to  strengthen 
coordination and enhance user-centricity. The 
Netherlands’  digitalisation  strategy, 
launched 
jointly  by  all  levels  of  government  (160)  in  2025, 
acknowledges  previously  identified  shortcomings. 
Responsibilities  tended  to  be  handled  in  isolation 
by  individual  administrations,  meaning  that  the 
objective of making the system more user-centric 
and  accessible  was  not  addressed  properly  (161). 
The digitalisation strategy establishes a whole-of-
government  approach  based  on  a  model  of 
‘centralised  agreement,  federated  design’.  It  is  a 
model  that  establishes  common  standards  and 
shared 
allowing 
blocks, 
administrations  to  implement  them  at  their  own 
pace.  The  strategy  places  a  strong  emphasis  on 
making administrative services more user-focused, 
accessible and seamless. 

building 

while 

Technical 

The  Netherlands has  enabled the  cross-
border  exchange  of data  and documents 
between  authorities  through  the  EU  Once-
(OOTS) 
Only 
(162). When services  (163)  become  accessible,  the 
public  and businesses  will  no  longer  have  to 
their data, download, 
search 
for 
e-
and upload documents  manually 
government  portals  in different  Member  States. 
There  is  scope  of  improvement  in identifying the 

System 

across 

(158) Rijksoverheid, 2025, Kamerbrief met kabinetsreactie op 
adviesrapport STOER and Tweede Kamer der Staten-
Generaal, 2025, Wet versterking regie volkshuisvesting. 

(159) Tweede Kamer der Staten-Generaal, 2025, Besluit 
procedurele versnellingen elektriciteitsprojecten. 

(160) The Netherlands’ Digitalisation Strategy is a joint initiative 
between the Dutch government, the Association of the 
Provinces, the Public Services Network, the Dutch Water 
Authorities and the Association of Netherlands Municipalities. 

(161) Netherlands’ Digitalisation Strategy, 2025. 

(162) European Commission, Once-Only Technical System 

Acceleratormeter, Ec.europa.eu. 

Civil service 

The  civil  service  is  making  progress  on 
levels  of 
gender  parity  and  has  high 
education and adult training. The ratio of staff 
aged 25-49 to staff aged 50-64 has increasedand 
remains above the EU average (Netherlands 1.70; 
EU 1.47) (164). The ratio has reached similar levels 
as  the  economy  as  a  whole  (1.73),  and  the 
average  age  has  decreased  across  the  public 
administration (165). The proportion of civil servants 
with  post-secondary  education  has  also increased 
and 
the  EU  average 
(Netherlands 63%; EU 55%) (166), and the economy 
as a whole (49%). The proportion of civil servants 
participating in adult learning remained stable, 16 
pps  above  the  EU  average  (Netherlands  34%;  EU 
19%) (167). Gender parity continues to improve but 
vary  considerably  between  administrations  (168). 
The  proportion  of  women  in  senior  management 
positions decreased from 47% to 45% (169). 

remains  above  both 

(164) European Commission, Eurostat, 2026, European Union 

Labour Force Survey, Employed persons by economic activity 
(NACE Rev. 2) (2008-2026). 

(165) Ministerie van Binnenlandse Zaken en Koninkrijksrelaties, 
2025, Omvang en samenstelling personeelsbestand. 

(166) European Commission, Eurostat, 2026, European Union 

Labour Force Survey, Employees by educational attainment 
level and NACE Rev. 2 activity (2008-2026). 

(167) European Commission, Eurostat, 2026, European Union 
Labour Force Survey, Participation rate of employees in 
education and training (last 4 weeks) by NACE Rev. 2 activity 
(2008-2026). 

(168) Ministerie van Binnenlandse Zaken en Koninkrijksrelaties, 
2025, Omvang en samenstelling personeelsbestand. 

(163) Procedure types under Annex II of the SDGR (2018/1724/EU) 
and directives 2005/36/EC, 2006/123/EC, 2014/24/EU and 
2014/25/EU.  

(169) European Institute for Gender Equality (EIGE), 2025, National 
administrations: top two tiers of administrators by function 
of government. 

64 

 
 
 
Integrity  

The  perception  of  corruption  when  doing 
business in the Netherlands remains low, yet the 
reported level of experienced corruption is as high 
as  the  EU  average.  Over  half  of  companies 
perceive  corruption  as  widespread  (Netherlands 
52%; EU 63%) and 57% consider that excessively 
close  ties  between  business  and  political  actors 
contribute  to  corrupt  practices  (EU:  76%).  15%  of 
businesses  consider  that  corruption  is  a  problem 
when doing business (EU: 35%) (170).  

its  efforts  on 
The  Netherlands  focuses 
the  bribery  of  government 
combating 
officials by organised crime. There is ongoing 
analysis  to 
identify  sectors  particularly 
vulnerable to corruption (171) (see also Annex 
5). At the same time, a slightly smaller proportion 
of companies than the EU average report that they 
have  been  asked  or  expected  to  offer  a  gift,  a 
favour  or  extra  money  for  permits,  services  or 
procurement (Netherlands  9%;  EU  10%).  In  terms 
of  enforcement,  less  than  half  of  companies 
believe that people and businesses caught bribing 
a  senior  official  are  appropriately  punished, 
although  this  is  significantly  higher  than  the  EU 
average (Netherlands 45%; EU 33%) (172). 

regards 

The  previous  government  announced  limited 
procedural 
the 
improvements  as 
transparency  of  lobbying.  Substantial  reform  of 
existing  rules  has  not  yet  taken  place.  The 
government  followed  up  on  a  study  by  Leiden 
University 
interest 
representation 
procedural 
improvements  such  as  simplifying  the  page  on 
which  ministers’  agendas  are  published  and 
improving  guidance  on  publication.  The  previous 
government  had  explicitly  ruled  out  a  more 
substantial  reform  of  the  existing  system  or  the 
creation  of  a  transparency  register,  as  it  believed 

transparency  of 
announced 

(173)  on 
and 

(170) European Commission, 2025, Flash Eurobarometer survey 
557 on Businesses' attitudes towards corruption in the EU. 

the  existing  measures  sufficient  (174).  The  current 
government’s  coalition  agreement  includes  an 
explicit 
such 
register (175). 

commitment 

introduce 

to 

investigation  and  prosecution  of 
The 
corruption  offences  remain  effective.  The 
government  launched  a  dedicated  programme  on 
combating  organised  crime,  which  also  looks  at 
corruption,  assessing  risks  in  public  and  private 
bodies.  The  police  introduced  a  new  monitoring 
programme  to  better  flag  cases  of  potential 
unauthorised  access  to  official  databases  by 
corrupt  civil  servants  and  police  officials.  The 
Fiscal  Information  and  Investigation  Service  has 
reassigned posts internally to increase capacity to 
investigate the bribery of foreign public officials. It 
has  been  fully  operational  since  May  2025,  but 
only  partially  addresses  concerns  about  the 
effective  enforcement  of foreign  bribery  cases  as 
further results are awaited (176). 

Justice 

The  justice  system  continues  to  perform 
efficiently. The time taken to reach a decision in 
civil and commercial cases in first-instance courts 
stood  at  124  days  in  2024  (compared  to  127  in 
2020;  no  data  are  available  for  the  intervening 
(177).  The  estimated  time  to  resolve 
years) 
administrative  cases  in  first-instance  courts  fell 
from 267 days in 2023 to 246 in 2024 (178).  

The  level  of  digitalisation  has  improved,  but 
there is room for improvement in the use of 
electronic  case  allocation.  The  Netherlands 
performs  well  in  digital  solutions  to  initiate  and 
follow  proceedings 
civil/commercial  and 
in 
administrative cases (179), and in online access for 
the  general  public  to  published  judgments  (180).  It 

(174) European Commission, 2025 Rule of Law Report. 

(175) VVD en CDA, 2026, D66, Aan de slag Bouwen aan een beter 

Nederland (Coalition agreement 2026-2030). 

(176) European Commission, 2025 Rule of Law Report. 

(171) European Commission, 2025 Rule of Law Report. 

(177)European Commission, 2025, EU Justice Scoreboard, figure 5; 

(172) European Commission, 2025, Flash Eurobarometer survey 
557 on Businesses' attitudes towards corruption in the EU. 

(173) Leiden University, 2024, A Mosaic of Interests: Towards 
better insight in the involvement of externals in public 
decision-making. 

European Commission, 2026, EU Justice Scoreboard 
(upcoming). Data collected in the CEPEJ study. 

(178) Ibid, figure 7. 

(179) Ibid, figure 45. 

(180) Ibid, figure 47. 

65 

 
 
 
also  performs  well  regarding  arrangements  for 
producing machine-readable judicial decisions (181).  

(181) Ibid, figure 48. 

66 

 
 
SUSTAINABILITY 
ANNEX 8: INDUSTRY DECARBONISATION, CIRCULARITY AND CLIMATE MITIGATION 

The  Netherlands  faces  significant  structural 
and  legal  challenges  in  meeting  its  climate 
and  environmental  objectives,  including  in 
relation  to  its  transition  to  clean  industry 
and water pollution. Addressing grid congestion 
and  excessive  nitrogen  levels  remains  crucial  for 
accelerating  emission  reductions,  but  additional 
efforts  are  also  needed  to  increase  demand  for 
low-carbon  products  and  clean  energy  sources. 
This is even more pertinent considering the recent 
‘Bonaire’  judgment,  which  highlights  the  need  to 
make  the  country's  nationally  set  climate  targets 
more  explicitly  legally  binding  through  legislation. 
While the Netherlands is on track to meet its 2030 
effort  sharing  target,  it  is  falling  short  of  its 
nationally  set  greenhouse  gas  (GHG)  reduction 
targets.  Water  pollution  from 
industry  also 
remains  a  concern,  despite  some  improvements, 
with  90%  of  the  Netherlands’  surface  water 
bodies  failing  to  achieve  good  chemical  status. 
This  annex  reviews  the  areas  in  need  of  urgent 
attention 
climate, 
in 
industry  transitions, 
environmental  and  clean 
looking at a number of different aspects. 

Netherlands’ 

the 

emitter.  Most  emissions  arise 
from  energy 
consumption  and  the  combustion  of  fossil  fuels 
for heat and power, rather than from purely  non-
industrial  processes.  This  reflects  the 
energy 
sector’s energy intensity. The chemicals, petroleum 
and  basic  metals 
industries  are  significant 
contributors  to  GHG  emissions,  with  a  relatively 
small  number  of  installations  accounting  for  the 
majority  of  emissions (184).  In  recent  years,  the 
Netherlands has made progress in reducing its per 
capita  manufacturing  emissions,  achieving  a 
decrease  of  approximately  40%  between  2019 
and  2023 
(compared  with  an  EU  average 
reduction  of  approximately  22%).  However,  at 
1.64 tonnes  of  CO2eq,  its  per  capita  emissions 
remain  above  the  EU  average  of  1.29 tonnes  of 
CO2eq (185). Although there has also been progress 
in reducing energy-related GHG emission intensity, 
a  substantial  shift  towards  clean  energy  sources 
has  not  yet  been  fully  realised,  with  the  overall 
share of renewable energy standing at 20.18% in 
2024 (186) and the share of renewables in industry 
at 11.3%. 

Policies to promote industry decarbonisation 

Industry decarbonisation 

Greenhouse gas emissions from industry 

The  industrial  sector  in  the  Netherlands  is  a 
significant  contributor  to  the  country’s  GHG 
emissions,  accounting  for  one  of  the  largest 
Industry 
shares  of 
represented  approximately  20% (183)  of 
the 
Netherlands'  total  emissions,  making  it  a  major 

total  emissions (182). 

(182) This Annex discusses the transition of Bulgaria's 

manufacturing industry, specifically its energy-intensive 
industries, to low-carbon and net-zero modes of production, 
which is key to preserving competitiveness on the path 
towards climate neutrality as mandated by the European 
Climate Law. A broader perspective on the current 
competitiveness challenges facing Bulgaria's manufacturing 
industry is provided in Annex 5. For a more detailed 
description of greenhouse gas emissions from industry, see 
European Commission (2025), 2025 Country Report - 
Bulgaria, Commission staff working document, SWD (2025) 
205 final, Brussels, 4.6.2025, Annex A7. Clean industry and 
climate mitigation. 

(183)  For more information, see EEA greenhouse gases – data 

viewer. 

The  Netherlands  has  developed  a  variety  of 
policies aimed at decarbonising its industrial 
sector,  yet  further  efforts  remain  necessary 
to  meet  decarbonisation  targets.  Key  policies 
include adopting carbon pricing mechanisms, such 
as the CO2 levy for industry, which is designed to 
complement  the  EU  emissions  trading  system  by 
setting  a  minimum  carbon  price  for  major 
industrial  emitters.  However,  the  2026-2030 
coalition  agreement  states  that  the  Netherlands 
will  scrap  the  CO2  levy (187).  The  Netherlands  has 
tailor-made 
also 
agreements with industry stakeholders to facilitate 
bespoke decarbonisation pathways. Although these 
agreements  continue  to  encounter  delays,  a 
number  have  now  been  concluded,  with  more 
negotiations  ongoing (188).  New  agreements  will 

innovative, 

developed 

(184) For more information, see Which sectors emit greenhouse 

gases? (CBS). 

(185) For more information, see ESTAT: ENV_AC_AINAH_R2. 

(186) For more information, see Annex 9. 

(187) For more information, see Aan de slag - Coalitieakkoord 

2026-2030. 

(188) The  agreements  concluded  would  lead  to  an  additional 
reduction  of  2 megatonnes  of  scope  1  CO2  emissions  and 

67 

 
 
 
 
 
 
 
 
on 

for 

action 

agenda 

public-private 

focus  on  sectors  or  areas,  rather  than  individual 
companies.  The  Netherlands  has  also  developed 
an 
industrial 
electrification (189). These policies are supported by 
public  funding  dedicated  to  fostering  innovation 
and supporting clean energy  projects, such as the 
Sustainable  Energy  Climate  Transition  Incentive 
(SDE++) (190).  The  Netherlands  also 
Scheme 
champions 
to 
accelerate  innovation  and  the  scaling  of  low-
carbon  technologies,  as  illustrated  by  the  Port  of 
Rotterdam’s  hydrogen 
initiatives  and  carbon 
capture  and  storage  projects  like  Porthos (191). 
Strategic 
energy 
infrastructure  further  boost  these  efforts.  Despite 
these  initiatives,  the  Netherlands  remains  behind 
its  nationally  set  ambitions  for 
in  achieving 
greenhouse  gas  reductions  in  industry  by  2030. 
Projections  indicate  that  current  measures  will 
likely be insufficient (192). 

partnerships 

investments 

clean 

in 

Calls for support under both national and EU 
programmes  have  provided  support 
to 
decarbonisation  efforts  in  energy-intensive 
sectors. For instance, the Netherlands participates 
actively  in  the  EU  Innovation  Fund (193),  with 
selected  projects 
large-scale  green 
including 
hydrogen  production  (e.g.  Holland  Hydrogen  I), 
carbon capture and storage in the Rotterdam and 
North Sea Port areas (e.g. the Porthos and Aramis 
projects)  and  the  electrification  of  industrial  heat. 
These  projects  contribute  to  a  first-of-a-kind 
deployment  and  to  reducing  technological  and 
investment  risks  in  hard-to-abate  sectors.  The 
SDE++ funding programme also supports projects 
in these sectors. 

The Netherlands is working with the financial 
implementing  sustainable 
sector  and 

is 

0.5 kilotonnes  of  nitrogen  emissions  by  2030.  For  more 
information 
see 
latest 
Maatwerkafspraken (NPVI). 

state 

play, 

the 

on 

of 

to 

support 

(Klimaatcommitment) (194), 

finance  policies 
industrial 
decarbonisation.  In  2019,  the  Dutch  financial 
launched  the  financial  sector  climate 
sector 
commitment 
a 
voluntary initiative in which participants pledge to 
measure  and  report  financed  emissions,  submit 
climate  action  plans  and  finance  the  energy 
transition.  Despite  being  voluntary,  nearly  all 
signatories  have  published  their  climate  action 
plans  and  are  actively  contributing  to  the  climate 
and  energy  transition.  The  Dutch  government 
maintains  an  active  collaborative  and  monitoring 
the 
role.  While 
institutional  portfolios  of  institutions  that  have 
signed up to the commitment has fallen, the real-
world  impact  has  been  mixed (195).  In  response  to 
the  Omnibus  package  on  sustainability  (196),  the 
Netherlands  is  currently  updating  its  Corporate 
Sustainability  Reporting  Directive  Implementation 
Act 
richtlijn 
duurzaamheidsrapportering) (197). 

the  emission 

implementatie 

intensity  of 

(Wet 

The  Netherlands  promotes  demand  for 
climate-friendly  products  through  a  mix  of 
regulatory  frameworks  and  market-based 
initiatives.  Central  to  this  approach 
is  the 
country’s  sustainable  public  procurement  policy 
and  its  commitment  to  achieving  a  fully  circular 
economy by 2050 (198). To achieve these goals, the 
government 
rigorous  climate  and 
environmental  criteria  into  public  tenders,  using 
standardised tools such as the MVI-criteriatool (199) 
and  the  CO2  Performance  Ladder (200).  However, 
despite  these  robust  frameworks,  the  transition 
remains challenging. This is partly because there is 
insufficient  demand  for  low-carbon  or  circular 
industrial  products (201)  for  significant  market 

integrates 

(194) For more information on the initiative, see 
Klimaatcommitment Financiele Sector. 

(189) For more information, see Actieagenda Elektrificatie 

(195) For more information, see the annual progress reports. 

Industrie. 

(190) The new government intends to increase the overall level of 
SDE++ subsidies. For more information on SDE++, see 
SDE++: Features. 

(191) For more information on Porthos, see Porthos: CO2-transport 

en -opslag onder de Noordzee. 

(192) For the latest projections, see Klimaat- en Energieverkenning 

2025. 

(193) Overview of innovation projects supported in the Netherlands 

(August 2025). 

(196) https://finance.ec.europa.eu/news/omnibus-package-2025-

04-01_en.  

(197) For the latest status of the law, see Wet implementatie 

richtlijn duurzaamheidsrapportering. 

(198) For more information on this goal, see Circulaire economie in 

2050. 

(199) Ambitieniveau bepalen MVI-criteriatool. 

(200) CO2-Presetatieladder. 

(201) See for instance this recent analysis by PBL. 

68 

 
 
 
uptake and there is a lack of clarity on post-2030 
policies and measures (202). 

Despite  the  Netherlands’  expanding  and 
comprehensive  policy  toolkit  for  the  clean 
industrial transition, challenges remain. A key 
constraint  is  severe  grid  congestion (203),  which 
hampers  business  expansion  and  decarbonisation 
projects. This is exacerbated by the nitrogen crisis 
(stikstofproblematiek),  which  makes  it  difficult  to 
obtain construction permits, including for industrial 
decarbonisation  projects (204).  Other  constraints 
limited  availability  of  renewable 
include  the 
hydrogen at scale and financing gaps for first-of-
a-kind projects, despite the SDE++ scheme and EU 
funding, 
the  Recovery  and 
from 
Resilience Facility. Uncertainty regarding long-term 
electricity and clean energy prices, the pace of the 
roll-out  of  the  national  hydrogen  backbone  and 
future  demand  for  low-carbon  products  continues 
to  weigh  on  investment  in  net-zero  industries. 
Concerns  about  international  competitiveness  and 
carbon  leakage  risks  persist  in  energy-intensive 
sectors. 
industrial 
decarbonisation  measures  remain  at  an  early 
stage of deployment. Implementation will need to 
pick  up  pace  in  the  second  half  of  the  decade  to 
meet  the  nationally  set  target  for  GHG  emission 
reductions in industry by 2030. 

Consequently, 

including 

many 

Economy wide GHG reduction 

legal  challenges  to 
The  structural  and 
achieving  climate  neutrality  and  the  interim 
2030  GHG  reduction  targets  have  increased 
as  a  result  of  the  ‘Bonaire’  judgment  and 
persistent domestic emission gaps. In January 
2026,  The  Hague  District  Court  ruled  that  the 
absence  of  effective  climate  adaptation  and 
Caribbean 
mitigation  measures 
Netherlands  violates  fundamental  human  rights, 
making  it  necessary  to  implement  equivalent 
protection  across  all  Dutch  territories (205).  This 
landmark ruling could create immediate fiscal and 
legislative  pressure  to  finalise  a  comprehensive 
climate  adaptation  plan  for  Bonaire  by  2030.  It 

the 

for 

(202) See Klimaat- en Energieverkenning 2025 | Planbureau voor 

de Leefomgeving. 

(203) See also Annex 9. 

(204) See also Annex 10. 

(205) For more information, see this Uitspraken - 

ECLI:NL:RBDHA:2026:1344. 

69 

also  highlights 
the  country’s 
the  need  for 
nationally  set  climate  targets  to  be  made  more 
explicitly  legally  binding  through  legislation.  The 
2025  Climate  and  Energy  Outlook  (KEV  2025) 
confirmed that the Netherlands is currently not on 
track  to  meet  its  nationally  set  economy-wide 
55% GHG emission reduction target or its sectoral 
targets  for  industry  and  agriculture (206).  Meeting 
those targets  would  require  efforts  to  be  stepped 
up  to  implement  policies  and  measures  including, 
but  not  limited  to,  electricity  grid  expansion  and 
nitrogen reduction. While the Dutch government is 
appealing the Hague District Court’s ruling (207), the 
‘provisionally  enforceable’  status  (uitvoerbaar  bij 
voorraad)  ensures 
remains 
mandatory  during  the  appeal  procedure,  unless  a 
suspension is granted. 

that  compliance 

Reduction of effort sharing emissions 

Compliance  with  effort  sharing  limits  with 
domestic measures 

For  2030,  the  Netherlands’  effort  sharing 
emissions  are  projected  to  be  above  its 
target,  but  it  could  cover  the  gap  with 
unused  emission  allocations  from  previous 
years (208).  In  2024,  GHG  emissions  from  the 
Netherlands’ effort sharing sectors are expected to 
have  been  36%  below  those  of  2005.  By  2030, 
current  and  planned  policies  and  measures  are 
expected to lead to a decrease of 46.7%, leaving a 
gap of 1.3 percentage points to the 2030 target of 
48%.  The  Netherlands  could  bridge  this  gap  with 

(206) See KEV 2025. 

(207) For more information, see Kamerbrief over hoger beroep in 

Klimaatzaak Greenpeace Bonaire.  

(208) The  national  GHG  emission  reduction  target  is  set  out  in 
Regulation (EU) 2018/842 (the Effort Sharing Regulation). It 
applies  jointly  to  buildings  (heating  and  cooling),  road 
transport,  agriculture,  waste  and  small  industry  (known  as 
the effort sharing sectors). The emissions from effort sharing 
sectors for 2024 are based on approximated inventory data. 
The  final  data  will  be  established 
in  2027  after  a 
comprehensive  review.  Projections  about  the  impact  of 
current  policies 
(‘with  existing  measures’,  WEM)  and 
additional  policies (‘with  additional  measures’,  WAM)  as  per 
the  Netherlands’  2025 
reporting  under  Article  17  of 
Regulation  (EU)  2018/1999  (the  Governance  Regulation). 
Also  see  European  Commission  (2025),  Climate  Action 
Progress  Report  2025  –  Technical  Information,  Commission 
staff working document, Brussels, Chapter 9 (pp. 111ff.), and 
in particular Tables 25 and 26. 

 
 
 
unused annual emission allocations from previous 
years.  Swift  and  steady  implementation  of  the 
additional measures will remain crucial to progress 
towards  climate  neutrality.  While  many  of  the 
policies  and  measures  outlined 
in  the  final 
updated  Dutch  energy  and  climate  plan  remain 
relevant, several have been adjusted to align with 
new  government  plans;  a 
recent  national 
assessment  of  these  measures  confirms  that,  in 
cumulative  terms,  the  Netherlands  would  remain 
under  the  limits  provided  for  by  its  annual 
emission  allocations (209).  Since  this  analysis,  the 
Netherlands has introduced additional policies that 
could  further  reduce  emissions  covered  by  the 
Effort  Sharing  Regulation,  such  as  cancelling  the 
reduced  tariff  for  diesel  used  in  agricultural 
vehicles  and  implementing  measures  to  increase 
sustainable mobility.  

Sustainable transport 

The  Netherlands  remains  a  front  runner  in 
the transition to sustainable mobility, with a 
dense  charging  network  and  a  mature 
market  for  zero-emission  vehicles.  Road 
transport  is  the  largest  sector  in  terms  of  GHG 
emissions  under  the  Effort  Sharing  Regulation, 
together  with  energy  use 
in  buildings,  both 
accounting  for  around  30%  of  the  effort  sharing 
emissions  in  the  Netherlands (210).  Road  transport 
emissions in 2024 were 7% lower than in 2023. In 
February  2026,  the  market  share  of  battery 
electric  vehicles  in  new  passenger  car  sales 
reached  28%,  among  the  highest  in  the  EU (211). 
Electric  vehicles  are  supported  by  the  continued 
roll-out  of  alternative  fuels  infrastructure.  The 
Netherlands  already  has  more  than  202 000 
electric  charging  stations,  of  which  more  than 
6 600 are fast charging stations (212). The second-
hand market for electric vehicles is expanding, but 
a  persistent  mismatch  remains  between  the 
supply of ex-lease luxury vehicles and the demand 
for  more  affordable,  compact  models.  To  sustain 
the transition, the policy focus has recently shifted 

(209)For an assessment of the policies adopted as at 1 January 
2025 and proposed/additional policies as at 1 May 2025, 
see Klimaat- en Energieverkenning 2025 | Planbureau voor 
de Leefomgeving. 

(210) See Graph A8.1, and Table A8.1 at the end of this Annex. 

(211) For more information, see Stand van zaken elektrisch vervoer 

en laadpunten (2026).  

(212) For more information, see Laad- en tankinfrastructuur in 

Nederland.  

towards tax-based incentives and the expansion of 
zero-emission zones in over 30 cities, which began 
enforcing stricter access requirements for delivery 
vans and trucks in early 2025. 

Graph A8.1: Greenhouse gas emissions in the 
effort sharing sectors, 2005, 2023, and 2024 

Source: European Environment Agency. 

on 

centred 

to  promote  modal  shifts  are 
Efforts 
increasingly 
addressing 
congestion on the rail and road networks. The 
road and rail networks are operating close to their 
physical  limits,  and  minor  technical  failures  often 
trigger  system-wide  delays.  The  Netherlands  has 
the  highest  bicycle  use  in  the  EU  (213).  Active 
mobility 
(i.e.  cycling  and  walking  combined) 
accounts for about 50% of all trips (214). However, 
this  success  in  sustainable  urban  transit  cannot 
infrastructure  hurdles  facing 
fully  offset  the 
in  the  national 
heavier  transport.  Congestion 
electricity grid has become a critical bottleneck for 
the further electrification of heavy-duty trucks and 
public bus fleets. 

The  Netherlands,  home  to  one  of  the  most 
important  European  aviation  hubs 
(i.e. 
Amsterdam  Schiphol  airport),  hosts  two 
operational  sustainable  aviation  fuel  (SAF) 
facilities.  It  also  has  a  long  list  of  synthetic 
sustainable  aviation  fuel  (eSAF)  projects  in  the 
pipeline. Planned State aid for these projects could 
amount to EUR 300 million (215). 

Decarbonisation of fisheries 

(213) Cycling facts 2023.  

(214) Fietsen en lopen: de smeerolie van onze mobiliteit (2015).  

(215) For more information, see this ReFuelEU Aviation Annual 

Technical Report 2025.  

70 

020406080100120140200520232024MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
  
 
The  Dutch  fishing  fleet  is  among  the  higher 
emitting fleets in the EU in terms of total CO2 
equivalents,  amounting  to  an  average  of  479 
thousand 
tonnes  CO₂eq  between  2018  and 
2022 (216),  and  120.6  million  litres  of  marine  fuel 
consumed  in  2023.  In  view  of  climate  change 
mitigation,  both  the  fisheries  and  aquaculture 
sectors  face  the  dual  challenge  of  moving  away 
from  fossil  fuels  and  increasing  energy  efficiency 
to  enhance  sector  resilience.  This  requires  a 
comprehensive  energy  transition  strategy  that 
incorporates 
sources, 
technological  innovation,  adequate  infrastructure 
and  access  to  energy  sources,  and  improved 
energy practices across the sector's operations. 

renewable 

energy 

Sustainable industry  

Circular economy industry 

to 

economic 

instruments 

The  Netherlands  is  one  of  the  EU’s  top 
performers  in  the  circular  economy,  notably 
in  resource  productivity,  secondary  material 
use and waste management and is not at risk 
of  missing  municipal  and  packaging  waste 
targets.  Further  progress  could  be  achieved 
through 
reduce 
incineration  of  recyclable  waste  and  incentivise 
reuse and recycling (217). The circular material use 
rate  reached  32.7%  in  2024  (EU:  12.2%),  the 
highest in the  EU  (218),  while  resource  productivity 
stood  at  EUR  8.17/kg  (EU:  EUR  3/kg).  Over  five 
years, resource productivity increased by 72% (219). 
and material consumption decreased by 12% (220)  
However,  the  circular  economy  sector  remains 
small, accounting for around 1.1% of employment 
(110  000  FTEs),  below  the  EU  average  of  2% 
(221).   Municipal  waste  generation  declined  to  473 

(216) Study on greenhouse gas emission (GHG) reduction costs, 

scenarios and pathways for EU fisheries to achieve net zero 
by 2050 - Publications Office of the EU. 

(217) European Commission, Environmental Implementation 
Review (2025), Netherlands country report, p. 2. 

(218) Eurostat, Circular Material Use rate. 

(219) Eurostat, ‘Resource productivity’, last updated on 4 July 

2025, accessed on 13 January 2026. 

(220) Eurostat, Material footprints.  

domestic 

increased 

kg  per  capita  in  2024  (EU:  517  kg)  (222).  The 
recycling  rate  reached  58%  (EU:  48.1%),  while 
landfilling is limited to 1.5%. Nevertheless, 40.6% 
of waste is still incinerated (EU: 26.1%), indicating 
scope  to  further  shift  waste  towards  reuse  and 
recycling.  Incineration  volumes  have  remained 
broadly  stable,  with  a  decline  in  imported  waste 
(from ~25% in 2016 to 16% in 2022) partly offset 
(223). 
by 
Incinerated  waste  consists  mainly  of  organic 
matter,  plastics,  construction  waste,  paper  and 
sorting  residues  (224).  At  the  same  time,  material 
import dependency remains very high at 82.7% in 
increased  since 
2023 
2011 (225),  highlighting  continued 
reliance  on 
external  resources.  Performance  is  particularly 
strong  in  specific  streams:  100%  of  construction 
and  demolition  waste  is  recovered  (EU:  89%) (226) 
and  plastic  packaging  recycling  reached  49.1%  in 
2023 (EU: 42%) (227). 

(EU:  22%)  and  has 

incineration 

The  Netherlands  also  stands  out  as  a  good 
performer in patents related to recycling and 
secondary raw materials. In 2019, it filed 24.6 
patents (1.42 per million inhabitants). In 2021, this 
number  increased  to  29.68  (or  1.69  per  million 
inhabitants),  far  above  the  EU  average  (0.73  per 
million  inhabitants) (228).  The  Eco-Innovation  Index 
score  also  reflects  this  trend,  indicating  above-
average 
environmentally 
sustainable innovation (133.1 vs an EU average of 
127.5 in 2024). 

performance 

in 

The  GHG  emission 
intensity  of  energy 
consumption  is  slightly  higher  than  the  EU 
average  (91.1  vs  82.8,  based  on  2018-2020 

(222) Eurostat, Municipal waste by waste management operations. 

(223) PBL, Integrated Circular Economy Report 2025. 

(224) Rijkswaterstaat 2023.  

(225) ETC-CE Report 2024, Netherlands_2024 CE Country 

profile_Final.pdf, p. 7. 

(226) Techno-economic and environmental assessment of CDW 

management, JRC, 2024. 

(227)Eurostat, Packaging waste by waste management 

operations, last updated on 17 October 2025, accessed on 
16 January 2026. 

(228)Eurostat, Patents related to recycling and secondary raw 

(221) Eurostat, Persons employed in circular economy sectors, last 
updated on 21 March 2025, accessed on 16 January 2026. 

materials, last updated on 25 November 2025, accessed on 
16 January 2026. 

71 

 
 
 
data), which shows that the Dutch energy mix still 
relies more heavily on fossil fuels (229). 

The  Netherlands’  circular  strategic  objective 
since  2016  remains  the  same:  to  achieve  a 
50%  reduction  in  the  use  of  primary  raw 
materials by 2030. In 2023, the Netherlands put 
in place the 2023-2030 national circular economy 
programme (230), following up on the broader 2016 
programme  on  a  fully  circular  economy  by 
2050 (231).  To  achieve  the  ambitious  objectives 
from 
programme 
introduced  measures  to  improve  the  economy  of 
raw  materials,  with  a  focus  on  reducing  and 
substituting  raw  materials,  extending  product 
lifetimes,  high-grade  processing  and  circular 
design.  Dedicated  initiatives  have  been  developed 
for  the  more  impactful  product  groups,  namely 
some  consumer  goods,  plastics,  construction 
products and certain manufacturing practices. 

2023-2030 

2016, 

the 

The new update of the 2025 national circular 
economy  programme  (NPCE  2025) (232)  aims 
to reduce raw material consumption by 15% 
by  2035  compared  with  2016  levels.  The 
programme  sets  targets  of  82%  for  waste 
recycling  and  55%  for  the  use  of  recycled  or 
sustainable  materials.  However,  the  update  has 
drawn  criticism  for  its  lack  of  concrete  measures 
and  insufficient  funding.  In  addition,  there  is  a 
significant  gap  between,  on  the  one  hand,  the 
ambition  and  perceived  need  to  move  towards  a 
circular  economy  and,  on  the  other  hand,  the 
resources  deployed  under  the  NPCE  2025  to 
achieve this (233). 

responsibility 

(EPR) 
Extended  producer 
schemes  are  well  developed 
the 
Netherlands.  A  statutory  EPR  already  applies  to 
the  following  product  groups:  cars,  car  tyres, 
packaging,  batteries  and  accumulators,  electrical 

in 

(229) European Commission, European Innovation Scoreboard 

2025, The Netherlands, p. 7. 

(230) Ministry of Infrastructure and Water Management, National 

Circular Economy Programme 2023-2030.  

(231) Ministry of Infrastructure and Water Management, National 

Agreement on the Circular Economy, 2016.  

(232) Ministry of Infrastructure and Water Management, National 

Circular Economy Programme 2025. 

(233) PBL, Netherlands Environmental Assessment Agency, 

14 October 2025, Reflection on the update of the National 
Circular Economy Programme, p. 3. 

for 

for  developing  EPRs 

and  electronic  equipment,  packaging  from  the 
office,  shops  and  services  sector,  disposable 
plastics,  and  textiles.  EPRs  for  nappies  and 
incontinence  materials  are  being  developed.  The 
scope 
furniture, 
agricultural  film  and  floor  coverings  is  also  being 
explored. For a number of waste  flows, producers 
have  set  up  producer  responsibility  themselves, 
without  a  statutory  EPR,  and  that  producer 
responsibility  has  been  declared  universally 
binding (234).  Under  the  updated  2025  national 
circular  economy  programme (235),  a  process  is 
under  way  to  improve the  EPR  system.  It is to  be 
modernised  and  extended  to  include  repair  and 
reuse.  Points  for  improvement  include:  (i)  clearer 
responsibilities  for  producers,  municipalities  and 
EPRs; 
other 
(ii) requirements  for  producer  organisations;  and 
(iii) improved enforceability for all parties involved 
in  EPRs  by  supervisory  bodies  and  environmental 
services.  In  terms  of  the  separate  collection  of 
waste  electric  and  electronic  equipment  (WEEE), 
the Netherlands is above the EU’s 2019 target of 
65%,  with  a  collection  rate  of  80.5%  in  2023, 
compared  with  72.6%  in  2022.  In  2024,  an 
infringement case was opened by the Commission, 
as  the  Netherlands  did  not  achieve  the  agreed 
collection  recycling  rate  for  WEEE 
in  2021 
(INFR(2024)2125).  In  November  2025,  a  new 
infringement  case  (2025/0349)  was  initiated  for 
late  transposition  of  the  revised  WEEE  Directive 
(Directive 
reply  was 
satisfactory, indicating that transposing legislation 
would be adopted in May 2026. 

2024/884/EU). 

stakeholders 

involved 

The 

in 

is 

than 

lower 

in  previous 

The  total  amount  of  household  waste  has 
decreased,  while  the  recycling  rate  has 
remained relatively stable. The total amount of 
household  waste  in  2022  was  8.0 megatonnes, 
years: 
which 
9.0 megatonnes  in  2020  and  8.3 megatonnes  in 
2016  (Rijkswaterstaat  2024b).  This  equates  to 
around  457 kg  of  waste  per  person  in  2022, 
compared  with  519 kg  in  2020  and  489 kg  in 
2016.  For  household  waste,  a  recycling  rate  of 
53%  was  achieved  in  2022,  which  is  a  slight 
decrease  from  54%  in  2020,  but  slightly  higher 
than  51%  in  2016.  These  are  the  waste  streams 
that  are  actually  recycled and  not  what  has  been 

(234) Ministry of Infrastructure and Water Management, National 

Circular Economy Programme 2023-2030, p. 43. 

(235) Ministry of Infrastructure and Water Management, National 

Circular Economy Programme 2025, p. 30. 

72 

 
 
 
collected and sorted, bearing in mind that streams 
are  still  lost  after  sorting.  In  the  production  of 
pictorial  plastic 
there  are  often 
recyclates, 
unusable  fractions  left  over,  and  much  of  the 
sorted  plastic  waste 
too 
contaminated for recycling, which means that it is 
still incinerated. 

to  be 

found 

is 

tools 

The Netherlands remains highly dependent on 
imports  of  critical  raw  materials,  with  rising 
supply  risks  for  key  industrial  sectors  (see  also 
Annex 5 on Industry for further details on strategic 
dependencies and trade flows). Supply risks for the 
most  critical  raw  materials  used  in  industrial 
sectors that are important for the Dutch economy, 
such  as  manufacturing,  have  increased  over  the 
past  decade (236).  The  Netherlands’ 
to 
encourage 
remain 
practices 
circular 
underexploited.  The  Netherlands  has  a  tax  on 
landfill disposal and incineration of municipal solid 
in 
It  amounted 
waste. 
2025 (237).  However, 
could 
consider updating the rates to maintain incentives 
for  recycling  and  waste  prevention  as  the  market 
evolves.  The  current  waste  tax  rate  is  well  below 
the  benchmark  recommended  by  Hogg  et  al. 
(EUR 50 per tonne) (238). In addition, at the request 
of  the  Ministry  of  Finance,  the  Ecorys/CE  Delft 
consortium  evaluated  the  waste  tax  in  October 
2024  and  one  of  its  conclusions  was  that  the 
exemption  for  the  incineration  of  sewage  sludge 
should  be  removed (239). 
In  addition  to  the 
environmental  advantages,  increasing  the  landfill 
tax  and  waste  incineration  tax  would  increase 
revenues  by  EUR 33 million  and  EUR 696 million, 
respectively, from current level by 2030 (240). 

to  EUR 39.70/tonne 
the  Netherlands 

Bioeconomy industry 

In  the  Netherlands,  bioeconomy  value  added 
grew by 6.5% on average between 2018 and 
2023,  driven  in  particular  by  the  food  and 
beverages  and  wood  products  and  furniture 

(236) PBL, Integrated Circular Economy Report 2025, p. 15. 

(237) https://ce.nl/publicaties/evaluatie-afvalstoffenbelasting/. 

(238) European Commission, Greening the European Semester – 
Resource and Pollution Taxes (2025), Annex 6, Netherlands 
(p. 299). 

subsectors.  The  food  and  beverages  subsector 
registered  the  highest  growth  in  value  added 
(6.4% 
and 
2023) (241)(242). 

between 

average 

2018 

on 

Overall  bioeconomy  employment  has  shown 
limited  growth.  However,  of  the  bioeconomy 
subsectors  of  interest,  food  and  beverages,  wood 
products  and  furniture,  and  bio-based  chemicals 
and  plastics  all  recorded  higher  than  average 
employment  growth (243).  In  particular,  the  bio-
based chemicals and plastics subsector registered 
the  highest  growth  in  total  employment  between 
2018 and 2023 (2.8% on average). 

Labour  productivity  in  the  bioeconomy  – 
measured  as value  added  per person  employed  – 
stood at 121.6% of the national average and has 
grown from 107.8% in 2018 (244). 

R&D business expenditure from bioeconomy-
relevant  subsectors  has  grown  in  line  with 
overall  R&D  business  expenditure 
the 
Netherlands  (7.1%  compared  with  an  average  of 
7.2% between 2018 and 2023) (245). 

in 

Zero-pollution industry 

Air  quality  in  the  Netherlands  is  generally 
good,  with  some  exceptions.  The 
latest 
available  annual  estimates  for  2023  attribute 
3 847  deaths  each  year  (or  39 747  years  of  life 
lost  (YLL))  to  fine  particulate  matter  (PM2.5), 
1 074  deaths  each  year  (or  11 103 YLL)  to  NO2 
and  1 795  deaths  each  year  (or  18 639 YLL)  to 
ozone. All indicators for each parameter had fallen 
in comparison with 2022 (246). Emissions of several 
air  pollutants  have  decreased  significantly  since 
2005, while GDP growth has continued. According 
inventories  submitted  under  the  National 
to 
Emission Reduction Commitments Directive (NECD) 

(241) Bioeconomy subsectors: food and beverages; bio-based 

textiles; wood products and furniture; bio-based chemicals 
and plastics. 

(242)Joint Research Centre, Developments of Economic Growth 
and Employment in Bioeconomy Sectors across the EU.  
(243) Joint Research Centre, Developments of Economic Growth 
and Employment in Bioeconomy Sectors across the EU.  

(244) Ibid. 

(239) Evaluatie afvalstoffenbelasting - CE Delft. 

(245) Joint Research Centre, Business expenditure in Research and 

(240) European Commission, Greening the European Semester – 
Resource and Pollution Taxes (2025), Annex 6, Netherlands 
(p. 300). 

Development (R&D) in the EU bioeconomy. 

(246) EEA, 2025, Harm to human health from air pollution in 

Europe: burden of disease status, 2025, Link. 

73 

 
 
 
for  2020–2029 

its  emission 
in  2024,  the  Netherlands  met 
for 
reduction  commitments 
nitrogen  oxides 
(NOx),  non-methane  volatile 
organic compounds (NMVOC), sulfur dioxide (SO₂), 
ammonia  (NH₃)  and  PM2.5,  and  is  projected  to 
meet  its  commitments  for  2030  onwards.  In 
addition, limit values under the Ambient Air Quality 
Directive  (AAQD)  were  not  exceeded  in  2023(247). 
However,  these  positive  trends  at  national  level 
contrast  with  persistent  challenges  related  to 
nitrogen  deposition,  which  continues  to  exceed 
critical  loads  in  many  sensitive  ecosystems  and 
remains a key driver of biodiversity loss.  

In  2022,  the  Netherlands  incurred  damage 
costs  from  concentrations  above  air  quality 
standards. Annual damage costs are estimated at 
EUR 16.3 million  per  year (248).  This  underscores 
the potential benefit of further action, particularly 
in industrial regions and urban transport corridors. 
The solution to air pollution can be found through 
a 
(i) sustainable 
transport,  energy  and  agricultural  policies  to 
reduce  emissions  of  air  pollutants;  (ii) targeted 
urban  and  land-use  planning  policies;  and  (iii) 
specific  fiscal  actions  (removing  environmentally 
harmful 
targeted 
environmental taxation). 

combination  of  measures: 

subsidies  and 

increasing 

of 

persistent, 

ubiquitous, 

of  the  Netherlands’  surface  water  bodies  is  still 
failing to achieve good chemical status due to the 
presence 
bio-
accumulative  and  toxic  substances  (uPBTs) (251) 
that  result  from  industrial  activities  (e.g.  PFAS). 
The  Netherlands  has  the  9th  highest  level  of 
emissions of heavy metals to water and is in 12th 
place for emission intensity (slightly below the EU 
average  intensity  of  0.864 kg/EUR 1 billion  GVA). 
(see also Annex 10 on Decarbonisation for further 
details  on  the  chemical  status  of  water  bodies). 
The  total  economic  cost  of  industrial  pollution  in 
Netherlands was just over EUR 16 billion in 2021, 
encompassing 
lost 
productivity 
environmental 
degradation (252)(253).  Yet,  investment  still  falls 
short.  To  meet  national  and  EU  targets  for 
pollution  prevention  and  control,  the  Netherlands 
would  need  to  spend  an  additional  EUR 2.3 billion 
per year (about 0.25% of GDP), largely focused on 
improving  air  quality  –  particularly  in  industrial 
regions and urban transport corridors (254). 

healthcare 
and 

expenses, 

Water pollution from industry also remains a 
critical  challenge,  imposing  direct  and  indirect 
(249).  The 
costs  of  EUR 89 million  annually 
Netherlands had a high level of pollutant releases 
into water in 2022, with 0.82 kg/EUR 1 billion GVA, 
weighted  by  human  toxicity  factors  (2022  EU 
average:  0.86).  Nevertheless,  between  2010  and 
2023,  there  was  a  35%  reduction  in  industrial 
heavy  metal  releases  (cadmium,  mercury,  nickel 
and  lead),  a  27%  drop  in  total  organic  carbon 
total 
emissions  and  a  26% 
phosphorus  emissions  as  reported  under  the 
Industrial  Emissions  Directive (250).  However,  90% 

reduction 

in 

(247) Directive 2008/50/EU of the European Parliament and of the 
Council of 21 May 2008 on ambient air quality and cleaner 
air for Europe (OJ L 152, 11.6.2008, p. 1).  

(248) EEA, The costs to health and the environment from industrial 
air pollution in Europe – 2024 update. The costs reported are 
calculated in terms of value of a statistical life (VSL). 

(249) European Commission: Directorate-General for Environment, 
IEEP, Green taxation and other economic instruments – 
Internalising environmental costs to make the polluter pay 
(p. 35, Table 5), 2021.   

(251) European Commission, Third River Basin Management Plans 
Second Flood Hazard and Risk Maps and Second Flood Risk 
Management Plans Member State: Netherlands, 2025.  

(252) European Commission: Directorate-General for Environment, 
Camboni, M., Markandya, A., Tyrer, D., Goonesekera, S. et 
al., Greening the European Semester – Resource and 
pollution taxes. Annex 6, Country factsheets, Publications 
Office of the European Union, 2026.  

(253) EEA, The costs to health and the environment from industrial 
air pollution in Europe – 2024 update. The costs reported are 
calculated in terms of value of a statistical life (VSL). 

(250) EEA, Water pollutant releases changes from 2010 to 2022 

for the EU Member States, 2024.   

(254) European Commission, Environmental Implementation 

Review (2025), Netherlands country report.  

74 

 
 
 
 
 
 
 
 
Table A8.1:  Key clean industry and climate mitigation indicators: The Netherlands 

Sources and notes: Industry decarbonisation: All data are from Eurostat; data following the UNFCCC Common Reporting 
Format (CRF) are from the European Environment Agency (EEA), republished by Eurostat. (1) Sectors covered: all divisions of 
section C - Manufacturing - of the NACE Rev. 2 statistical classification of economic activities, except C19 (manufacture of coke 
and refined petroleum products). (2) GHG emissions as per UNFCCC Common Reporting Framework (CRF) categories 1.A.2 - fuel 
combustion in manufacturing in industries and construction (that broadly correspond to the broadly correspond to the NACE 
sections C - Manufacturing and E - Construction, excluding C-19),  and CRF2 - industrial processes and product use. The figures 
shows the emissions in the 1.A.2 category as a share of the sum of CRF1.A.2. and CRF2 emissions. (3) Sectors covered: CRF 1.A.2 
as described above. Gross value added (GVA) data in the denominator aligned in sectoral coverage, in 2020 prices. (4) Sectors 
covered: NACE section C excluding C19. (5) Nominator: NACE divisions C17, 20, 23, 24; denominator: NACE section C excluding 
C19 (see above). (6) GVA (denominator) in 2020 prices. Reduction of effort sharing emissions: Data source: European 
Environment Agency, greenhouse gas data viewer; European Commission, Climate Action Progress Report, 2025. For details, see 
the footnote in the "Reduction of effort sharing emissions" section. Sustainable road transport: (7) Source: Eurostat; (8) Source: 
European Alternative Fuels Observatory; (9) Source: Eurostat. For all climate mitigation indicators, the trend arrows compare the 
latest available data (year t) with the data four years earlier (t-4). Sustainable industry: Bioeconomy value added, employment 
and productivity: JRC, Developments of Economic Growth and Employment in Bioeconomy Sectors across the EU. Bioeconomy 
R&D business expenditure: JRC, Business expenditure in Research and Development (R&D) in the EU bioeconomy. Damage cost for 
industrial pollution: EEA, The costs to health and the environment from industrial air pollution in Europe, 2024. Water industrial 
pollutants releases: EEA, Industrial releases of pollutants to water and economic activity in the EU-27, 2024. Water chemical 
status: WISE, Surface water bodies: Chemical status, 2024 and WISE Groundwater bodies: chemical status, 2024. Other indicators: 
Eurostat. For circular economy indicators, the trend arrows compare the latest available data (year t) with the data two years 
earlier (t-2). 

75 

Climate mitigationTrendIndustry decarbonisation201820192020202120222023202420182023GHG emissions intensity of manufacturing production, g/€ (1)428407417375320298319330-Share of energy-related emissions in industrial GHG emissions (2)54.255.655.557.357.356.7-55.557.9Energy-related GHG emissions intensity of manufacturing and construction, g/€ (3)237.0232.5235.9216.2183.8174.1-203.9163.0Share of electricity and renewables in final energy consumption in manufacturing, % (4)24.324.524.424.225.325.124.342.843.9Energy intensity of manufacturing, GWh/€ (4)1.721.661.691.521.331.281.371.271.05Share of energy-intensive industries in manufacturing production, % in GVA (5)21.0818.7517.0618.4315.3112.9612.93--GHG emissions intensity of production in sector [...], g/€ (6)- paper and paper products (NACE C17) 326          278          248                 321            276                  249           287             722             619            - chemicals and chemical products (NACE C20) 2 059       2 218       2 476              2 125         1 907               2 248        2 350          --- other non-metallic mineral products (NACE C23) 798          660          631                 618            557                  590           546             2 495          2 352         - basic metals (NACE C24) 3 786       3 886       3 725              3 405         3 490               3 413        3 898          2 842          3 099         Reduction of effort sharing emissions201820192020202120222023202420182023GHG emission reductions relative to base year, % -27.4-33.6-34.6-36.0- domestic road transport-14.3-15.6-28.2-27.8-28.4-25.3-30.7-1.4-5.6- buildings-11.2-13.9-18.3-11.3-29.7-34.7-34.6-20.3-33.520052021202220232024TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %128.193.185.083.782.0-48.0%-44.3%-46.7%Sustainable road transport2018201920202021202220232024202520182021New zero-emission vehicles, electricity motor, % (7)5.4113.8220.5019.7523.4730.8334.641.038.96Number of publicly accessible AC/DC charging points (8)--6445784588114310144450183000202833446956n/aShare of electrified railways, % of total (9)73.1673.1673.1774.4574.4874.5574.4355.4756.49Sustainable industryTrendEU-27Circular economy transition20182019202020212022202320242018latest dataMaterial footprint, tonnes per person8.89.59.58.99.07.88.314.813.7Circular material use rate, %28.0          26.9         28.2                30.1           28.5                  32.0           32.711.612.2Resource productivity, €/kg4.6            4.8           5.1                  5.9             6.0                    7.4             8.22.13.0Employees in circular economy1.2            1.21.2                  1.2             1.1                    1.1             -2.12.0Patents in circular economy31.2324.6         18.5                29.7           12.312.0Recycling rate           55.9           56.9                  57.0             57.8                   57.6            57.9 58.0            46.4048.1Plastic recyling 52%57%49%49%46%49%-41%42%Construction and demolition waste (CDW) recovery 100-1008889Bioeconomy industry 2018201920202021202220232024CAGR 2018-202320182023Value added, million EUR32 04134 29134 58836 23343 36846 703-6.5%642 438863 436Employment, total number of people employed395 402403 197403 470407 582408 185413 291-0.7%17 649 04017 085 642ProductivityValued added per worker, thousand EUR81.085.085.788.9106.2113.0-5.7%36.450.5Valued added per worker, % of national average107.8110.1112.4108.8119.6121.6--62.270.7R&D business expenditureTotal bioeconomy (biomass producing and converting sectors)1 0841 2391 3321 5021 3941 6347.1%15 67223 335Total R&D business expenditure10 99811 84612 31413 04814 80616 711-7.2%196 587259 525Zero pollution industry201820192020202120222023202420182021Damage cost for industrial pollution18.317.516.216.3---414.9352.7Water industrial pollutants releases 2021change (2010)2021change (2010)2021change (2010)2021change (2010)7 504       -31%11 657 800     -5%16 246 300      -23%1 178 220   -19% Water chemical statusGood70                   Good (%)0.1                    Poor673.0Poor (%)90%EUTOCPhosporusNetherlandsNetherlandsCd, Hg, Ni, Pbnitrogen 
 
  
 
ANNEX 9: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  increasing 
energy  affordability,  while  advancing  the 
transition  to  net  zero, 
increasing  grid 
capacity  and  flexibility  and  accelerating  the 
deployment  of  renewable  energy  and  energy 
efficiency  (see  also  Annex  8).  It  reflects  the 
implementation  of  past  energy-related  country-
the 
specific 
Netherlands. 

recommendations 

(CSRs) 

for 

In 2025, overall, the Netherlands progressed 
in advancing decarbonisation, making efforts 
in  the  streamlining  of  permitting procedures 
and  the  deployment  of  renewable  energy 
sources. However, the country still relies on fossil 
fuels 
it 
vulnerable  to  price  spikes.  Challenges  remain  in 
enhancing  the  effective  use  of  existing  cross-
border  infrastructure  and  in  reducing  electricity 
grid  congestion  and 
flexibility 
solutions. 

for  electricity  generation,  making 

implementing 

Energy prices and costs 

In  the  first  half  of  2025,  household 
electricity prices in the Netherlands declined 
and  remained  below  the  EU  average,  at 
EUR 0.2342/kWh.  Household  gas  prices  also 
decreased  but  stayed  well  above  the  EU  average, 
at  EUR 0.1617/kWh,  the  third  highest  in  the  EU. 
Conversely,  electricity  industrial  prices  declined 
compared  to  2024  but  remained  above  the  EU 
average.  Non-household  gas  prices  stabilised  yet 
also remained above the EU average.  

Overall,  final  energy  price  signals  in  the 
Netherlands 
in  the  first  half  of  2025 
remained  unbalanced.  For  large  businesses, 
electricity was 2.7 times more expensive than gas 
in  the  first  half  of  2025  even  though  taxes  and 
levies  (excluding  VAT  and  recoverable  charging) 
accounted for 22% of electricity bills and 29% of 
gas bills. Network costs are a separate component 
of  retail  electricity  prices  and  make  up  a 
significant  share  in  the  Netherlands,  reflecting 
relatively high transmission and distribution tariffs 
compared  with  the  EU  average.  Excluding  taxes 
and  levies,  the  electricity-to-gas  price  ratio  would 
have  increased  to  3.4,  indicating  that  the  Dutch 
fiscal  measures  partly  mitigate 
the  price 
imbalance  between  electricity  and  gas.  For 

76 

household  consumers,  the  impact  of  taxes  and 
levies  on  the  electricity-to-gas  price  ratio  is  even 
more  substantial,  with  the  ratio  increasing  from 
1.4  to  3.6  once  taxes  are  excluded,  reflecting  the 
presence of negative taxes in the overall electricity 
retail  price  for  household  consumers  and  the 
significant proportion of taxes (53.9%) in the final 
gas price(255). 

electricity 

Due  to  continued  reliance  on  fossil  fuels for 
limited  non-fossil 
electricity  generation, 
interconnectivity, 
flexibility  and  declining 
the 
in 
prices 
wholesale 
Netherlands  averaged  EUR 88/MWh  in  2025, 
slightly above the EU average of EUR 85(256). 
This  reflects  the  day-ahead  wholesale  market 
price of electricity excluding taxes, network tariffs 
and retail margins. Fossil fuels accounted for over 
48%  of  the  Netherlands’  electricity  generation  in 
2025,  the  seventh-highest  share  in  the  EU,  while 
natural  gas  maintained  its  structural  role  as  the 
dominant,  and  costly,  marginal  price-setting 
technology.  Average  day-ahead  electricity  prices 
increased by 13% in 2025 amid rising natural gas 
procurement  costs  and  heightened  electricity 
demand. 

Short-run  marginal  costs (257)  of  natural  gas 
in  the  EU  increased  from  EUR 96/MWh  in 
2024  to  nearly  EUR 103/MWh 
in  2025. 
Although  daytime  prices  have  fallen  in  recent 
years  owing  to  the  growing  penetration  of  solar 
power,  the  Netherlands  remains  vulnerable  to 
severe  price  spikes  during  peak-demand  hours. 
This is because falling solar output in the evening 
and  early  morning,  combined  with  limited  non-
fossil flexibility, have led to a significant ramp-up 
of gas-fuelled plants to cover the supply–demand 
gap.  As  a  result,  price  spreads (258) 
in  the 
Netherlands  averaged  EUR 118/MWh  in  2025,  up 
4% from 2024. 

(255) Analysis based on Eurostat data from the first half of 2025. 

(256)Source: Ember.   

(257) Short-run marginal costs (SRMCs) are the sum of the variable 
costs associated with producing electricity using hard coal 
and fossil gas. These are fuel costs, carbon costs and 
variable operating and maintenance costs. Estimates are 
provided by Ember. 

(258) ‘Spread’ refers to the difference between the highest and 
lowest hourly day-ahead electricity prices in a single day. 

 
 
 
 
 
Graph A9.1: Electricity and gas prices for 
household and non-household consumers, first 
half of 2025 

Flexibility and electricity grids 

(i) For household consumers, the consumption band is DC for 
electricity and D2 for gas. 
(ii) For non-household consumers, the consumption band is ID 
for electricity and I4 for gas. VAT and recoverable charges are 
not displayed for non-household consumers as these are 
typically recovered by businesses. This also applies to the ‘% 
of taxes and levies’, which is shown excluding VAT and 
recoverable charges for non-household consumers. 
(iii) ‘Without taxes and levies’ indicates the retail price 
excluding all taxes and levies. It always includes the 
energy/supply and network cost components, which are not 
disaggregated in Eurostat’s six-monthly price dataset. 
Source: Eurostat 

Graph A9.2: Low-carbon electricity generation vs. 
electricity wholesale prices, 2025 

Unavailable data for Cyprus and Malta. Wholesale price is 
given as average of day-ahead electricity prices over 2025. 
EU-27 average is calculated as consumption-weighted. EU 
low-carbon share is calculated out of total EU electricity 
generation. Low-carbon share by country is calculated out of 
total public electricity generation. Low-carbon includes 
renewables and nuclear. 
Source: Eurostat 

and 

response 

The  Netherlands  is  progressing  to  facilitate 
consumer 
demand-side 
empowerment.  However,  some  barriers  remain. 
Currently  the  roll-out  of  smart  meters  is  above 
90%.  This  has  facilitated  the  introduction  of 
dynamic contracts, which have increased to 4% of 
total  contracts.  This,  together  with  a  29%  rate  of 
prosumers,  creates  many  options  for  demand 
response.  Net  metering  (saldering)  will  no  longer 
be  possible  as  of  1 January  2027  so  as  to 
encourage  households 
to  use  self-generated 
electricity  instead  of  feeding  power  back  into  the 
grid.  The  direct  use  of  self-generated  electricity 
reduces pressure on the grid.  

of 

use 

While the country is physically well-linked to 
other markets in  neighbouring  countries, the 
nominal  interconnection  level  is  currently 
calculated at 9.53% for 2026, below the EU’s 
2030  target  of  15%,  largely  due  to  the 
increasing  volume  of  renewable  generation 
Increasing  the 
relative  to  total  capacity. 
effective 
cross-border 
existing 
infrastructure remains challenging, highlighting the 
importance  of  cross-border  coordination  and 
flexibility solutions to manage congestion and grid 
connection 
these 
constraints,  the  national  regulator  (ACM)  has 
recently  launched  several  initiatives  to  enhance 
grid  flexibility,  including  the  promotion  of  'flexible 
connection 
agreements' 
(contracts  with  a  lower  transport  right)  and  the 
expansion  of  congestion  management  to  the 
distribution level. 

transmission 

constraints. 

address 

and 

To 

While the Netherlands has ensured that 70% 
of transmission capacity is offered for cross-
zonal  trade  at  the  high-voltage  direct 
current  (HVDC)  bidding  zone  borders  with 
Denmark and Norway, this is not the case for 
the  Core (259) 
cross-zonal 
The 
capacity 

trade  within 

calculation 

region 

(CCR). 

(259) Core is the CCR which covers central European countries, 

namely Belgium, Czechia, Germany, France, Croatia, Hungary, 
the Netherlands, Austria, Poland, Romania, Slovenia, Slovakia 
and, once connected, Ireland. A CCR is a group of countries 
which calculate cross-border electricity trade flows together. 

77 

 
 
 
 
 
Netherlands  is  part  of  the  Core  and  Hansa (260) 
CCRs.  The  requirement  to  make  at  least  70%  of 
capacity  available  for  cross-border  trade  has  not 
yet  been  implemented  in  most  Core  Member 
States, including the Netherlands. 

In  December  2019,  the  Dutch  Ministry  of 
Economic Affairs and Climate Policy adopted 
an action plan setting a linear trajectory for 
the  minimum  capacity  available  for  cross-
zonal trade by reinforcing the electricity grid 
to  enable  it  to  meet  the  70%  target  by  the 
end of 2025. 

In  addition,  to  manage  these 
internal 
constraints,  the  Dutch  transmission  system 
operator  TenneT  has  requested  and  been 
granted  a  derogation  from  the  cross-zonal 
capacity  70%  target,  on  the  grounds  of 
loop  flows  from  neighbouring 
excessive 
Member States, most notably Germany. 

to 

at 

the  grid  because 

transmission 
level.  Despite 

Consequently, the Netherlands faces a major 
and 
both 
challenge 
distribution  network 
the 
allocation of a substantial investment budget, with 
grid  operators  noting  that  financing  is  no  longer 
the  primary  constraint—the  core  challenges  have 
shifted  to  execution.  Many  consumers,  including 
industrial  consumers  and  housing  estates,  cannot 
be  connected 
lengthy 
permitting and spatial planning procedures, as well 
as  severe  shortages  of  skilled  labour  required  to 
expand and manage the network. Steps are being 
taken  to  reinforce  the  system,  but  given  these 
non-financial  bottlenecks,  improvements  will  take 
time and congestion will continue to be a problem 
in  the  coming  years.  The  transmission  network 
operator  TenneT  plans  to  invest  EUR 38  billion 
from  2024  to  2034  and  to  carry  out  around  700 
including  grid 
major 
extensions, 
new 
customer  connections,  offshore  wind  farms  and 
reconstruction  projects.  These  investments  are 
aligned  with  ten-year  network  development  plan 
(TYNDP)-identified  needs  for 
large-scale  grid 
expansion and the new project of common interest 
to 
hybrid 
interconnector with Germany. 

infrastructure  projects, 
replacement 

offshore  wind 

investments, 

integrate 

an 

The  Energy  Act  has  been  revised  to  update, 
integrate  the  regulatory 
modernise  and 
framework  for  gas  and  electricity  energy 
systems.  The  energy  market  reform  package 
includes  measures  that  aim  to  reduce  congestion 
on  the  electricity  grid.  In  2023,  62 GWh  of 
renewables  were  curtailed 
total 
renewable  energy  production) (261),  while  negative 
day-ahead prices occurred 315 times (262). 

(0.3%  of 

The Netherlands’ reported electricity storage 
capacity  is  around  600 MWh.  The  country  is 
expecting  more  capacity  to  be  installed  in  the 
coming  years  due  to  the  increasingly  congested 
electricity  grid  networks.  This  capacity  will  be 
derived  from 
large-scale  renewable  electricity 
generation.  As  a  result,  national  transmission 
system  operators  and  distribution 
system 
operators  have  recognised  the  need  to  create  a 
more 
flexible  electricity  system  and  have 
announced  the  goal  of  having  at  least  10 GW  of 
battery  storage  by  2030.  The  Netherlands 
identifies the  development  of  non-fossil  flexibility 
as a priority in its national energy and climate plan 
(NECP)  and  is  working  to  implement  the  new 
flexibility  provisions  of  the  EU  electricity  market 
design package. 

One of the advantages for the Netherlands is 
the  fact  that  more  than  80%  of  connection 
points 
in  the  country  already  have  a 
remotely  readable  measuring  device  (smart 
meter).  The  regulatory  framework  already  allows 
the  use  of  flexibility  in  the  electricity  system  in 
several  ways,  for  example  through  congestion 
management,  aggregation  and  demand-response 
services.  This  flexibility  also  extends  to  supply 
contracts  with  flexible  tariffs  and  the  option  of 
having  multiple  suppliers  on  a  single  connection. 
The  country  has  opened  its  balancing  services  to 
all  types  of  new  actors  and  distributed  energy 
resources. Lastly, the Netherlands allows electricity 
storage  systems  to  participate  in  both  the  day-
ahead and intraday markets. 

In  2024,  electricity  accounted  for  23.4%  of 
the  Netherlands’  final  energy  consumption, 
equal  to  the  EU  average  of  23.4%,  and  this 
share  has  remained  largely  stable  over  the 

(260) Denmark, Germany, the Netherlands, Norway, Poland and 

Sweden are part of the Hansa CCR. 

(261)Source:  ACER. 

(262)Source: Ember 

78 

 
 
 
Graph A9.3: Netherlands’s installed renewable 
capacity vs electricity generation mix 

past (263). When it comes to households, electricity 
accounts  for  24.2%  of  final  energy  consumption, 
while  in  industry  it  represents  22.7%  (see  also 
Annex  8).  For  the  transport  sector,  this  share 
remains  negligible,  at  4.1%.  Further  progress  in 
electrification across sectors is required in order to 
cost-effectively  decarbonise  the  economy  and 
bring 
renewable 
generation to consumers. 

the  benefits  of  affordable 

Renewables and long-term contracts 

Electricity mix is given as net electricity generation (gross 
electricity production minus consumption of power stations’ 
auxiliary services). Electricity produced in pumped hydro 
plants is excluded from total net electricity production, as it 
was previously counted as electricity produced from another 
source. 
“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Eurostat 

In  2025,  the  Netherlands  continued 
its 
support  for  renewables  through  the  SDE++ 
scheme, a one-sided contract-for-difference (CfD) 
instrument  subsidizing  a  variety  of  technologies. 
While the scheme is slated for reopening in 2026, 
the  new  government  has  committed  to  extending 
it  with  six  additional  annual  funding  rounds 
starting  in  2027.  Furthermore,  as  part  of  the  EU 
Electricity  Market  Design 
package 
implementation,  the  Netherlands  will  introduce 
two-sided  CfDs  for  onshore  wind  and  solar  PV 
beginning in 2027. 

(EMD) 

in 

development 

Offshore  wind 
the 
Netherlands  faced  significant  pressure  in 
2025,  illustrated  by  the  lack  of  bids  for  the 
Nederwiek 
is  primarily 
I-A  tender.  This  stall 
attributed to rising costs and lower-than-expected 
electricity  demand,  which have  reduced developer 
certainty  regarding  cost  recovery.  Consequently, 
the  government  now  considers  subsidy-free  bids 
unlikely  and  has  shifted  toward  direct  price 
support to maintain the roll-out. In early 2026, the 
government  announced  tenders  for  IJmuiden  Ver 
Sites Gamma A and B (2 GW total) via the TOWOZ 
mechanism 
(one-sided  CfD).  These  sites  are 
backed  by  anticipated  subsidy  payments  of 
approximately  €2.5  billion  and  €2.3  billion 
respectively, with the permit competition expected 
in  September  2026.  Looking  ahead  to  2027,  the 
government  is  developing  two-sided  CfDs  for 
future  tenders  to  align  with  evolving  market 
conditions. 

the 

it  underscores 

In  2025,  the  Netherlands  accelerated  the 
roll-out  of  renewable  energy.  The  contribution 
set in the NECP planned to increase that share to 
between  32%  and  42%  by  2030.  Although  in 
2025  renewable  energy  sources  (RES)  accounted 
for 48.78% (vs an EU overall RES share of 47%) of 
the  electricity  mix  (264).  While  this  represents  a 
marginal  decrease  of  1.2%  from  the  2024  share 
of  50.6%, 
structural 
advancement of the Dutch power sector compared 
to  the  slower  transition  in  heating  and  transport. 
Installed  capacity  for  renewables  represented  38 
574  MW  in  2025.  The  installed  capacity  for  wind 
energy  stalled  to  11.8 GW  in  2025  (compared  to 
11.7  GW  in  2024,  whilst  installed  capacity  for 
solar  grew  slightly  (+4,5%  compared  to  2024) 
reaching  25.9  GW  (265).  The  contribution  of  solar 
energy  (solar  power  and  solar  heat)  to  energy 
consumption from renewable sources is 22%. The 
development  of  electricity  production  from  solar 
panels  in  2024  was  somewhat  less  substantial 
than  in  previous  years.  The  renewable  share  in 
heating  and  cooling  has  increased  to  11.27% 
(from 9.19%). The main bottlenecks for renewable 
energy  development  in  the  Netherlands  are:  grid 
congestion; high network tariffs; volatile electricity 
prices;  a lack  of  electricity  demand  from industry; 
increased  costs  in  offshore  wind  supply  chains; 
and delayed hydrogen infrastructure development. 

(263) CAGR (compound annual growth rate) of 1.47% between 
2015 and 2024 and minimum/maximum share of 20.3% 
and 23.4% respectively (source: Eurostat). 

(264) Source :Eurostat: nrg_ind_ren. 

(265) Source : Irena, Renewable Capacity Statistics 2026. 

79 

 
 
 
in 

the 

and 

renewable 

low-carbon 

For  the  building  sector  this  includes  support 
heat 
for 
production  technologies  for  district  heating 
and  solar  PV  installations.  For  buildings,  there 
for 
are  various  subsidy  schemes  available 
investments 
renewables, 
specifically for, e.g., heat pumps, solar panels and 
the  connection  to  district  heating.  From  2026 
onwards, municipalities will be authorised (by law) 
to  announce  that  a  specific  neighbourhood  will 
need to be disconnected from the natural gas grid, 
i.e.  that  every  building  in  that  neighbourhood  will 
need to make the transition to a more sustainable 
energy system. 

roll-out  of 

power 

through 
(PPAs),  a 

An  action  plan  to  help  industry  electrify,  in 
purchase 
particular 
agreements 
corporate  PPA 
guarantee fund and CfDs, has been released. 
Moreover,  in  January  2026  the  design  phase  of 
grid  projects  will  be  accelerated,  for  example  by 
more  standardised  application  of  the  overriding 
public  interest  principle,  and  updated  design  and 
permitting  procedures.  Lastly,  the  Netherlands  is 
providing  more  funding  to  local  governments  to 
allocate  additional  resources  to 
issuing  and 
managing renewable energy permits. 

Energy efficiency 

Overall, the Netherlands made little progress 
in  energy  efficiency.  In  2024  final  energy 
consumption  (FEC)  increased  by  2.1%,  compared 
to 2023, to 41.7 (266)  Mtoe, reversing the declining 
trend since 2019 (267). The Netherlands is thus not 
in 
its  expected 
contribution in 2030. 

line  with  the  trajectory  to 

Final  energy  consumption  decreased  only  in 
the  residential  sector,  by  21.3%  between 
2019  and  2024,  despite  a  slight  increase  in 
the  number  of  dwellings.  This  was  the  result 
mainly  of  energy 
through 
behavioural  measures,  policies  and  building 
renovations.  This  decrease  in  final  residential 
energy  consumption  is  in  line  with  the  objectives 
set in the Netherlands’ 2020 long-term renovation 

savings  made 

strategy, which forecast a 13% reduction in energy 
consumption  between  2020  and  2030.  With  32% 
of energy consumed in the Netherlands is used in 
buildings – and hence the importance of the sector 
to increasing energy security, the Netherlands has 
submitted  its  draft  national  building  renovation 
plan  pursuant  to  the  recast  EPBD  in  order  to 
ensure  a  clear  and  predictable  pathway  towards 
an  energy-efficient  and  decarbonised  building 
stock. Anchored to the Social Climate Fund reforms 
in  the  building  sector,  new  energy  performance 
standards will be set requiring rental properties to 
upgrade to at least Energy Label D by 2029. 

final 

residential 

Heating  and  cooling  account  for  79%  of  the 
country’s 
energy 
consumption, with renewables supplying 11% 
of  the  total  energy  used  for  heating  and 
cooling  in  all  sectors.  Approximately  seven 
million  households  heat  their  homes  with  a  gas 
boiler.  Approximately  130 000  heat  pumps  were 
sold in 2024, a decrease of 30% compared to the 
previous  year,  taking  the  total  stock  of  installed 
heat  pumps  to  almost  680 000.  The  decline  in 
heat  pump  sales  in  2024  was  driven  by  a 
combination  of  factors.  These  include  increased 
policy  uncertainty  following  postponement  of  the 
plan to make the installation of hybrid heat pumps 
mandatory  when  replacing  gas  boilers,  lower  gas 
prices  than  during  the  2022–2023  energy  crisis 
peak and slower residential construction activity. 

Energy  renovations  are  supported  through 
several  measures.  The  national 
insulation 
programme  (NIP)  aims  to  insulate  2.5  million 
homes  by  2030,  targeting  1.5  million  poorly 
insulated  houses 
(Labels  E,  F  and  G).  The 
investment  subsidy  for  sustainable  energy  and 
energy savings (ISDE) is part of the Dutch recovery 
and  resilience  plan.  The  subsidy  provides  support 
insulation  measures,  solar 
for  heat  pumps, 
installations,  connections 
to  district  heating 
systems, etc. It was recently upgraded to be more 
renovation  of  protected 
accessible 
buildings  and  the  use  of  bio-based  insulation 
materials. The Netherlands reported 41 ecodesign 
and energy labelling in-depth checks in 2025 (268). 
This  was  fewer  than  in  the  previous  year,  and 
insufficient  given  the  country’s  size  and  the  EU’s 
overall non-compliance levels. 

the 

for 

(266) Eurostat 2024. 

(268) Inspections for Ecodesign/Energy Labelling in 2025 in the 

(267) ENER elaboration based on Eurostat. 

ICSMS database.  

80 

 
 
 
Security of supply and diversification 

the 

reduce 

2025 
(CSRs) 

Country 
to 

The  Netherlands  remains  heavily  reliant  on 
fossil  fuels,  with  only  limited  progress  made 
Specific 
towards 
Recommendations 
this 
dependence  by  accelerating 
roll-out  of 
renewables.  The  total  renewable  energy  share  in 
the  Netherlands  continues  to  track  below  the 
trajectories  mandated  by  the  Revised  Renewable 
Energy  Directive  (RED).  Fossil  fuels  accounted  for 
82.6%  of  the  total  energy  mix,  comprising  oil  at 
42.3%,  natural  gas  at  34.1%,  and  coal  at  6.2%, 
while 
contributed 
15.08% (269). 

renewables  and  biofuels 

the 

As  part  of 
its  national  energy  system 
plan (270),  the  Netherlands  plans  to  build  tat 
least  four  new  nuclear  power  plants,  which 
are set to start operating at the end of 2030. 
The  national  energy  system  plan  sees  room  for 
3.5-7 GW  of  nuclear  energy  capacity  in the Dutch 
electricity mix by 2050. Currently, there is only one 
nuclear power plant operating in the Netherlands – 
the  Borssele  plant,  which  was  built  in  the  early 
1970s  and  has  a  net  capacity  of  0.48 GW.  In 
2024,  it  generated  approximately  3%  of  the 
country’s  power.  It  is  scheduled  to  close  in  2033, 
but  the  government  aims  to  keep  the  nuclear 
power  plant  operating  beyond  then,  provided  that 
this  can  be  done  safely.  The  Netherlands  is  also 
interested/involved  in  developing  small  modular 
reactors 
the 
government  presented  the  national  strategy  for 
SMRs,  aiming  to  provide  clarity  about  whether, 
when  and  under  what  conditions  an  SMR  can 
possibly  be  built.  Implementation  focuses  on 
identifying  suitable  sites,  establishing  commercial 
partnerships,  and  deepening  R&D  cooperation  to 
integrate  SMRs 
long-term 
nuclear expansion.  

(SMRs).  On  17 October  2025, 

into  the  country’s 

the  country 

Although 
is  not  directly 
dependent  on  Russian  gas,  the  Netherlands 
has committed to phasing out Russian gas as 
soon  as  possible.  On  the  demand  side,  security 
of  supply  will  be 
the 
acceleration  of  the  energy  transition  and  gas 

increased 

through 

(269) Eurostat. 

savings.  The  Netherlands  consumed,  on  average, 
28% less gas in the first 10 months of 2024 than 
the pre-crisis average. 

Regarding  security  of  oil  supply, 
the 
Netherlands  is  already  importing  oil  from 
diversified  sources  (mainly  Belgium,  Norway 
and the UK). The Dutch oil infrastructure plays an 
important  role  in  north-west  Europe’s  security  of 
supply, in terms of the import and export of oil and 
oil  products.  The  country  is  willing  to  continue  to 
do this in the future.  

In  response  to  the  regional  crisis  in  the 
Middle  East,  the  Netherlands  has  scaled  up 
to  Phase  1  of  the  National  Oil  Crisis  Plan, 
preparing to release 5.4 million barrels of oil 
from  strategic  reserves.  The  government  has 
also  increased  the  tax-free  travel  allowance  to 
€0.25/km,  introduced  a  50%  reduction  in  motor 
vehicle  tax  for  delivery  vans,  and  established  an 
emergency fund to support vulnerable households 
with high energy bills. 

Fossil fuel subsidies 

In  2024,  environmentally  harmful (271)  fossil 
fuel  subsidies  without  a  planned  phaseout 
before  2030  represented  0.06% (272)  of  the 
Netherlands’  GDP (273). 
the 
Netherlands’  2023  effective  carbon  rate (274) 
averaged EUR 120.03 per tonne of CO₂, above the 
EU weighted mean of EUR 84.80 (275). 

Additionally, 

(271) Explicit fossil fuel subsidies (e.g. direct transfers) and implicit 
fossil  fuel  subsidies  (i.e.  tax  expenditures  linked  to  forgone 
tax  revenues  that  have  an  identifiable  fiscal  impact  for  the 
central  budget)  that  support  fossil  fuel  energy  production, 
transmission and/or consumption.  

(272) European  Commission  calculation  based  on  underlying  data 
from  the  Study  on  energy  subsidies  and  other  government 
interventions in the EU – 2025 edition, Enerdata. 

(273)2024 gross domestic product at market prices, Eurostat.   

(274)The  effective  carbon  rate  is  the  sum  of  carbon  taxes,  ETS 
permit  prices  and  fuel  excise  taxes,  representing  the 
aggregate effective carbon rate paid on emissions. 

(270) Nationaal plan energiesysteem, 2023. 

(275) OECD (2024), Pricing Greenhouse Gas Emissions 2024. 

81 

 
 
 
 
ANNEX 10: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

The  Netherlands  faces  significant  climate 
risks  -  requiring  ongoing  efforts  to  bolster 
resilience - while also confronting challenges 
in  making 
its  agricultural  sector  more 
sustainable.  Despite  these  climate  risks,  a 
comprehensive  policy  framework  and 
robust 
insurance coverage help mitigate economic losses 
from  climate-related  events,  though  continued 
economy-wide  investments  will  be  necessary  to 
enhance  resilience  against 
increasing  climate 
impacts.  The  national  climate  adaptation  strategy 
(NAS)  and  delta  programme  are  key  frameworks, 
although  broader  climate  adaptation  policy 
integration  and  coverage  could  be  enhanced, 
despite  recent  progress.  Nature-based  solutions 
are  crucial  but  face  challenges  due  to  high  land 
costs,  necessitating  a  shift  from  flood-centric  to 
biodiversity-led  strategies.  The  Netherlands  is  not 
on  track  to  meet  its  2030  agricultural  emission 
reduction 
the  need  for 
additional action. Nitrogen deposition (276) remains 
a  major  environmental 
the 
Netherlands,  contributing  to  eutrophication  and 
acidification  of  soils  and  water.  Water  quality  is 
negatively  affected  by  diffuse  pollution  from 
intensive  agriculture,  electricity  production,  the 
metal sector and chemical industries. In 2025, the 
country-specific 
Netherlands 
recommendation 
structural 
measures  to  tackle  excessive  nitrogen  deposition 
and  water  quality  deterioration,  including  further 
efforts  to  promote  sustainable  agriculture,  but 
limited progress has been made thus far.  

target,  underscoring 

received 
to 

implement 

challenge 

in 

a 

Climate adaptation and preparedness 

The Netherlands is increasingly vulnerable to 
climate change. Approximately 59% of its land is 
susceptible  to  flooding  from  both  the  sea  and 
major  rivers,  with  nearly  26%  of  its  territory 
Heavy 
situated 

below 

level 

(277). 

sea 

(276) The two gas compounds (ammonia and nitrogen oxides) are 
generally referred to as ‘nitrogen’ in the context of its impact 
on  nature  and  the  environment  in  general.  Ammonia  and 
nitrogen  oxides  have  different  emission  sources  but  cause 
cumulative and significant damage to the health of humans 
and the environment, especially Natura 2000 sites. 

(277) Most of this (55% of the Netherlands) is protected by dunes, 
dikes,  dams  or  engineered  structures,  while  only  4%  is  not. 
PBL Correctie formulering over overstromingsrisico Nederland 
in IPCC-rapport.  

82 

response 

climatic 
the  Netherlands  faces 

precipitation (278)  further  exacerbates  flooding 
risks,  and  the  resultant  damages  are  projected  to 
escalate 
change. 
in 
Additionally, 
recurrent 
threats  from  extreme  weather  events,  such  as 
severe  flooding,  droughts  and  heat  stress,  which 
may  lead  to  cumulative  impacts  and  impose 
significant pressure on its national budget (279). 

to 

Climate  risks  have  a  direct  economic  impact 
on the Dutch economy, even as the insurance 
coverage  remains  high.  Between  1980  and 
2024,  the  Netherlands  recorded  EUR 6.4  billion  in 
economic  losses  (280)  caused  by  weather  and 
climate-related  extreme  events.  Despite  these 
losses,  the  country  is  positioned  among  the  EU 
Member  States  with  the  lowest  share  of  the 
natural catastrophe damages relative to GDP (281). 
The Netherlands boasts one of the highest rates of 
insurance coverage against weather- and climate-
in  the  EU,  at  47%, 
related  extreme  events 
compared  to  the  EU27  average  of  19%  (282). 
Climate  risks  are  set  to  increase  in  the  future, 
which  could  lead  to  both  higher  costs  and  higher 
insurance premiums (283). 

Available  sources  estimate  that  investment 
needs  in  the  Netherlands  related  to  climate 
adaptation will be significant in the future. A 
recent  study  estimates  that  the  Netherlands  will 
need  to  invest  almost  EUR 2.5  billion  per  year  up 
to  2050  (0.2%  of  annual  GDP,  which is  below  EU 
average  of  0.5%)  (284):  first  and  foremost  in 
infrastructure 
reinforcement 
retrofitting  and 
(approximately 50% of the total), followed by food 
(approximately  29%,  significantly  higher  than  the 
EU  average  of  approximately  17%),  ecosystems 

(278) KNMI – Uitleg over neerslag.  
(279) For  more information on climate risks  that  pose  a  threat  to 
the Netherlands as well as other European countries, see the 
European Climate Risk Assessment. 

(280) EEA,  2024, Economic  losses  from  weather-  and  climate-

related extremes in Europe. 

(281) ECB,  EIOPA  (2024),  Towards  a  European  system  for  natural 

catastrophe risk management. 

(282) EEA,  2024, Economic  losses  from  weather-  and  climate-

related extremes in Europe. 

(283) PBL, 2024, Klimaatrisico’s in Nederland, de huidige stand van 

zaken. 

(284)European  Commission  (2026),  Assessment  of  EU  and 
Member  States  adaptation  investment  needs,  Table  25.  The 
study  provides  detailed  estimates  of  adaptation  investment 
needs  at  the  level  of  the  EU  and  individual  Member  States  per 
type of measure. It relies on a common methodology that makes 
estimates  comparable  across  the  EU.  Four  accompanying 
methodological reports provide a detailed description of how the 
results were estimated to ensure full transparency. 

 
 
 
 
 
(approximately  12%),  and  health  (approximately 
8%  of  the  total),  while  investments  in  economy 
and  finance  account  for  only  approximately 
0.15% (285). 

to 

across 

involves 

framework 

collaboration 

The  Netherlands  has  established  a  robust 
institutional 
implement 
adaptation  efforts.  It  includes  the  NAS  (286), 
the 
which 
administration,  and 
the  delta  programme, 
supported  by  the  delta  fund  (287).  The  delta 
programme  adopts  strategic  objectives  every  six 
years,  and  the  programme  is  submitted  to  the 
national  parliament  annually.  Key 
institutions 
involved  in  these  efforts  include  the  Ministry  of 
Infrastructure  and  Water  Management,  including 
Rijkswaterstaat,  the  national  agency  for  water 
management,  all  provinces,  all  regional  water 
authorities  and  all  municipalities.  The  NAS 
addresses the overall adaptation efforts. However, 
while  climate  adaptation  policy  is  increasingly 
integrated into broader governmental policies and 
long-term planning, including at regional and local 
levels  (288),  this  integration  remains  incomplete 
and uneven (289), leaving scope for improvement 

The  share  of  the  Netherlands’  population 
covered  by  EU  Covenant  of  Mayors  (290) 
signatories  remains  relatively  low  compared 
to  the  EU  average.  It  stood  at  4%  (vs  EU27: 
34%) in 2024 (291). This reflects a distinct national 
context  where  local  climate  action  is  primarily 
driven 
the  country’s  comprehensive 
domestic  frameworks  like  the  delta  programme 
rather  than  through  EU-led 
initiatives  alone. 
Despite  the  smaller  number  of  signatories,  those 

through 

(285) Typical  investments  in  ecosystems  include  soil  restoration, 
wildfire  prevention,  biodiversity  protection  and  coastal 
ecosystems  restorations  while  typical  investments  in  health 
are  linked  to  occupational  health  and  safety,  wastewater 
treatment facilities upgrade and wildfire disaster response. 

(286) Kennisportaal klimaatadaptatie. 
(287) More 

information  about 

the  Dutch  National  Delta 
Programme  and  its  accompanying  fund  can  be  accessed 
through a dedicated website, english.deltaprogramma.nl. 

(288) Dutch  regional  and 

increasingly 
preparing their own climate adaptation programmes. See, for 
instance, the one from Utrecht.  

local  government  are 

(289)See, for instance,  OECD Economic Surveys: Netherlands 

2025.  

(290) The  EU  Covenant  of  Mayors  for  Climate  &  Energy  is  the 
largest movement of local governments in Europe acting on 
climate  change to  secure  a  better  future  for  their  people.  It 
gathers  over  10 500 local  authorities  voluntarily committed 
to the European Union’s energy and climate targets.  

that  have  committed  demonstrate  a  high  level  of 
commitment.  Many  Dutch  participants  have 
successfully  moved 
to 
from 
submitting 
(56%)  and 
monitoring reports (40%). 

formal  action  plans 

initial  pledges 

framework.  As  part  of 

The Netherlands is continuously improving its 
adaptation 
the 
preparatory work for the 2026 update of its NAS, 
the  country  has  developed  15  adaptation 
pathways (292). These pathways allow for a change 
in  strategy  when  a  climate  or  societal  threshold, 
known  as  an  adaptation  tipping  point,  has  been 
reached. This approach avoids low-regret or high-
regret solutions while  allowing for flexibility.  They 
distinguish  a phase  of  ‘intensification’  and  one  of 
‘transformation’.  The  Dutch  Environment  Agency 
(PBL) has published the first part of a new national 
climate  risk  assessment  and  will  publish  the 
second part in the course of 2026 (293). In addition, 
the  Netherlands  has  recently  launched  the  Dutch 
Risk Portal (294), which offers open-source data on 
climate  risks  and  hazards  for  informed  decision-
making. It was developed in close cooperation with 
the  Dutch  financial  sector  and  leading  climate 
experts. It has also drawn up risk maps (295). 

While adaptation measures for water-related 
climate  hazards  are  highly  developed,  those 
addressing  other  risks  -  such  as  cold  snaps, 
storms,  and  heat  stress  -  remain 
less 
mature.  As  a  result,  the  economic  costs  of 
increasingly  frequent  extreme  weather  events 
could  be  higher.  Recent  events  underscore  these 
vulnerabilities.  In  early  2026,  the  Netherlands 
experienced a severe Arctic blast that brought the 
nation’s  infrastructure  to  a  halt.  Snowfall  of  5  to 
25 centimetres blanketed the country, resulting in 
the  most  severe  traffic  congestion  since  1999, 
with over 800 kilometres of recorded traffic jams 
(296).  The  country’s  largest  airport,  Amsterdam 
Airport  Schiphol,  was  also  forced  to  cancel 
hundreds  of  flights,  stranding  thousands  of 
recent 
passengers 

(297).  Furthermore,  during 

(292) Kennisportaal 

Klimaatadaptatie 

– 

Nationale 

klimaatadaptatiestrategie.  

(293) PBL  -  Klimaatrisico's  in  Nederland  -  De  huidige  stand  van 

zaken. 

(294) Dutch Climate Risk Portal.  
(295) Risicokaart.nl. 
(296) Covered  in  several  news  outlets,  e.g.  in  NOS  Nieuws  - 
Sneeuw  ontregelt  Nederland,  ook  rest  van  de  week  nog 
overlast verwacht. 

(291) EU Covenant of Mayors - Netherlands. Data retrieved on the 

(297) This  was  widely  covered  in  media,  see  e.g.  de  Volkskrant  – 

7 May 2026. 

Hoe Schiphol grotendeels stilvalt door de sneeuw. 

83 

 
 
 
the 

country’s  preparedness 

heatwaves, 
for 
heatwaves was tested as the electricity grid faced 
localised  cooling  failures  and  steel  bridges 
jammed  after  expanding 
the  heat.  The 
Netherlands  plans  to  strengthen  its  approach  to 
major climate risks in the 2026 update of its NAS. 

in 

Climate  proofing  is  being  applied  across  the 
Netherlands.  This  is  done  primarily  through  the 
NAS and Delta programme. For the energy sector, 
the Netherlands has recognised that the transition 
to clean energy sources is sensitive to rising water 
temperatures  and  sea-level  rise,  which  threaten 
cooling water availability for power plants and the 
integrity  of  coastal  energy  hubs.  As  per  the  final 
updated  Dutch  national  energy  and  climate  plan 
(298),  billions  of  EUR  in  grid  reinforcements  and 
protective  measures  for  offshore  wind  landing 
points  will  be  required  through  2040  to  mitigate 
these risks. The transport vulnerability index of the 
Dutch  TEN-T  network  remains  one  of  the  highest 
in the EU due to the country’s low-lying geography 
and  high  density  of  assets  (299).  Unlike  the 
challenges  faced  by  many  Member  States,  the 
Dutch risk is not driven by a lack of mainstreaming 
of  climate  proofing,  but  rather  by  a  significant 
concentration  of 
in  flood-prone 
infrastructure 
areas. While the transport network has historically 
focused  on  flood  defence  against  the  sea  (300), 
future risks are increasingly tied to pluvial flooding 
from  extreme  rainfall  (301).  Soil  subsidence  in 
peatland  areas  also  adds  to  climate  adaptation 
challenges, but is not, in principle, a direct threat to 
the  transport  network.  Although  the  Netherlands 
reports  some  of  the  most  consistent  investments 
in  TEN-T  adaptation,  the  intensity  of  its  land  use 
and  its  position  below  sea  level  mean  that  even 
small failures in the adaptation chain could lead to 
significant  economic  disruptions.  Consequently, 
key  parts  of  the  infrastructure  -  particularly  the 
of 
high-speed 

links 

Port 

and 

the 

rail 

(298) Final updated NECP of the Netherlands.  
(299) Support  study  on  the  climate  adaptation  and  cross-border 

investment needs to realise the TEN-T network. 

(300) Notwithstanding  the  already  made  substantial  investments, 
if  current  levels  of coastal protection  are  not  raised,  direct 
economic damages and social impacts from coastal flooding 
in the Netherlands are projected to rise sharply this century. 
At  the  same  time,  the  benefits  of  avoided  flooding  are 
estimated 
costs 
of coastal protection,  see  e.g.  this  article  from  nature.com  - 
Economic motivation for raising coastal flood 
defenses in Europe. 

significantly 

outweigh 

the 

to 

(301) Support  study  on  the  climate  adaptation  and  cross-border 
investment needs to realise the TEN-T network. Publications 
Office of the European Union, 2024. 

84 

Rotterdam (302)  -  require  continuous,  multi-billion-
euro  protective  upgrades  to  remain  resilient 
against mid-century climate impacts. 

and 

play 

urban 

solutions 

prevention 

The  Netherlands  is  often  cited  as  a  global 
leader  in  nature-based  solutions,  yet  there 
remains  significant  scope  to  move  from 
flood-centric nature-based solutions to more 
and 
biodiversity-led 
integrated, 
agricultural  resilience  strategies.  Nature-
based 
a 
foundational  role  in  increasing  Dutch  climate 
resilience.  Extreme  droughts  and  soil  subsidence 
are  no  longer  isolated  events  but  are  becoming 
chronic challenges for the country’s peatlands and 
foundations.  In  the  Netherlands,  nature-based 
solutions  have  already  been  deployed  at  a  large 
scale  and  systematically,  particularly  within  the 
water  management  sector.  The  Dutch  have 
integrated  nature-based  solutions  into  national 
the  River’ 
policy 
programme (303)  and  the  ‘Building  with  Nature’ 
initiative  (304).  These  are  applied  extensively  to 
manage  fluvial  floods  (e.g.  the  widening  of  the 
Waal  and  Rhine  floodplains)  and  coastal  defence 
(e.g.  the  Sand  Motor,  a  large-scale  innovative 
beach  nourishment  project).  If  current  levels  of 
coastal  protection  are  not  raised,  direct  economic 
damages and social impacts from coastal flooding 
in  the  Netherlands  are  projected  to  rise  sharply 
this century. At the same time, benefits of avoided 
flooding  are  estimated  to  significantly  outweigh 
the  costs  of  coastal  protection.  A  particular 
challenge for implementing nature-based solutions 
in  the  Netherlands  is  the  very  high  price  of 
land (305),  among  the  highest  in  Europe,  which 
makes  nature-based  solutions  –  often  requiring  a 
change of land use – quite expensive. 

through 

‘Room 

the 

for 

Water resilience 

Large  areas  of  the  Netherlands  face  water 
from  energy, 
stress  due 

to  demand 

(302) The climate proofing of ports in general, as well as fisheries 
ports more specifically, is essential to protect critical onshore 
infrastructure  from  accelerating  sea-level 
rise  and  to 
facilitate  the  upgrading  of  electrical  grids  required  for  the 
transition to a climate-neutral fleet. 
(303) Rijkswaterstaat – Ruimte voor de rivieren.  
(304) Rijkvastgoedbedrijf – Natuurinclusief bouwen.  
(305) See  for  instance  the  price  of  agricultural  land.  Eurostat  – 

agricultural land prices and rents.    

 
 
 
of 

and 

surface 

Between 2000 and 2019, 

manufacturing  and  public  water  supply  (306). 
These  sectors  depend  heavily  on  stable  water 
availability.  Water  stress  has  been  observed  for 
several years, with increasing drought, salinisation 
and  rising  water  consumption  by  households  and 
total 
businesses. 
abstraction 
groundwater 
increased by 24% while the share of groundwater 
abstraction  declined  from 13%  to 12%  (307).The 
Netherlands  ranks  13th  in  the  EU  in  terms  of 
water exploitation according to the national Water 
Exploitation  Index+  (308)    which  measures  water 
use  relative  to  renewable  freshwater  resources 
and suggests low overall pressure due to relatively 
abundant  resources.  However,  seasonal  pressure 
can be higher: in summer 2022 the WEI+ reached 
6%, close to the EU average of 6.8% in the same 
period.  This  overall  picture  masks  significant 
underlying  pressures  and structural  imbalances  in 
water  use  (309). 
In  2023  the  energy  sector 
consumed  6 517  million  m³  (62%)  of  water. 
Energy  and  manufacturing  together  account  for 
86%  of  total  abstraction  (310),  pointing  to  a  high 
and  increasing  concentration  of  water  use  in  a 
limited  number  of  water-intensive  sectors.  This 
concentration  heightens  vulnerability  to  localised 
shortages and seasonal stress, which are not fully 
reflected 
indicators.  Water 
resources  play  a  key  role  in  the  Dutch  economy. 
Major  rivers  and  extensive  canal  systems connect 
industrial  centres  and  support  economic  activity. 
According  to  the  Commission’s  European  Drought 
Risk  Atlas,  drought  can  significantly  affect  river 
transport 
freshwater 
and 
terrestrial 
ecosystems in the Netherlands (311). 

in  national-level 

and 

declining over the past five years. This reflects the 
importance  of  water-intensive  sectors  such  as 
energy  and  manufacturing.  In  2023  electricity 
accounted  for  62%  of  freshwater  abstraction, 
manufacturing  for  24%  and  public  water  supply 
for  13%  (313).  Total  abstraction  remained  broadly 
stable between 2022 and 2023. The NL confirmed 
review 
the  decision 
of authorisations for  water 
and 
discharge into water in the second half of 2027.  

introduce  periodic 

abstraction 

to 

in 

intensive 

shows  deterioration 

Water  quality  remains  a  major  concern  for 
The 
surface  and  groundwater  bodies. 
assessment of the River Basin Management Plans 
(RBMPs) 
ecological 
status/potential  and  chemical  status  compared 
with  the  second  RBMPs  (covering  2015–  2021); 
this  is mainly  due to  the  incorporation  of  new 
substances and standards. Main pressures include 
land  use, 
high  population  density, 
legacy 
economic  and  agricultural  activities, 
transboundary  pollution.  These 
pollution  and 
pressures 
(e.g. 
hydromorphology 
canalisation,  flood  protection  and  agricultural 
modifications) and lead to pollution from nitrates, 
fertilisers,  pesticides  and 
river-basin-specific 
pollutants.  The  Netherlands  regulates  around  80 
river-basin-specific  pollutants,  although  only  a 
small subset drives failure to achieve good status 
or  potential  (including  ammonium,  cobalt,  arsenic, 
selenium,  silver  and  zinc)  (314).  Marine  water 
quality  is  also  under  pressure  from  agricultural 
runoff,  microplastics  and  industrial  discharges 
affecting 
the  Wadden  Sea  and  North  Sea 
ecosystems. 

affect 

Water  productivity  in  the  Netherlands  (312) 
remains relatively low (16th in the EU), reaching 
EUR 96  per  m3  of  abstracted  water  in  2022  and 

(306)  EEA,  Water  abstraction  by  economic  sector,  2000-2023, 

2025.  

(307)  Netherlands  |  Country  profiles  on  water  resources  |  WISE 

Freshwater. 

(308)  A measure of how much water is being used compared with 
the  total  renewable  freshwater  resources  available  for  a 
given territory and period. 

(309)  Between 2018 and 2023, water abstraction increased by 
93% in the energy sector and by 1% in manufacturing, 
while it decreased by 44% in agriculture and rose by 3% in 
public water supply. 

limits 

(315).  This 

Chemical  status  remains  a  major  challenge, 
with  90%  of  surface  water bodies  failing to 
reach  good  status 
the 
availability  of  high-quality  water  for  agriculture 
and  industry  and  is  mainly  linked  to  ubiquitous 
persistent  bioaccumulative  and  toxic  substances 
and  industrial  chemicals.  The  Netherlands  has 
taken  steps  to  strengthen  the  link  between  water 
quality  objectives  and  permitting,  control  and 
systems,  although  governance 
enforcement 

(313)EEA, 2025, Water abstraction by source and economic sector 

in Europe., 

(310)  EEA,  Water  abstraction  by  economic  sector,  2000-2023, 

(314)  European  Commission,  Environmental 

Implementation 

2025. 

(311) European Commission, 2023, European Drought Risk Atlas,. 
(312)  Water productivity is a metric that is calculated by dividing 
GDP  (in  chain-linked  volume)  by  total  water  abstraction.  It 
indicates  the  average  economic  value  (GDP)  a  Member 
State creates for each unit of water it takes from nature. 

Review (2025), Netherlands country report, page 32. 

(315)  European Commission, Environmental Implementation 
Review (2025), Netherlands country report, Figure 28. 
(failure to achieve good chemical status is mostly due to 
exceedances of the EU environmental quality standards of 
about 10 % of regulated priority substances.) 

85 

 
 
 
remains  decentralised  and  fragmented  (316).  The 
long-standing  delta  programme  aims  to  address 
climate-related water risks. Drinking water quality 
supplied  by 
large  providers  does  not  raise 
concerns.  Compliance  with  the  Urban  Wastewater 
in  2022, 
Treatment  Directive  reached  100% 
unchanged  since  2018  and  well  above  the  EU 
average of 76%  (317). Annual  investment needs in 
the  water  sector  are  estimated  at  EUR 4.6  billion 
(2022  prices).  Of  this,  EUR 1.9  billion  relates  to 
wastewater  management 
(including  additional 
costs from the revised UWWTD), EUR 2.7 billion to 
drinking water and around EUR 64 million to water 
(318).  Current 
protection  and  management 
investments  amount  to  about  EUR 3.7  billion 
annually 
(2021-2027).  Approximately  EUR 1.3 
billion supports wastewater management, EUR 2.3 
billion  drinking  water  and  EUR 71  million  other 
Water  Framework  Directive  measures.  Most 
financing  comes  from  national  sources  (98%), 
while  EU  funding  accounts  for  0.4%  (mainly 
cohesion  policy)  and  the  Recovery  and  Resilience 
Facility  for  0.3%.  EIB  financing  represents  around 
1.4%  (319).  To  meet  the  objectives  of  the  Water 
Framework Directive and the Floods Directive, the 
Netherlands  faces  an  annual  investment  gap  of 
EUR 935 million (0.1% of GDP), including EUR 567 
million  for  wastewater  measures  and  EUR 367 
million for drinking water investments (320). 

Economic  instruments  to  strengthen  water 
resilience remain underused. Although pollution 
the  Water  Board  Act  and 
charges  under 
groundwater abstraction fees are applied, there is 
scope  to  better  reflect  environmental  costs  (321). 

(316)  European  Commission,  Environmental 

Implementation 

Review (2025), Netherlands country report, page 33. 

(317)Netherlands 

|  Country  profiles  on  urban  waste  water 

treatment | WISE Freshwater, Fig. 4  

States’, 

28 May 

(318)  See  European  Commission,  ‘Estimating  investment  needs 
and financing capacities for water-related investment in EU 
Member 
2020, 
https://commission.europa.eu/news/estimating-investment-
needs-and-financing-capacities-water-related-investment-
eu-member-states-2020-05-28_en  ;  and  OECD,  Financing 
Water Supply, Sanitation and flood Protection: Challenges in 
EU  Member  States  and  policy  options,  OECD  Publishing, 
Paris, 
https://www.oecd-
ilibrary.org/environment/financing-watersupply-sanitation-
and-flood-protection_6893cdac-en  

2020, 

relatively 

levies  are 

Current 
low  and  vary 
regionally  due  to  the  autonomous  role  of  water 
boards.  Gradually  harmonising  rates  and  aligning 
them  with  environmental  costs  could  improve 
efficiency  and  support  cost  recovery  in  line  with 
the  Water  Framework  Directive’s  ‘polluter  pays’ 
principle. 

Nature restoration 

Nature degradation poses significant risks to 
the  Dutch  economy  and  competitiveness. 
Around 26% of supply chains’ gross value depends 
highly  on  ecosystem  services  (EU-27:  22%)  (322) 
and overall 44% of the economy relies strongly on 
these  services.  Sectors  such  as  agriculture, 
forestry  and 
fisheries,  mining  and  metals, 
construction,  water  utilities  and  healthcare  are 
(323),  with  ecosystem 
particularly  dependent 
services  underpinning  their  entire  value  added. 
Preserving  and  restoring  ecosystems  is  therefore 
essential  to  avoid  economic  losses  and  maintain 
long-term  competitiveness.  The  nitrogen  and 
nitrates  situation  largely  due  to  emissions  from 
agriculture is relevant as it has a negative impact 
also  on  new  construction  permits.  It  remains  very 
urgent  to  address  in  order  to  facilitate  new 
infrastructure  and  housing  projects.  In  2023,  the 
Netherlands  legally  protected  26.5%  of  its  land 
area (EU-27: 26.4%) and 31.6% of its marine area 
(EU:  13.7%)  (324),  meeting  the  EU  30%  marine 
target.  While  the  Natura  2000  network  is  largely 
complete,  gaps 
II 
species (325). Biodiversity indicators show continued 
decline:  the  farmland  bird  index  fell  to  60.4  in 
2022 (EU: 68.7 in 2023), down from 81.1 in 2011. 
This  led  the  Commission  to  open  an  infringement 
procedure in July 2024 under the Birds Directive. A 
separate 
the 
monitoring  of  harbour  porpoise  bycatch  (326).  The 
Netherlands still needs to restore up to 3 305 km² 

remain  for  some  Annex 

infringement 

concerns 

case 

1 000 m³  for  households,  alongside  a  wastewater  tax  of 
€3.02 per kilogram of biochemical oxygen demand (BOD₅). 

(322)  Hirschbuehl et al. (JRC),  The EU economy’s dependency on 
European 

VASILAKOPOULOS, 

editor(s), 

P. 

nature, 
Commission, (2025). 

(319)  Water investment levels are estimated through tracking EU 
(EPEA 

funds,  EIB  projects  and  national  expenditure 
accounts, Eurostat). 

(320)  European Commission, Environmental Implementation 

Review (2025), Netherlands country report, page 46. 
(321)  Hogg  et  al.  (2016)  proposed  a  water  abstraction  tax  of 
€190  per  1 000 m³  for  industrial  users  and  €300  per 

(323)Dataset  from  Commision/JRC,  based  on  Hirschbuehl  et  al., 

2025, The EU economy’s dependency on nature,. 

(324)  Eurostat, Protected Areas Indicator, 
(325)  European  Commission,  Environmental 

Review (2025), Netherlands country report. 

Implementation 

(326)  European  Commission,  Environmental 

Implementation 

Review (2025), Netherlands country report, page 16. 

86 

 
 
 
 
of  Annex  I  habitats  (around  8.3%  of  land)  (327), 
while  only  12%  of  habitats  and  26%  of  species 
are  in  favourable  conservation  status  (328)  The 
forest condition index stood at 0.56 in 2018 (329). 

Pressures  from  invasive  alien  species  (IAS) 
remain significant, with 59 IAS recorded in 2024 
(330),  and  damages  estimated  at  EUR 2.86  billion 
(1960-2020),  mainly  affecting  agriculture  (331). 
The  Netherlands  ranks  fourth  in  the  EU  for 
established  IAS  populations.  This  relatively  high 
number  is  linked  to  its  river  delta  location, 
intensive  economic  activity  and  strong  monitoring 
systems.  Rising North Sea temperatures are also 
altering  marine  ecosystems:  (i)  cold-water  fish 
stocks,  such  as  North  Sea  cod,  are  shifting 
northwards,  forcing  local  fleets  to  move  away 
from traditional fishing grounds (332) (333) (334); and 
(ii)  while  invasive  species  such  as  the  Pacific 
oyster and the comb jelly alter marine ecosystems 
by  competing  with  or  preying  on  planktonic 
organisms, 
thereby 
threatening  native  species  (e.g.  mussel  beds)  and 
commercial  fisheries  (335)(336).  In  this  context,  it  is 
essential to improve data collection and ensure an 
effective fisheries control enforcement. 

including 

larvae, 

fish 

Measures under the Dutch recovery and resilience 
plan support river restoration, water management 
and hydrological improvements, contributing to the 
EU  objective  of  25  000  km  of  free-flowing  rivers 
by  2030  and  supporting  the  Water  Framework 
Directive. These actions also generate co-benefits, 
including improved water quality, flood protection, 
and socio-economic opportunities such as tourism 
and  job  creation.  Despite  some  improvement, 
remain  high,  with 
eutrophication  pressures 
affected  areas  declining  from  87.9%  to  76.3% 
since  2005  (337).  Exceedances  of  critical  nitrogen 
loads  remain  among  the  highest  in  the  EU, 
including  in  Dutch  border  regions.  Agricultural 
nutrient pressures are a key driver, affecting both 
ecosystems and water quality. According to RBMP 
assessments,  nutrient  pollution  from  agriculture 
continues  to  hinder  the  achievement  of  good 
ecological  status.  In  2019,  around  112  million  kg 
of  nitrogen  from  livestock  farming  was  not  taken 
up by plants and was released to the environment, 
representing  ~23%  of  unused  nitrogen  (about 
16%  of  total  inputs)  (338).  This  contributes  to 
acidification and eutrophication, affecting sensitive 
nature 
habitats 
legislation  (339) (340). 

protected 

under 

EU 

(327)  European 

Commission,  2022, 

assessment 
accompanying  the  proposal  for  a  regulation  on  nature 
restoration. 

Impact 

(328)  EEA, Conservation status of habitats under the EU Habitats 

Directive. 

(329)  Maes,  J.,  Bruzón,  A.G.,  Barredo,  J.I.  et  al.  Accounting  for 
forest  condition  in  Europe  based  on  an  international 
statistical standard. Nat Commun 14, 3723 (2023). 

(330)  European  Commission,  Environmental 

Implementation 

Review (2025), Netherlands country report., p. 22. 

(331)  NeoBiota,  Economic  Cost  of  invasive  alien  species  across 
Europe,  2021  and  European  Commission:  EMRC,  Logika 
Group  and  RPA  Europe, Update  of  the  costs  of  not 
implementing EU environmental law, 2025, p. 62. 
(332)  Engelhard et al. Climate change and ﬁshing: a century of 

shifting distribution in North Sea cod. Global Change Biology 
(2014), doi: 10.1111/gcb.12513. 

(333)  Camapana et al. Shifting fish distributions in warming 
sub-Arctic oceans. Nature Research: Scientific reports 
(2020), doi.org/10.1038/s41598-020-73444-y. 
(334)  DeFilippo et al. Characterizing dominant patterns of 

spatiotemporal variation for a transboundary groundfish 
assemblage. Fisheries Oceanography (2023). 
https://doi.org/10.1111/fog.12651. 

(335)  Javidpour et al. Cannibalism makes invasive comb jelly, 
Mnemiopsis leidyi, resilient to unfavourable conditions. 
Communications Biology (2020), doi.org/10.1038/s42003-
020-0940-2. 

(336)  Joyce et al. R elative impacts of the invasive Pacific oyster, 
Crassostrea gigas, over the native blue mussel, Mytilus 
edulis, are mediated by flow velocity and food 
concentration. NeoBiota, doi.org/10.3897/neobiota.45.3316. 

Permitting 

constraints 

Economic  impacts  of  insufficient  action  to 
address  excessive  nitrogen  deposition  are 
significant. 
could 
potentially  cause  losses  of  EUR  4.1–21.5  billion 
between  2024  and  2030  (341).  Court  rulings  in 
December  2024  and  January  2025  have  further 
restricted  permitting  and  required  reductions  in 
nitrogen  overload  (Greenpeace  case),  highlighting 
the  urgency  of  action  (342)(343).  More  broadly, 

(337)  EEA,  Eutrophication  caused  by  atmospheric  nitrogen 

deposition in Europe 2024. 

(338)  https://longreads.cbs.nl/nederland-in-cijfers-2021/hoeveel-

stikstof-produceert-de-veehouderij/.  

(339)  Scientific reports show that 17 habitat types are ‘sensitive’ 
to  nitrogen  and  28  habitat  types  are  considered  ’very 
sensitive’ to nitrogen (Wamelink, W., van Dobben, H., van der 
Zee, F. et al., Overzicht van kritische depositiewaarden voor 
stikstof,  toegepast  op  habitattypen  en  leefgebieden  van 
Natura  2000,  Wageningen  University  &  Research,  2023, 
Link). 

(340)  Habitats much more vulnerable for nitrogen deposition than 

previously thought | WUR. 

(341)https://www.rijksoverheid.nl/documenten/kamerstukken/2025/
07/02/eindrapport-onderzoek-economische-effecten-
stikstofproblematiek  and  Article  NOS  2 July  2025,  Lack  of 
nitrogen policy costs the Dutch economy tens of billions . 

(342)  Council of State limits further shift of nitrogen space. 
(343)  ‘Greenpeace wint zaak tegen Staat, rechter dwingt kabinet 
meer  haast  te  maken  met  stikstofaanpak’ [Greenpeace 
wins case against the state, judge compels cabinet to make 

87 

 
 
 
 
approach 

addressing 

In  April  2025, 

studies  suggest  that  the  current  agricultural 
system generates a net negative impact of around 
EUR  5.3  billion  annually  when  environmental  and 
societal costs are considered (344). Transitioning to 
alternative  farming  systems  could  significantly 
reduce these costs. So far, policy action has been 
insufficient. 
the  government 
presented  a  nitrogen  package,  which  fell  short  of 
delivering  a  clear  and  structurally  robust  solution, 
with  subsequent  measures  remaining  uncertain. 
Voluntary buy-out schemes have delivered limited 
results  and  effective  implementation  of  concrete 
measures is still needed. The government plans to 
allocate  EUR  20  billion  until  2035  to  reduce 
nitrogen  pollution  through  an  integrated  area-
based 
multiple 
environmental pressures, but its effectiveness will 
depend  on  implementation  and  coordination  with 
regional  authorities.  An  8th  Nitrates  Action 
Programme  is  also  under  development.  However, 
the national target of 50% reduction of nitrogen is 
delayed  from  2030  to  2035,  with  interim  stock 
taking  in  2030.  If  in  2035  nitrogen  deposition 
reduction  is  not  on  track,  ‘production  rights’  may 
be  curtailed. A recent official  report (345) suggests 
that  chances  for  reaching  the  objectives  for 
climate in 2050 and nitrogen in 2035 are minimal, 
meaning  the  challenge  remains  significant.  The 
report concludes that the package of the coalition 
agreement 
to 
previous  policies,  but  falls  short  of  achieving 
nitrogen  and  nature  restoration  objectives, mainly 
due to implementation gaps, insufficiently defined 
measures  and  lack  of  structural  expansion  of 
natural  areas.  Additional  structural  measures  and 
faster  implementation  are  thus  needed  to  meet 
nitrogen  and  nature 
restoration  objectives. 
Investment needs for biodiversity are estimated to 
be  at  least  EUR  1.51  billion  per  year  for  2021–
2027  (346),  including  EUR    957  million  for  Natura 

represents  progress  compared 

2000  and  other  nature  management  (347)  and 
nature  restoration,  and  EUR    553  million  for 
sustainable  soils  and  other  agricultural  nature 
management  (348).  The  existence  of  a  biodiversity 
investment gap is recognised, but its quantification 
will  require  future/further  work  (e.g.  updated 
estimates  on  available  financing).  Cost  recovery 
remains  incomplete  for  water  quality  measures, 
and no plans exist to tax fertilisers and pesticides 
despite Commission recommendations (349). 

Sustainable agriculture and land use 

The Netherlands’ carbon removals are in line 
with the level of ambition needed to meet its 
2030  target  for  land  use,  land  use  change 
and  forestry  (LULUCF).  In  the  Netherlands  the 
LULUCF  sector  is  a  net  source  of  GHG  emissions, 
with  agricultural  land  being  the  main  contributor. 
Since 2018, there has been a modest reduction in 
LULUCF  emissions.  To  meet  its  2030  LULUCF 
target,  additional  carbon  removals  of  -0.4  million 
tonnes of CO2 equivalent (CO2eq) are needed (350). 
Projections  covered  by  the  latest  Climate  Action 
Progress  Report  show  a  slight  surplus  over  the 
target  of  around  0.2 MtCO2eq  for  2030 (351). 
However, more recent projections indicate that the 
country has only an approximately 35% chance of 
meeting 
its  LULUCF  objective  with  existing 
measures and an approximately 60% chance with 
additional  measures,  indicating  a  need  to  closely 
monitor  the  situation  (352).  Further  investments  in 
healthy  forests  and  soils  are  key  to  building 
resilient  biobased  product  value  chains  and 
enabling  a  growing,  competitive  EU  bioeconomy. 
Continued improvements in the monitoring system 
of net removal data and projections will be crucial 

more  haste  with  tackling  nitrogen  issues]. NOS (in  Dutch). 
Case 
22 January 2025. 
ECLI:NL:RBDHA:2025:578,  District  Court  of  The  Hague, 
C/09/651046 / HA ZA 23-641. 

Retrieved 2 February 2025. 

(344)  Societal  costs  of  agriculture  in  the  Netherlands  (estimated 
around  EUR  18.6  billion  per  year)  exceed  its  annual 
economic  returns  (valued  at  EUR  13.3  billion  per  year) 
.20251016-The-Hidden-Bill-final.pdf. 

(345)  Analysis on the coalition agreement package, drafted by the 
NL  Bureau  for  Economic  Policy  Analysis  (CPB)  and  the  NL 
Environmental Assessment Agency (PBL), 20.2.2026, Link 
(346)  European Commission, ‘Financing Natura 2000 – Prioritised 
action  frameworks’,  European  Commission  website,  Link, 
including  additional  information  and  clarification  received 
from the authorities of the Netherlands. 

(347)  European Commission: Directorate-General for Environment, 
report, 
Biodiversity  Financing  and  Tracking  –  Final 
Publications  Office  of  the  European  Union,  Luxembourg, 
2022, Link. 

(348)  Proposal for a Directive of the European Parliament and of 
the Council on soil monitoring and resilience (Soil Monitoring 
Law) COM(2023) 416 final of 5 July 2023, Link. 

(349)  European  Commission,  Greening  the  European  Semester  – 
Resource and Pollution Taxes (2025), Annex 6, Netherlands 
(page 299). 

(350)  National LULUCF targets of the Member States in line with 

Regulation (EU) 2023/839. 

(351)  Climate action progress report 2025.  
(352)  Klimaat- en Energieverkenning 2025 | Planbureau voor de 

Leefomgeving. 

88 

 
 
 
in  supporting  timely  and  effective  action  in  the 
sector. 

Dutch agriculture is still a notable source of 
greenhouse  gas  emissions  and  continues  to 
have  a  significant  impact  on  air,  water  and 
soils.  In  2024,  agriculture  generated  24,8  million 
tonnes of CO2eq. The Netherlands is not on track 
in terms of reducing agricultural sector emissions, 
with  projected  GHG  emissions  of  21.9  Mt  CO2eq 
compared  to  the  national  sectoral  2030  emission 
reduction target of 17.9 Mt CO2eq (353). Additional 
efforts  are  therefore  needed  to  reduce  emissions 
in the sector. 

Agriculture  continues  to  exert  significant 
pressure  on  water  and  soils  (354).  The  utilised 
agricultural  area  (UAA)  in  the  Netherlands  has 
been  relatively  stable  but  on  a  slight  downward 
trend in recent years, reaching 1.8 million hectares 
in  2023.  However,  the  Netherlands’  soils  were 
significantly  impacted  by  nutrient  loss,  mainly 
from mineral  fertilisers  and manure.  This poses  a 
significant  environmental  concern  and  a  threat  to 
human  health.  This  is  reflected  in  the  country’s 
nitrogen balance of 132 kg of nitrogen per hectare 
of  UAA  in  2023,  reduced  since  2022  and  2018 
though.  Despite  the  substantial  reduction  by  32% 
compared to 2018 value, the balance remains far 
the highest in the EU. The  Netherlands’ functional 
urban  area  has  considerably  expanded  in the  last 
years,  with  net  land  taken  between  2018-2021 
accounting  for  1 186  parts  per million  (ppm)/year 
of  the  total  urban  surface  of  the  country.  Most 
land  has  been  taken  from  pastures  (52%)  and 
arable land (37%). This ongoing ‘land take’ and the 
associated  soil  sealing  cause 
resilient 
ecosystems,  decreased  carbon  sequestration  and 
impaired  flood  protection  (355).  The  Netherlands  is 
its  ammonia  emissions. 
on  track  to  reduce 
Ammonia  emissions  reported  for  the  year  2023 
indicate  that  the  agriculture  sector  is  responsible 
for 90% of the total national emissions (105 Gg). 
Within this sector, livestock has the highest share 
(72.5%).  The  national  planning  bureau  (PBL) 
expects that the Netherlands will  comply with the 
reduction  of  ammonia,  notably  due  to  the  end  of 

less 

(353) Klimaat- en Energieverkenning 2025 | Planbureau voor de 

Leefomgeving.  

(354) For more information, see this link. 
(355)  EEA,  Land  take  and  land  degradation  in  functional  urban 

areas, 2022. Link. 

stations 

recorded 

reduction 

the  derogation  under  the  Nitrates  Directive  (356). 
remain  significant. 
Water  quality  pressures 
Between  2016  and  2019,  14%  of  groundwater 
monitoring 
nitrate 
concentrations  above  50 mg/l,  exceeding  safe 
thresholds  for  drinking  water.  Although  livestock 
density  has  declined,  the  livestock  density  index 
remained 3.31 in 2023, the highest in the EU (357). 
A  12% 
in  agricultural  ammonia 
emissions  between  2018  and  2023(358)  indicates 
recent  progress  in  emission  control.  However, 
under  the  National  Emission  Ceilings  Directive 
(NEC  Directive),  compliance  is  assessed  against 
the  2005  baseline  year;  according  to  the  RIVM 
inventory,  emissions  in  recent  years  are  around 
24%  lower  than  in  2005(359),  indicating  that  the 
reduction 
Netherlands 
commitments.  According  to  the  latest  projections, 
the  Netherlands  is  on  track  (360)  to  meet  its 
ammonia  emission  reduction  commitments  for 
2030 onwards. In 2023, no exceedances above the 
limit values established by the Ambient Air Quality 
Directive  were  registered.  However,  despite  this 
compliance,  nitrogen-related  pressures  persist, 
notably  in  the  form  of  nitrate  pollution  and 
excessive nitrogen deposition, indicating remaining 
gaps in nutrient management. 

complies  with 

its 

levels 

Pesticide  contamination  remains  a  critical 
issue,  with  52%  of  river  water  bodies 
exceeding regulatory thresholds for pesticide 
residues  (361).  Between  2018  -  2023,  pesticides 
were detected in 65% of rivers and 57% of lakes 
at 
The 
Netherlands  has  one  of  the  highest  rates  of 
pesticide  use  per  hectare  in  Europe  –  7 kg  per 
hectare of arable land (362) – and the severe impact 
on Dutch nature and the health of the Netherlands 
is  demonstrated by  numerous  recent  studies  (363). 
In  regions  such  as  Friesland,  Gelderland  and 

thresholds. 

exceeding 

the 

(356)  PBL-raming  2030:  EU-emissiedoelen  luchtverontreiniging 
op schema, nationale doelen stikstofdepositie op natuur ver 
buiten bereik | Planbureau voor de Leefomgeving. 

(357) Eurostat, [ef_fsi_lskds] Livestock density,  
(358) EEA, Air pollutant emissions data viewer (Gothenburg 

Protocol, Air Convention) 1990-2023. 

(359) Informative Inventory Report 2025, Emissions of 

transboundary air pollutants in the Netherlands 1990–2023 

(360) EEA, Magnitude of emission reductions (percentage) 
required by EU Member States to meet their emission 
reduction commitments for 2030 onwards, based on 2023 
data, 2025. 

(361) EEA, Pesticides in rivers, lakes, and groundwater in Europe, 

2024. 

(362) Pesticide use per hectare of cropland, 2023 
(363) Water Framework Directive: time is running out - KWR. 

89 

 
 
 
Limburg,  the  nutrient  and  pesticide  loads  remain 
high  and  compliance  with  EU  water-quality 
standards remains challenging (364). Pesticides not 
only  threaten  aquatic  ecosystems  but  also  pose 
long-term 
through 
contaminated drinking water and food chains. 

to  human  health 

risks 

Soil  contamination  is  also  widespread.  The 
Netherlands  ranks  second  in  the  EU,  with  more 
than  10  contaminants  detected  in  34%  of  soils. 
Excessive  nutrient  concentrations  affect  around 
88% of agricultural land, with 69% of the national 
territory  exceeding  50 mg/kg  of  phosphorus  and 
63% 
nitrogen. 
Unsustainable soil erosion affects 16% of national 
territory, corresponding to 63% of cropland (365). 

exceeding 

50 kg/ha 

of 

The  Netherlands  is  taking  steps  towards  a 
more  sustainable  food  system.  In  2022,  7.2% 
of  agricultural  land  contained  landscape  features 
such  as  woods  or  non-productive  grasslands, 
above  the  EU  average  of  5.6%  (366).  However, 
organic  farming  accounted  for  only  5.06%  of 
agricultural land in 2024, the fourth lowest  share 
in  the  EU,  well  below  the  EU  average  (367).  The 
Netherlands  therefore  remains  far  from  the  EU 
target of 25% organic farming by 2030. 

(364) European  Commission,  Greening  the  European  Semester  – 
Resource  and  Pollution  Taxes  (2025),  Annex  6,  Netherlands 
(page 302). 

(365) Commission  staff  working  document  –  Impact  assessment 
report: Annexes – Accompanying the proposal for a directive 
of  the  European  Parliament  and  of  the  Council  on  soil 
monitoring  and  resilience  Soil  Monitoring  Law),  SWD(2023) 
417 final of 5 July 2023, link. 

(366) European  Commission, Land  Use/Land  Cover  Area  Frame 
Survey; Landscape  features  in  agricultural  land:  what  is  the 
extent?, p. 34, Figure 14 (map).  
(367) Eurostat, Area under organic farming. 

90 

 
 
 
Table A10.1:Key Adaptation Indicators 

(1)  EFFIS (European Forest Fire Information System). Link. 
(2) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters, based on modelling of the risk from floods, 
wildfires and windstorms and on the insurance penetration rate. Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2025, Dashboard on insurance protection gap 
for natural catastrophes. 
(3) This measures total water consumption as a percentage of the renewable freshwater resources available for a given territory and period. Values above 20% are 
generally considered to be a sign of water scarcity, while values equal to or greater than 40% indicate severe water scarcity. 
(4) European Commission, 2024, Seventh Implementation Report from the Commission to the Council and the European Parliament on the implementation of the Water 
Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third River Basin Management Plans and Second Flood Risk Management Plans). 
(5) Indicator refers to concentrations of nitrate (NO3) in groundwater, measured as milligrams per litre (mgNO3/L). Nitrate can persist in groundwater for a long time 
and accumulate at a high level through inputs from anthropogenic sources (mainly agriculture). The EU drinking water standard is limited to 50 mgNO3/L to avoid 
threats to human health. 
(6) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2025 greenhouse gas inventory submission. 2030 
value of net greenhouse gas removals as in Regulation (EU) 2023/839 – Annex IIa. 
Sources: Eurostat, EEA and JRC 

91 

Climate adaptation and preparedness:EU-27201920202021202220232024latest dataDrought impact on ecosystems5.1516.91017.880-2.76[area impacted by drought as % of total]Forest fires burned area (1)-          822          -          274          31            -           354 510     [burned area in ha. per year]Economic losses from extreme events50            567          847          822          119          56            40 452       [EUR million at constant 2022 prices]Insurance protection gap (2)---2              2              2               -[composite score between 0 and 4]Sub-national climate adaptation action5              5              5              5              5              5               34               [% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:EU-27201920202021202220232024latest dataWater Exploitation Index Plus, WEI+ (3)2.87         2.96         2.32         3.99         2.75         -4.53            [total water consumption as % of renewable freshwater resources]Water productivity88            86            95            96            --151[EUR per m3]Water abstractionWater abstraction by source (% from surface water)86.39%85.90%87.54%86.14%--Water abstraction by sectorAgricultureElectricity coolingManufactu-ringPublic water supplyMining and QuarryingConstru- ction 1.60%61.91%23.64%12.85%0.00%0.00%Status of water bodies (4)[% of water bodies in a good status]Surface water bodies (ecological)-----0%38%Groundwater bodies (quantitative)-----96%93%Nature restoration:EU-27201920202021202220232024latest dataEcosystem dependency---44%--44%[% of direct dependency]Protected area22.722.722.722.726.526.4[% of terrestrial protected areas]Invasive alien species (IAS)-----5929.2[number of IAS of Union concern]Damage cost of IAS----2.861.69[EUR billion]Eutrophication 441441295[AAE of area at risk of euthrophication]Sustainable agriculture and land use:EU-272012-20182018-2021latest dataYearly net land taken by Member State897          1 186       670            [ppm of total urban surface per Member State]Land conversion in functional urban area [% of total land taken from 2018-2021]Arable land37%Complex and mixed cultivation0%Forests3%Herbaceous vegetation associations2%Open spaces with little or no vegetation0%Pastures53%Permanent crops0%Water5%Wetlands0%201920202021202220232024latest dataNitrates in groundwater (5)10.99.68.38.38.3[mgNO₃/l]Livestock density3.453.310.75(number of livestock units per hectare of utilised agricultural area)Ammonia emissions 91%91%91%91%90%-94%[% of total utilised agricultural area]Pesticide contamination on rivers and lakes water bodiesrivers65%27%[% of monitoring sites with pesticides exceeding thresholds, 2018-2023]lakes57%18%Pesticide contamination in soil 74%57%[% of samples with a concentration over 0.5 mg/Kg⁻¹]Net greenhouse gas removals from LULUCF (6)3707.23321.43378.63470.23804.5--198 421 [ktCO₂-eq] 
 
      
 
FAIRNESS 
ANNEX 11: LABOUR MARKET 

although 

structural 

The  Dutch  labour  market  remains  resilient, 
with  high  employment  and  participation 
rates, 
pressures 
increasingly  weigh  on  competitiveness.  The 
2025  country-specific  recommendations  for  the 
Netherlands  highlighted  the  challenges  related  to 
labour market segmentation and persistent labour 
and skills shortages. Unemployment has edged up 
from  historically  low  levels  in  recent  years,  while 
remaining  low  overall.  Labour  shortages  have 
eased  somewhat  from  their  peak  but  remain 
among  the  highest  in  the  EU.  Labour  and  skills 
shortages  continue  to  constrain  firms’  capacity  to 
expand  production  and  economic  activity,  while 
the 
labour  market 
upskilling and mobility needed to tackle shortages 
in  high-productivity  sectors  and  those  linked  to 
societal  challenges.  Job  quality  concerns  persist 
for certain groups, particularly mobile and migrant 
workers 
low-wage  sectors  with  precarious 
working  conditions.  Addressing  these  challenges 
will  be  crucial  to  ensuring  an  inclusive  labour 
and 
market  while 
competitiveness. 

fragmentation  hampers 

productivity 

boosting 

in 

The labour market continues to perform well 
overall  despite  signs  of  a  gradual  cooling. 
The  labour market  remained  strong in  2025,  with 
the employment rate broadly stable at 83.4%, one 
of  the  highest  in  the  EU  and  well  above  the  EU 
average of 76.1% and the national 2030 target of 
82.5%.  Following  a  modest  increase  in  2024, 
unemployment rose further from 3.8% in January 
2025 to 4% in January 2026, but it was still at a 
historically low level (368). The increase was largely 
driven  by  a  rise in the  number  of people  entering 
the labour market, outpacing employment growth. 
Labour  market  participation  is  still  high,  including 
for  women  (the  employment  rate  for  this  group 
stood  at  79.6% in  2025  compared  with  71.3%  in 
the  EU).  However,  part-time  employment  remains 
widespread  in  this  group,  although  it  is  largely 
voluntary.  The  share  of  young  people  neither  in 
employment  nor 
training 
increased to 4.9% in 2024, still among the lowest 
in  the  EU,  including  for  young  persons  with 
disabilities.  After  a  decade  of  subdued  outcomes, 
labour  productivity  showed  a  mild  rebound  in 

in  education  and 

(368) Euro area unemployment at 6.1% - Euro indicators - 

Eurostat. 

2025  (369),  but  structural  productivity  growth 
remains  constrained  by  several  factors,  including 
continued  expansion  of  employment 
low-
productivity sectors and high prevalence of flexible 
work  arrangements.  Removing  these  structural 
bottlenecks  will  be  essential 
to  supporting 
sustainable  growth  and  competitiveness,  while 
ensuring sufficient labour supply for the green and 
digital transitions. 

in 

call 

and 

upskilling 

recommendations 

Labour  shortages  are  still  a  significant 
constraint  on  economic  activity.  The  2025 
country-specific 
for 
measures  to  tackle  labour  and  skills  shortages, 
including by mobilising underused labour potential, 
strengthening 
reskilling 
opportunities  and  facilitating  mobility  towards 
high-productivity  sectors  and  sectors  linked  to 
societal  challenges.  Despite  some  easing  from  its 
5%  peak  in  Q2-2022,  the  job  vacancy  rate  stood 
at 4.0% in Q4-2025, still one of the highest in the 
EU  (EU:  2.1%).  National  data  also  point  to  a 
gradual  easing  of  labour  market  tightness,  with 
the  number  of  unemployed  people  again 
exceeding  the  number  of  vacancies  since  mid-
2025 (370).  While 
skills 
mismatch  (371)  and  overqualification  rate  remain 
low,  shortages  persist  across  several  sectors  (372), 
notably 
in  Q4-2025), 
professional,  scientific  and  technical  activities 
(5.0%),  accommodation  and  food  services  (4.3%) 
and ICT (4.8%).  This is also reflected in the share 
of  employers  reporting  labour  shortages as  a 
major  factor  limiting  production  (373).  In  Q1-2026, 
this  share  was  38.6%  in  services,  27.8%  in 
industry and 20.7% in construction, all above pre-
pandemic levels.  

the  macroeconomic 

construction 

(7.1% 

(369) Labour productivity in the Dutch economy up by 2.4 percent 

in 2025 | CBS. 

(370) Spanning op de arbeidsmarkt | CBS. 

(371)The macroeconomic skills mismatch indicator measures the 
discrepancies between employment outcomes for workers 
with low, medium and high levels of skills (represented by 
qualification levels, with ISCED 0-2– low, 3-4 – medium and 
5-7 – high). 

(372) See Eurostat for sectoral differences. 

(373) Source: European Business and Consumer Surveys. 

92 

 
 
 
 
 
 
 
 
Graph A11.1: Job vacancy rates by sector (2019-
2025) 

(1) Job vacancy statistics by NACE Rev. 2 activity - quarterly 
data 
Source: Eurostat 

Annex 15), 

Structural  labour  and  skills  shortages  may 
also  slow  the  green  and  digital  transitions. 
Several  structural  factors  continue  to  underpin 
labour and skills shortages, including demographic 
labour  supply  growth  and 
ageing,  slowing 
persistent  productivity  constraints  in  parts  of  the 
economy.  According  to  long-term  projections  by 
the  Dutch  Central  Planning  Bureau,  workforce 
growth  is  expected  to  be  close  to  zero  in  the 
coming  decades,  which  is  expected  to  weigh 
particularly  heavily  on  sectors  such  as  healthcare 
transport, 
(see 
manufacturing 
administration. 
Uncertainties around future migration inflows may 
constrain labour supply even further. At the same 
time,  a  substantial  share  of  employment  growth 
over  the  past  decade  has  occurred  in  low-
productivity sectors (374), food processing and basic 
services,  affecting  aggregate  productivity  growth 
(375).  The  government  has  taken  steps  to  address 
labour and skills shortages through a combination 
of  activation,  skills  development  and  improved 
into  the 
matching  measures.  Efforts  to  tap 
focus 
labour  potential 
remaining  underused 
primarily  on 
refugees  and  asylum  seekers, 
including targeted integration pathways, employer 

education, 
public 

and 

(374) Labour Market and Wage Developments Review 2025. 

(375) Dynamics, Productivity, and Innovation in the Dutch Economy 

| CPB Website. 

93 

and 

learning 

supporting 

development 

sector-specific 

support  and  pilot  schemes  combining  work  and 
integration. Upskilling and reskilling are supported 
paths, 
through 
(a 
complemented  by  SLIM  training  subsidies 
scheme 
skills 
development  in  SMEs)  in  key  sectors  affected  by 
shortages.  These  measures  are  complemented  by 
the  ongoing  reform  of  regional  labour  market 
services.  Measures  to  further  increase  labour 
supply  remain  relevant,  including  enhancing  job 
quality  and 
improving  work-life  balance  for 
parents  and  carers,  notably  through  reforms  to 
thereby 
childcare  affordability  and  access, 
facilitating  an  increase  of  the  number  of  hours 
worked.  Together  with  sustained  investment  in 
innovation 
productivity-enhancing 
technologies,  such  measures  could  help  ensure 
adequate labour supply in sectors facing structural 
shortages  and  support  sustainable  and  inclusive 
growth. 

and 

and 

self-employment 

the  EU  average 

total  employment 

Labour  market  segmentation  is  still  a  major 
structural  challenge.  The  2025  country-specific 
recommendation  calls  for  reducing  incentives  for 
the  use  of  flexible  and  temporary  contracts. 
Despite a slight decrease from the 2024 level, the 
use  of  flexible  employment,  including  temporary 
contracts 
without 
employees,  continues  to  be  very  high.  The  shares 
of  flexible  and  temporary  contracts  remain  far 
above 
(22.3%  and  11.5% 
respectively in 2025), as does the number of self-
employed  people  without  employees  (10.9%  vs 
7.6%  of 
in  2025).  The 
prevalence  of  flexible  employment  continues  to 
labour  market  segmentation,  driving 
reinforce 
down  employers’  investment  in  their  employees’ 
skills, while leaving workers at the margins of the 
labour  market  more  exposed  to  in-work  poverty 
and  social  exclusion.  It  may  also  slow  progress 
towards  the  green  and  digital  transitions,  as 
workers  in  flexible  arrangements  tend  to  receive 
less  employer-provided  training  and  may  have 
into  higher-
fewer  opportunities 
productivity  occupations.  To  address  perverse 
incentives  for  the  use  of  self-employment  and 
create  a  more  level  playing  field  for  employees, 
the  recovery  and  resilience  plan  introduced  a 
gradual reduction of the tax deduction for the self-
employed  and  ended  the  tax  administration’s 
enforcement  moratorium 
self-
employment.  The  reduction  of  the  tax  deduction 
started in 2023 and is continuing gradually, while 
the  moratorium  ended  in  2025.  By  contrast,  two 
other  measures  in  the  plan,  that  is,  (i)  the 

to  move 

bogus 

on 

23456782019-Q32020-Q22021-Q12021-Q42022-Q32023-Q22024-Q12024-Q42025-Q3ServicesIndustryConstructionTotal 
   
 
introduction  of  mandatory  disability  insurance  for 
the  self-employed  and  (ii)  the  bill  clarifying  what 
an  employment  relationship  is,  including  a  legal 
presumption  of  an  employment  relationship,  have 
been  delayed  and  remain  under  preparation.  The 
legislation  to 
government  has  also  proposed 
strengthen  job  security  for  workers  in  flexible 
employment, for instance by abolishing zero-hours 
contracts, introducing more predictable bandwidth 
contracts and improving protections for temporary 
agency workers. Separately, legislation introducing 
a  mandatory  licensing  system  for  temporary-
employment  agencies  has  been  adopted  and  will 
enter into force in 2027. 

The 

Despite  a  high  participation  rate,  access  to 
quality  employment  remains  uneven  across 
groups. 
country-specific 
2025 
recommendations also call  for better mobilisation 
of  underused  labour  potential.  People  with  low 
levels  of  skills,  people  with  a migrant  background 
and  persons  with  disabilities  continue  to  face 
difficulties  in  securing  stable  and  well-paid  jobs. 
Workers  on  flexible  and  temporary  contracts  are 
concentrated  in  the  low-skilled,  low-productivity 
sectors,  which  contributes  to  lower  earnings  and 
significantly higher in-work poverty risk than in the 
case of workers on permanent contracts. Part-time 
work  is  widespread,  particularly  among  women 
(60.2% vs 27.5% in the EU in 2025), mainly due to 
care  responsibilities.  Although  involuntary  part-
time work is rare, and the gender employment gap 
is  below  the  EU  average  (7.6  pps  vs  9.6  pps  in 
2025),  this  results  in  one  of  the  widest  gender 
gaps in part-time work in the EU (41.3 pps vs 19.7 
pps) and a substantial gender pension gap (29.5% 
vs  23.9%).  While  the  employment  rate  of  people 
born  outside  the  EU  is  above  the  EU  average 
(68.8%  vs  66.0%  in  2025),  the  gap  separating 
them from native-born workers remains more than 
twice the EU average, reflecting lower educational 
outcomes and discrimination affecting both people 
born outside the EU and native-born workers with 
limited 
a  migrant  background,  as  well  as 
recognition  of  foreign  qualifications.  A  recent 
analysis  points  to  a  still  substantial  untapped 
labour  potential 
the 
effectiveness  and  reach  of  existing  measures  will 
need  to  be  improved  and  closely  monitored.  The 
disability  employment  gap  has  increased  in  2025 
(24.3 pps vs 20.9 pps in 2024) and is around the 
EU  average,  while  the  Netherlands  has  not  set  a 

(376),  suggesting 

that 

(376) Adviesraad Migratie, 2025. 

target  for  improving  the  employment  rate  of 
persons with disabilities.  

in 

instability: 

labour-intensive  and 

Non-native  workers  are  disproportionately 
affected  by  poor  job  quality  and  working 
conditions.  EU  mobile  and  migrant  workers  are 
over-represented 
low-
productivity  sectors  such  as 
logistics,  meat 
processing  and  horticulture.  While  present  across 
the  country,  these  sectors  are  concentrated  in 
specific  regional  clusters,  including  logistics  hubs 
in Noord-Brabant and Zuid-Holland, agro-industrial 
areas in Gelderland, and greenhouse horticulture in 
Westland  (Zuid-Holland).  Many  of  these  workers 
are  employed  through  temporary  work  agencies, 
accounting  for  around  half  of  all  international 
workers  in  these  sectors (377).  These  workers  face 
substantially  higher  contractual 
in 
2025,  21.3%  of  Dutch  nationals  were  on  limited-
duration  contracts,  compared  with  29.1%  of 
mobile EU workers and 44.9% of migrant workers. 
Income  levels  are  lower  and  exposure  to  in-work 
poverty markedly higher, especially among non-EU 
nationals.  In-work  poverty  stood  at  4.5%  for 
nationals in 2025, compared with 6.8% for mobile 
EU workers and 24.3% for migrant workers. These 
rates  rose  sharply  during  the  economic  slowdown 
in 2023 for both mobile EU workers (to 9.7%) and 
migrant  workers  (to  23.1%),  while  remaining 
relatively stable for Dutch nationals. This indicates 
a  pronounced  cyclical  vulnerability 
linked  to 
weaker job security, higher dependence on agency 
work and poorer working and living conditions. The 
Dutch  Safety  Board  estimates  that  at 
least 
200 000  low-paid  EU  mobile  workers  are  in  a 
structurally  vulnerable  position,  including  a  higher 
risk of workplace accidents compared with native-
born workers in similar jobs. These patterns reflect 
persistent  risks  of  poor  working  and 
living 
some  mobile  and  migrant 
conditions 
workers (378)(379). Not only does this affect workers’ 
well-being,  but 
it  also  generates  downward 
competition  on  labour  standards,  disadvantaging 
employers  who  invest  in  stable  contracts  and 

for 

(377) ABU & NBBU, 2024; SER, 2025. 

(378) Onderzoeksraad voor Veiligheid, 2025. 

(379) In the Netherlands, employers are legally allowed to deduct 

up to 25% of the statutory minimum wage when 
accommodation is provided as part of remuneration. Recital 
29 of Directive (EU) 2022/2041 on adequate minimum 
wages expressly states that deductions for allowances in 
kind, for example accommodation, are very likely to be 
disproportionate. 

94 

 
 
 
lower-income  households.  These  positive  wage 
developments are supported by a well-established 
system  of  collective  bargaining  and  social 
dialogue,  characterised  by  regular  consultation  of 
social  partners  within  the  established  tripartite 
framework  (the  ‘Polder  model’),  notably  through 
the  Social  and  Economic  Council  of 
the 
Netherlands.  

and 

towards 

identified 

intensity  of 

reflecting  progress 

job  creation  has  been 

In  2025,  employment 
energy-intensive 

The green and digital transitions are shaping 
skills 
employment 
patterns 
requirements. 
in  the 
industries 
Netherlands’ 
represented 1.2% of total employment (EU: 3.5%). 
At  the  same  time,  a  significant  potential  for 
further 
in 
renewable energy sectors, particularly in wind and 
solar  electricity  generation.  Labour  shortages 
remain  particularly  acute  in  construction,  a  sector 
of  key  importance  to  the  green  transition.  The 
the 
greenhouse  gas  emission 
workforce  has  declined  markedly,  from  20.4 
tonnes  per  worker  in  2014  to  13.6  in  2024  (EU: 
12.0), 
climate 
neutrality.  The  ICT  sector  is  well  developed,  with 
ICT  specialists  accounting  for  7%  of 
total 
employment in 2024 (EU: 5%). However, shortages 
of technically skilled staff continue to impede the 
digital transition, and significant gender disparities 
persist, with women accounting for only 18.7% of 
ICT specialists in 2024. In this context, appropriate 
skills  are  crucial  for  successful  labour  market 
transitions,  particularly  in  sectors  crucial  to  the 
transformation 
(see  Annex 13).  The  Dutch 
population  nonetheless  has  a  high  level  of  digital 
skills,  with  83.6%  of  individuals  aged  16-74 
possessing  at  least  basic  digital  skills  in  2025, 
compared  with  an  EU  average  of  60.4%.  To 
support  a  fair  green  transition,  several  policy 
including 
instruments  have  been  adopted, 
measures under the Just Transition Fund to upskill 
workers  to  prepare  them  for  green  jobs  and 
mitigate  transition-related  risks  for  vulnerable 
groups. The Action Plan for Green and Digital Jobs 
aims 
labour  market 
skills  and 
participation, although further targeting of workers 
most  affected  by  the  transition  would  strengthen 
its impact. 

to  boost 

decent  housing.  Some  steps  have  been  taken  to 
address  these  risks,  notably  through  the  adoption 
of  legislation  introducing  a  mandatory  licensing 
system for temporary work agencies, which is set 
to  enter  into  force  in  2027  and  to  be  enforced 
from  2028.  However,  tackling  these  issues  may 
require stronger enforcement of labour standards, 
monitoring  accountability  along  subcontracting 
chains,  requiring  clearer  certification  of  adequate 
employer-  or  agency-provided  accommodation, 
closing  gaps 
to 
information,  as  well  as 
introducing  effective 
complaints  mechanisms  and  basic  services,  while 
supporting labour mobility into higher-productivity 
sectors and transition-related occupations.  

registration  and  access 

in 

Graph A11.2: Cyclical effects on in-work poverty 
among native, mobile and migrant workers 

Source: Eurostat 

Labour  market  tightness  has  contributed  to 
robust wage growth in the Netherlands since 
2023.  Annual  growth 
in  compensation  per 
employee  stood  at  6.6%  in  2024,  4.7%  in  2025 
and  is  projected  at  3.8%  in  2026.  In  real  terms, 
wages  grew  by  3.2%  in  2024,  1.4%  in  2025  and 
growth is forecast to have reached 0.5% in 2026. 
However,  these  growth  rates  come  after  the  first 
post-pandemic  period  marked  by  declines  in  real 
wages  due  to  high 
inflation.  From  a  cost-
competitiveness  perspective,  projections  show 
nominal  unit  labour  costs  grew  by  an  average  of 
5.3% per year between 2023 and 2026, above the 
EU average of 4.3%. The statutory minimum wage 
increased  by  7.9%  in  real  terms  between  2020 
and  2026,  boosting  the  purchasing  power  of 

95 

 
  
 
ANNEX 12: SOCIAL POLICIES 

The  Netherlands  continues 
to  perform 
strongly  on  social  outcomes.  Although  overall 
poverty  trends  have improved,  the  risk  of  poverty 
remains  markedly  higher 
for  non-EU-born 
residents,  persons  with  disabilities  and  children 
with  foreign-born  parents.  Persistent  disparities 
between population  groups  and  structural  gaps in 
access to key services pose ongoing challenges. At 
the  same  time,  rising  demand  for  long-term  care 
and  workforce  shortages  are  putting  increasing 
pressure  on  the  sustainability  and  accessibility  of 
country-specific 
The  2025 
care 
provision. 
the 
on 
therefore 
recommendation 
Netherlands  to  improve  the  cost-effectiveness  of 
long-term  care,  including  by  allocating  benefits 
more  efficiently.  Addressing  these  challenges  will 
be essential to ensuring inclusive social outcomes 
and sustained progress towards the national 2030 
poverty reduction target. 

calls 

Graph A12.1: At-risk-of-poverty or social exclusion 
rate and its components 

the 

largest 

poverty 

in-work 

parents 

opportunities, 

around 20.9%, 7.8 pps higher than that of native-
born  Dutch  people;  this  group  includes  EU  mobile 
workers  (380).  These  vulnerable  groups  are  over-
represented  in  precarious  and  flexible  forms  of 
employment and continue to face challenges such 
as  limited  recognition  of  qualifications,  reduced 
job 
and 
discrimination.  The  AROPE  rate  for  children  is 
relatively  low  overall  at  12.7%  (EU:  24.3%),  but 
are 
foreign-born 
children  with 
disproportionately  affected  at 24.4% (EU:  33.8%). 
This  rate  is  nearly  four  times  the  rate  of  6.2% 
observed among children with native-born parents 
(EU:  14.4%).  Participation 
in  early  childhood 
education  and  care  (for  children  aged  0-3)  also 
shows  one  of 
income-related 
disparities  in  the  EU,  with  a  gap  of  40.5  pps 
between children living in poverty and children not 
living  in  poverty  in  2023.  Recent  evidence  also 
shows  significant  variation  in  service  availability 
across municipalities, reflecting differences in local 
capacity that contribute to uneven access to early 
childhood services and family support, particularly 
for low-income (381). Progress towards the national 
2030  target  of  reducing  the  number  of  people  at 
risk  of  poverty  or  social  exclusion  by  163  000 
compared  with  2019  weakened  substantially  in 
2025. After a net reduction of 86 000 persons in 
2024,  the  number  of  people  at  risk  of  poverty  or 
social exclusion in 2025 was only 3 000 below the 
2019  level.  In  this  context,  a  comprehensive 
approach,  as  set  out  in  the  EU  Anti-Poverty 
the  multiple 
Strategy,  could  help  address 
dimensions  of  poverty  and  support  progress 
towards the national anti-poverty target.   

Income inequality remains relatively low. The 
income  quintile  share  ratio  (S80/S20)  declined  to 
3.76  in  2025  (from  4.15  in  2020),  which  is  well 
below  the  EU  average  of  4.62.  Despite  this 
favourable  trend,  the  level  of  real  gross  adjusted 
disposable household income per capita has grown 
slightly less strong in the Netherlands than in the 
EU  since  2008,  reaching  an  index  of  114.86 
compared  to  115.55  in  2025.  However,  wealth 
inequality  remains  comparatively  high,  with  a  net 
wealth  Gini  coefficient  (382),  and  more  recent 
estimates  suggest  the  Netherlands  experienced 
the  largest  increase  in  wealth  inequality  among 

(380) Social Service Index 2025 NL. 

(381) Social Service Index 2025 NL. 

(382) https://www.eurofound.europa.eu/en/publications/all/a-

picture-of-wealth-inequality-across-eu-member-states. 

Source: Eurostat, EU-SILC [ilc_peps01n, ilc_li02, ilc_mdsd11, 
ilc_lvhl11n] 

Although  poverty  levels  remain  relatively 
low,  some  vulnerable  groups  face  higher 
risks.  The  at-risk-of-poverty  or  social  exclusion 
(AROPE)  rate  is  low,  standing  at  15.8%  (EU: 
20.9%).  Nevertheless,  several  population  groups 
continue  to  experience  significantly  higher  AROPE 
rates.  Among  non-EU-born  people  living  in  the 
Netherlands,  35.4%  were  AROPE  (EU:  38.9%), 
which  is  22.3  pps  higher  than  among  native-born 
residents  (EU:  21.3%).  European  citizens  (non-
Dutch) 
in  the  Netherlands  also  faced 
elevated  poverty  risks,  with  an  AROPE  rate  of 

living 

96 

02468101214161820152016201720182019202020212022202320242025% of populationNLAt-risk-of-poverty-or-social-exclusion rateAt-risk-of-poverty rateSevere material and social deprivationPeople living in low work intensity households 
 
  
 
 
 
inequality 

the  (383).  When  pension  wealth  is  taken  into 
is 
account,  measured  wealth 
considerably  lower.  However,  differences  in  life 
expectancy  across 
income  groups  make  the 
distributional  implications  more  complex.  Wealth 
in 
disparities  are  also 
differences 
in  asset  ownership,  particularly 
between homeowners and renters. 

increasingly  reflected 

lower 

increase  vulnerability 

low, 
Energy  poverty  remains  relatively 
regional  and  structural 
although  some 
disparities  persist. 
In  2025,  6.6%  of  the 
population  reported  being  unable  to  keep  their 
homes sufficiently warm (EU: 8.8%), up by 4.2 pps 
since 2021, with much higher rates among people 
at  risk  of  poverty  (21.3%).  Arrears  on  utility  bills 
remain  among the  lowest  in the  EU,  at  2.2% (EU: 
7%).  Energy  poverty  is  more  prevalent  in  regions 
with  older  or  poorly  insulated  housing  stock, 
particularly 
in  parts  of  Groningen,  Friesland, 
Drenthe  and  Zeeland  (384),  and  in  post-war  urban 
incomes  and 
neighbourhoods,  where 
inefficient  dwellings 
to 
energy  price  fluctuations.  Several 
temporary 
measures  have  mitigated  the  impact  of  rising 
energy  costs.  These  include  price  caps,  targeted 
energy  allowances  and  local  ‘energy  fixers’  (385). 
However,  regions  with  structurally  poor  housing 
quality  and  limited  municipal  capacity  struggle  to 
reduce 
sustained 
investment.  From  2026,  the  Social  Climate  Fund 
will  provide  additional  support,  with  EUR 720 
million  allocated  to  the  Netherlands.  The  draft 
social  climate  plan  includes  measures  such  as  an 
expanded  National  Heat  Fund,  a  Public  Energy 
Fund  that  links  income  support  to  renovation 
advice,  and  municipality-led  advisory  and  repair 
teams  ('energy  houses'  and  ‘fix  teams’)  that 
support  vulnerable  households  and  micro-
enterprises.  The  availability  of  public  transport 
does  not  appear  to  be  a  major  issue  at  national 
level.  However,  regional  disparities  persist,  with 
public  transport  services  being  more  limited  in 
certain  regions  such  as  Friesland  than  in  the  rest 
of  the  country  (386).  Transport  fuel  expenditure 

poverty  without 

energy 

under  ETS2  is  projected  to  increase  at  a  rate 
comparable to the EU average. 

to 

for 

protection 

employees 

the  certification  system 

While the legal framework provides for equal 
access 
social  protection,  effective 
In 
coverage  remains  uneven  in  practice. 
sectors  with  a  high  prevalence  of  temporary  and 
agency work, risks of non-compliance and abusive 
practices  persist,  undermining  access  to  social 
rights.  Capacity  constraints  in  labour  inspection 
and enforcement, particularly at local level, remain 
a  challenge.  In  this  context,  effectively  rolling  out 
for 
and  enforcing 
temporary  work  agencies  will  be  important  for 
ensuring that formal rights translate into effective 
protection  for  workers.  Gaps  in  access  to  social 
protection  persist  for  non-standard  workers  and 
self-employed  people.  Although  there  is  broad 
mandatory 
on 
permanent contracts, significant disparities persist 
for  those  in  flexible  or  atypical  work.  Certain 
groups are disproportionately represented in these 
types  of  employment,  especially  in  seasonal, 
agency-based  and  low-paid  jobs.  This  increases 
the  risk  of  fragmented  contribution  histories,  in-
work  poverty  and  reduced  access  to  earnings-
related benefits. Substantial formal coverage gaps 
also remain for self-employed people: around 1.29 
million  are  not  subject  to  mandatory  cover  for 
unemployment  benefits,  paternity  benefits  or 
accidents  at  work,  while  participation  in  voluntary 
schemes  remains  very  limited  (around  17 700 
contributors  in  2023,  or  1.5%  of  self-employed 
workers).  Access  to  social  protection  and  related 
social  services  also  varies  across  regions  and 
local 
municipalities, 
administrative  capacity  and  resources.  Areas  with 
high  inflows  of  mobile  and  migrant  workers  face 
particular  pressure,  which  can  limit  timely  access 
to  registration,  guidance  and  social  assistance  in 
practice, despite formally broad national coverage.  
Although  registration  in  the  municipal  population 
register is not a prerequisite for free movement, it 
remains an important gateway to accessing social 
services  and  social  assistance.  Labour  migrants 
and  EU  mobile  workers  may  also  face  barriers  to 
using  these  services, 
including  administrative 
complexity and limited information (387). 

reflecting  differences 

in 

(383) Global Wealth Report 2025 | UBS Global. 

(384) Netherlands Organisation for Applied Scientific Research 

(TNO). 

(385) Netherlands Organisation for Applied Scientific Research 

(TNO). 

The  Netherlands  is  planning  to  introduce 
mandatory  disability 
insurance  for  self-
employed  people  as part of its  recovery  and 

(386) Data from Commission’s Transport Poverty Hub. 

(387) Social Service Index 2025 NL. 

97 

 
 
 
resilience  plan.    This  reform  aims  to  close  a 
structural  gap  in  income  protection  and  reduce 
disparities  in  social  protection  coverage  between 
employees  and  self-employed,  as  these  can 
incentivise  bogus  self-employment.  However,  the 
reform has not yet been adopted and is expected 
to  enter  into  force  only  later  in  the  decade. 
Additional  national  proposals  seek  to  limit  the 
excessive  use  of  flexible  contracts  and  further 
narrow  gaps  between  employees  and  self-
employed  people.  Nevertheless,  given  the  high 
prevalence  of  flexible  employment  and 
the 
comparatively  weaker  social  protection  for  non-
standard  workers,  disparities  in  coverage  across 
employment  types  remain  a  structural  feature  of 
the Dutch labour market (see Annex 11). 

the 

Ensuring adequate and sustainable long-term 
care  provision  is  a  growing  challenge.  The 
population  aged  65  and  over  is  projected  to  rise 
the  old-age  dependency  ratio 
steadily,  with 
expected  to  increase  from  34.3%  in  2022  to 
56.3% in 2070. Public spending on long-term care 
(health) amounted to 2.90% of GDP in 2023,  the 
highest level in the EU.  Expenditure on long-term 
care  is projected to increase by 1.9 pps of GDP by 
2070  (388).  Demographic  pressures  and  increasing 
care intensity are expected to put further pressure 
long-term  care  system.  Workforce 
on 
shortages  remain  a  structural  constraint.  High 
part-time  employment  rates,  demanding  working 
recruiting  and 
conditions  and  difficulties 
retaining  staff  limit  the  system’s  capacity.  Recent 
findings  from  the  Dutch  interdepartmental  policy 
review  on  labour  migration  further  indicate  that 
reliance on migrant labour is expected to increase 
in  response  to  persistent  staff  shortages  in  the 
coming  years  (389).  Although  the  Netherlands  has 
one  of  the  highest  shares  of  long-term  care 
workers  in  the  EU  (7.8  per  100  people  aged  65 
and  over  vs  EU:  3.3  in  2024),  shortages  remain 
(390). 
particularly  acute 
Strengthening  workforce  sustainability,  enhancing 
home- and community-based care, and improving 
cost-effectiveness  will  be  essential  to  maintain 
accessible,  high-quality  long-term  care  in  the 
years ahead. 

  the  care  sector 

in 

in 

(388) Commission 2024 Ageing Report. 

(389) Netherlands, Ministry of Finance (2025), IBO Arbeidsmigratie 
– Wat werkt voor de toekomst? Available at: rijksfinancien.nl. 

(390) Social Service Index 2025 NL. 

98 

 
 
 
 
 
 
ANNEX 13: EDUCATION AND SKILLS 

The  Netherlands’  long-term  productivity  and 
competitiveness  increasingly  depend  on  its 
ability  to  strengthen  skills  development 
across  the  education  and  training  system. 
The  increase  in  the  share  of  underachievers  in 
reading,  mathematics  and  science  (combined) 
among 15-year-olds between 2018 and 2022 was 
one  of  the  highest  in  the  EU.  Despite  efforts, 
teacher  shortages persist,  affecting  the  quality  of 
education. In recent years, several measures have 
been launched to address declining basic skills, but 
their  impact  is  yet  to  be  seen.  The  low  share  of 
science, technology, engineering and mathematics 
(STEM)  and 
information  and  communications 
technology  (ICT)  graduates  further  exacerbates 
skills  shortages.  Despite  high  participation 
in 
education  and  training  overall,  gaps  in  access  to 
lifelong  learning  and  the  alignment  of  training 
provision with labour market needs persist, limiting 
the  effectiveness  of  upskilling  and  reskilling 
country-specific 
efforts. 
recommendations  addressed  to  the  Netherlands 
called  for  improvements  in  basic  skills,  including 
by addressing teacher shortages, providing tailored 
support  to  disadvantaged  schools,  and  boosting 
participation 
through 
targeted  educational  support  and  career  advice, 
especially for women and students with a migrant 
background. 

in  STEM  programmes 

2025, 

the 

In 

Participation  in  early  childhood  education 
and care (ECEC) is high, but persistent access 
gaps and growing staff shortages pose a risk 
to inclusiveness.  Participation  from  age  three is 
93.6%  (2024),  slightly  below  the  EU  average 
(95%)  and  the  2030  target  (96%).  Access  for 
children  under  three  has  expanded  significantly: 
between  2015  and  2024,  participation  rose  by 
32.6  percentage  points  (pps)  (391),  the  highest 
increase in the EU and well above the 2030 target 
of  45%.  However,  the  participation  gap  between 
disadvantaged  children  and  their  peers  remains 
one  of  the  largest  in  the  EU  (33.9  pp.)  (392).  Staff 
shortages  are  a  major  challenge:  about  one  third 
of childcare facilities face staffing issues, with an 
average  shortfall  of  25%.  This  limits  targeted 

support (393). The government is preparing scheme 
to make childcare nearly free (394). 

parents, 

Basic  skills  are  decreasing,  but  the  share  of 
top  performers  in  mathematics  and  science 
in  the  EU, 
remains  among  the  highest 
highlighting  widening  performance  gaps.  The 
share  of  underachieving  students  in  PISA  almost 
doubled between 2012 and 2022 for mathematics 
and science, and it increased 2.5 times for reading. 
Almost half of foreign-born students underachieve 
in  mathematics  (48.5%),  while  for  native-born 
the 
foreign-born 
students  with 
underachievement  rate  is  lower  (37.9%).  At  the 
same  time,  the  Netherlands  has  the  highest  top 
performance  rate  in  mathematics  in  the  EU,  even 
if  the  share  of  top  performers  has  decreased 
significantly. To address decreasing basic skills, in 
2022,  the  Netherlands  launched  the  ‘Masterplan 
for  basic  skills’  with  a  budget  of  almost 
EUR 2 billion. By  2025,  the  initiative  had  reached 
7800 schools and 95% of all students in primary 
and  secondary  education  (395).  According  to  a 
teacher survey, 80% of primary schools and 60% 
of  secondary  schools  that  participated  in  the  first 
round  of  programme  reported  clear  progress  in 
language and mathematics skills (396). The interim 
evaluation  of  the  Masterplan  is  planned  for  the 
end of the 2025/2026 school year.  

Despite  increased  government  investment  in 
equity  measures,  Dutch  education  continues 
to face significant challenges in ensuring fair 
opportunities  for  all  students.  According  to 
PISA,  the  share  of  learners  from  disadvantaged 
backgrounds  achieving  at  least  a  ‘good’  level  of 
proficiency dropped between 2018 and 2022 from 
29.4%  to  21.7%.  An  evaluation  of  government 
policies  for  equity  in  primary  and  secondary 
education  shows  that  government  spending  on 
equity  measures  doubled  between  2016  and 
2023,  however  equity  outcomes  did  not  improve. 

(393)  Bakker, A-F. Das, L.  de Lange, A. Leseman, P. Varwijk, J. 
(2023) Personeelstekort bij Voorschoolse Educatie 
https://open.overheid.nl/documenten/dpc-
e545e79882de36fe0ac7edf0173493c463952fac/pdf. 

(394) Ministerie van Sociale Zaken en Werkgelegenheid (2025). 

Kamerbrief Kinderopvang.  15 September 2025. [31 322 nr. 
569]. 

(391) Education and Training Monitor 2025, Education and 

(395) Subsidie Verbetering basisvaardigheden | Masterplan 

Training Monitor 2025. 

basisvaardigheden. 

(392) Education and Training Monitor 2025, Education and 

(396)https://www.masterplanbasisvaardigheden.nl/documenten/20

Training Monitor 2025. 

24/12/04/vijfde-voortgangsbrief-tweede-kamer. 

99 

 
 
 
 
 
tracking  and  strong  differentiation 

Early 
in 
secondary  education  are  identified  as  the  main 
factors  contributing  to  education  inequity  (397). 
Starting  from  2024,  students  take  a  literacy  and 
numeracy  test  in  primary  education  aimed  at 
enhancing  equity  (transition  test),  to  give  an 
objective  indication,  alongside  teacher  advice  for 
determining  secondary  education  track  (398).  After 
the first round of test, held in 2024, more students 
secondary 
followed 
education (399); however,  it raised questions about 
comparability and fairness of tests (400).   

higher-level 

tracks 

in 

The level of students’ digital skills is low, but 
measures  to  address  it  are  ongoing.  Most 
Dutch  students  are  low  achievers  in  digital  skills, 
and  students  show  one  of  the  largest  differences 
in  the  EU  based  on  the  level  of  their  parents’ 
education  (401).  To  boost  students’  digital  skills, 
learning  goals  for  digital  literacy  in  primary 
education  and  first-cycle secondary  education  are 
developed  within  the  ongoing  curriculum  reform, 
covering  learning  about  how  artificial  intelligence 
works, the functioning of digital and social media, 
ethical aspects, and how digital media and society 
influence each other.   

Teacher  shortages  are  considerable  and 
impact education quality. In 2022, the Teacher 
Strategy  introduced  several  measures  to  enhance 
the  attractiveness  of  the  profession,  including 
salary  increases.  In  2023,  educational  regions 
were  established  to  address  shortages  in  a  more 
strategic and coordinated manner. The first results 
are visible. In 2025, shortages amounted to 6.3% 
in  primary  schools  (5 760  full-time  equivalents, 
FTEs)  and  3.5%  in  secondary  education  (2 200 
FTEs)  (402).  The  largest  shortages  are  faced  by 
primary  schools  in  the  five  biggest  cities  (11%, 
compared  with  4.8%  outside  these  cities)  and  in 
primary  schools 
for  students  with  special 
education  needs  (7%,  compared  with  6.3%  in 

(397)https://www.rijksoverheid.nl/documenten/rapporten/2024/10/

25/kiezen-voor-kansen-strategische-evaluatie-
kansengelijkheid-in-het-funderend-onderwijs-2017-2023. 

(398) https://open.overheid.nl/documenten/158f6a2b-03c9-4f30-

ba5a-d0d2a7cb89b1/file. 

(399) https://open.overheid.nl/documenten/158f6a2b-03c9-4f30-

ba5a-d0d2a7cb89b1/file. 

(400) Kamerbrief schetst positief beeld van doorstroomtoets maar 

zorgen blijven | PO-Raad. 

(401) 2023 International Computer and Information Literacy Study. 

the  shortage 

regular  schools).  Although  shortages  are  still 
substantial,  the  situation  has  improved  compared 
with  2022,  when 
in  primary 
education  reached  nearly  10 000  (403).  According 
to TALIS 2024 data  (404), the Netherlands has the 
EU’s  highest  share  of  secondary-education 
teachers  who  are  satisfied  with  their  salary  at 
74.1%,  which  is  a  significant  increase  compared 
with  58%  in  2018.  The  main  factors  driving 
teacher  shortages  include  a  tight  labour  market, 
(405)  the  strong  part-time  work  culture:  in  primary 
education,  around  70%  of  teachers  work  part-
time (406).   

Vocational  education  and  training 
(VET) 
supports  strong  school-to-work  transitions, 
despite its limited contribution to addressing 
STEM  skills  shortages.  In  the  Netherlands, 
vocational pathways account for a markedly larger 
share of upper-secondary enrolment than in most 
Member States, with 69.7% of students enrolled in 
programmes  with  a  vocational  orientation, 
compared  with  52.9%  on  average  in  the  EU  in 
2024.  People  who  have  recently  completed  VET 
show  very  strong  labour  market  outcomes,  with 
87.6%  in  employment  in  2025  (EU  average: 
80.2%),  while  exposure  to  work-based  learning 
remains  among  the  highest  in  the  EU,  reaching 
85.4%  of  VET  students.  At  the  same  time, 
participation  in  STEM-oriented  VET  programmes 
remains  limited.  In  2024,  only  19.0  (407).  This 
constrains the ability of the VET system to address 
persistent  shortages 
in  technical  occupations 
linked  to  the  green  and  digital  transitions.  In 
response, the Netherlands is implementing the VET 
Work  Agenda  2023–2027,  strengthening  regional 
partnerships  with  employers,  expanding  modular 
and  micro-credential  provision,  and  adapting  VET 
programmes  and  apprenticeships  to  emerging 
skills  needs,  including  under  the  Action  Plan  for 
Green  and  Digital  Jobs.  Further  progress  will 
depend  on  scaling  up  STEM  provision  in  VET, 
tackling shortages of teachers in technical subjects 
and improving the inclusiveness of STEM pathways 

(403) Scarcity grinds - in brief | Onderwijsraad. 

(404) TALIS 2024 data for the Netherlands should be interpreted carefully 

due to its low reliability linked to low response rate.   

(405) Nieuwe stap bij het stimuleren van meer uren werken in het 

onderwijs | Nieuwsbericht | Rijksoverheid.nl. 

(406) Nieuwe stap bij het stimuleren van meer uren werken in het 

onderwijs | Nieuwsbericht | Rijksoverheid.nl. 

(407) StatLine - Mbo; studenten, niveau, leerweg, studierichting, 

(402) Arbeidsmarktramingen onderwijs 2025. 

regio 2015/'16-2021/'22. 

100 

 
 
 
to  fully  realise  VET’s  contribution  to  productivity 
growth and competitiveness. 

in 

Tertiary  educational  attainment 
the 
Netherlands  remains  among  the  highest  in 
the  EU,  but  the  system  continues  to 
undersupply  STEM  skills,  contributing  to 
persistent shortages in high-demand sectors. 
Among  those  aged  25-34,  55.1%  held  a  tertiary 
degree  (EU  average:  44.2%).  Among  the  non-EU-
born  population,  this  figure  is  47.8%.  The  urban–
rural  gap  in  tertiary  educational  attainment  (aged 
25–34) is below the EU average (20.5 percentage 
points  vs  22  percentage  points),  meaning  that 
young people from rural areas participate in higher 
education  less  often  than  their  urban  peers  (see 
Annex  18).  Students  from  disadvantaged  or  non-
traditional  backgrounds  face  higher  first-year 
dropout and programme switching rates (408). They 
remain  under-represented  relative  to  the  overall 
student population (409). The overall strong tertiary 
attainment does not translate into sufficient STEM 
output.  In  2023,  only  18.6%  of  tertiary  students 
were enrolled in STEM fields, compared with an EU 
average  of  26.9%  and  the  proposed  EU  2030 
target of 32%. Women remain under-represented, 
accounting  for  30.2%  of  STEM  students  (EU 
average:  32.2%).  Specialisation  in  ICT  is  also 
limited,  including  at  doctoral  level,  where  ICT 
enrolment  stood  at  3.6%  in  2023  (EU  average: 
3.8%), below the proposed EU target of 5%. These 
patterns point to structural constraints in the STEM 
pipeline,  despite  high  overall  participation 
in 
tertiary  education,  and  continue  to  weigh  on  the 
supply  of  skills  needed  for  the  green  and  digital 
transitions. 

Persistent skills shortages in key sectors for 
the  green  transition  highlight  challenges  in 
labour 
training  provision  with 
aligning 
market  needs.  Shortages  remain  particularly 
pronounced  in  sectors  that  are  key  for  the 
transition 
including 
construction, energy and manufacturing, where job 
vacancy  rates  are  consistently  above  the  EU 
average  (see  Annex  11).  Nearly  half  of  small  to 
medium-sized 
the 
that  skill  shortages  are 
Netherlands 
hindering their efforts to adopt digital technologies 

enterprises 

neutrality, 

climate 

(SMEs) 

report 

to 

in 

or  green  their  business  activities.  In  2025,  there 
continued  to  be  reported  shortages  of  several 
technical  and  professional  profiles  linked  to  the 
green  transition  and  climate  adaptation,  such  as 
civil  engineers,  systems  analysts  and  welding 
specialists.  While  participation  in  education  and 
training  among  workers 
in  energy-intensive 
industries  is  high  (25.9%  in  2024;  EU  average: 
11.7%),  it  remains  below  the  national  average 
across  all  sectors  (35.6%),  suggesting  further 
scope  to  strengthen  upskilling  and  reskilling 
efforts  in  sectors most  affected  by  the transition. 
labour-market 
targeting  and 
Improving 
relevance  of  training  provision  would  help  close 
skills gaps and support productivity growth against 
the background of the green transition. 

the 

The rate of early leavers from education and 
training increased in 2024. In 2024, the rate of 
early  leavers  from  education  was  7%,  up  from 
6.2%  in  2023,  but  this  is  still  below  the  EU 
average  of  9.4%  and  the  EU  target  of  keeping 
rates  below  9%.  National  data  based  on  the 
number of people aged 12-23 obtaining an upper-
secondary qualification show an improvement. The 
number  of  dropouts  from  secondary  vocational 
education  (middelbaar  beroepsonderwijs,  MBO) 
decreased  from  24 286  in  2022/2023  to  22 308 
in  2023/2024  (410).  The  total  number  of  dropouts 
from secondary education reached 29 163, still far 
above  the  2026  target  of  18 000.  Students  who 
enter  preparatory  secondary  vocational  education 
beroepsonderwijs, 
(voorbereidend  middelbaar 
VMBO)  or  MBO  from  special  secondary  education 
are  particularly  at  risk  of  dropping  out  during  the 
first  few  years  of  upper-secondary  vocational 
education: 60% of them drop out. Under a new law 
planned 
institutions, 
municipalities and regional organisations will have 
to  conclude  collaborative  agreements  on  taking 
additional  measures  in  order  to  prevent  dropout 
and youth unemployment. 

for  2026,  educational 

Skills  intelligence  is  essential  for  a  well-
coordinated  steer  of 
towards 
shortage  areas.  Over  7  in  10  SMEs  report 
difficulties  in  finding  workers  with  the  right  skill 

training 

(408) Social and Economic Conditions of Student Life in Europe. 

Eurostudent 8 Synopsis of Indicators 2021-2024. 

(409) Social and Economic Conditions of Student Life in Europe. 

Eurostudent 8 Synopsis of Indicators 2021-2024. 

(410) OCW (2025c): Ministerie van Onderwijs, Cultuur en 
Wetenschap (OCW): Voortgang actieplan voortijdig 
schoolverlaten. https://www.rijksoverheid.nl/documenten/kam
erstukken/2025/03/24/voortgang-actieplan-voortijdig-
schoolverlaten. 

101 

 
 
 
set (411).  The  Netherlands  combines  a  well-
established  skills  intelligence  system,  such  as  the 
Research  Centre  for  Education  and  the  Labour 
Market,  with  targeted  policy  instruments  to  steer 
training  towards  shortage  areas.  Labour  market 
monitoring  integrates  vacancy  and  employment 
data  with  macroeconomic  and  labour  market 
forecasts to anticipate shortages and surpluses by 
occupation and qualification. This is translated into 
guidance  tools  for  education  providers,  public 
employment service counsellors, and learners. The 
national qualifications framework is referenced to 
Framework, 
the 
supporting  transparency  and  comparability  of 
qualifications.  Building  on  this  evidence  base, 
sectoral development paths are being rolled out to 
link identified bottlenecks to concrete training and 
transition  routes,  notably  in  technical  sectors. 
Developed  jointly  with  social  partners  and  partly 
financed through the SME training subsidy scheme 
(SLIM), this approach strengthens coordination and 
targeting. However, implementation remains at an 
early  stage,  with  limited  scale  and  roll-out  in  key 
technical sectors having only begun in late 2025. 

Qualifications 

European 

Graph A13.1: Adult learning 

(1) Participation in learning in the last 12 months (excluding 
guided on-the-job training (GOTJ)) 
Source: AES 2022 (excluding guided on-the-job training) 

Adult  digital  skills  are  among  the  strongest 
in  the  EU,  but  significant  gaps  persist  for 
vulnerable  groups.  The  Netherlands  has  one  of 
the  highest  shares  of  adults  with  at  least  basic 
digital skills in the  EU (83.3%), well  above the EU 
average (55.6%). However, shortages of advanced 
digital  and  technical  skills  continue  to  constrain 

(411) European Year of Skills - Skills shortages, recruitment and 

the 

force 

labour 

resilience  plan 

supports  digital 

digital  transformation  across  sectors  (see  Annex 
11). Adults with lower levels of education, those in 
non-standard  employment,  older  people,  and 
people  outside 
remain 
significantly less likely to possess adequate digital 
skills or participate in upskilling  (412). The recovery 
and 
skills 
development,  notably  in  secondary  and  higher 
education,  while  the  Action  Plan  for  Green  and 
Digital Jobs provides the overarching framework to 
address  shortages 
technical 
occupations  up to  2030.  The  plan  brings together 
government,  social  partners  and  education 
providers  to  increase  inflows  into  technical  and 
digital  education,  support  reskilling  and  upskilling, 
improve labour market matching  through  sectoral 
strengthen 
development 
coordination.  While  early  implementation  shows 
progress in expanding training pathways, ensuring 
that  adult  digital  upskilling  opportunities  reach 
groups most at risk of digital exclusion remains a 
key challenge. 

in  digital  and 

pathways, 

and 

strong 

overall 

Despite 
performance, 
structural  challenges  in  ensuring  inclusive 
and labour-market relevant lifelong learning 
persist.  In  2022,  56.1%  of  adults  (aged  25-64) 
participated in formal or non-formal education and 
training (excluding on-the-job training), well above 
the  EU  average  and  close  to  the  national  2030 
target of 62%. However, participation had declined 
slightly  compared  to  57.1%  in  2016,  and  more 
recent  data (413)  point  to  a  stagnating  trend. 
Participation  also  remains  uneven:  low-qualified 
adults,  those  on  temporary  or  flexible  contracts, 
people  with  a  migrant  background,  persons  with 
disabilities  and  people  outside  the  labour  force 
participate  significantly  less,  limiting  the  role  of 
training  in  supporting  upward  mobility  and  career 
transitions.  Following  the  abolition  of  the  STAP 
(Stimulering  Arbeidsmarkt  Positie) 
individual 
learning  budget  in  2023,  the  Netherlands  no 
longer provides a general individual entitlement to 
learning.  The  SLIM  subsidy  mainly 
lifelong 
training  and 
supports  employer-based 
firm-
limited  support  for 
specific  needs,  offering 
intersectoral  mobility 
career 
transitions, while the decentralised organisation of 
to  uneven  outreach  for 
support  contributes 

individual 

or 

(412) Network of Experts in Adult Learning, Second Status Report, 

European Commission 2025. 

retention strategies in small and medium-sized enterprises - 
September 2023 - - Eurobarometer survey. 

(413) Data on adult learning participation (in the past 12 months) 
for 2022 and 2024 based on the labour force survey. 

102 

010203040506070802022NLEU 
  
 
 
vulnerable  groups.  Consequently,  access  to  adult 
learning remains closely linked to people’s position 
in  the  labour  market.  Strengthening  inclusive 
access  to  adult  learning  and  better  aligning 
training 
labour  market 
transitions remain key challenges for reaching the 
national 
supporting 
target 
competitiveness. 

opportunities  with 

2030 

and 

in 

invest 

employment 

unfavourable 

in 
The  Netherlands  continues  to 
tackling  labour  shortages  through  targeted 
upskilling and activation measures. Under the 
European  Social  Fund  Plus,  investments  support 
people 
and 
vulnerable  social  situations  to  access  work  or 
training  and  to  activate  untapped  skills  and 
employment  potential.  The  Dutch  recovery  and 
resilience 
investment 
includes 
(Scholingsregeling  WW)  to  upskill  and  reskill 
temporarily  unemployed  individuals  with  a  weak 
initiative,  which 
labour  market  position.  This 
became  operational  in  2023,  provides  financial 
support for at least 8 000 training programmes to 
facilitate  the  labour  market  reintegration  of  the 
target group. 

plan 

an 

103 

 
 
ANNEX 14: SOCIAL SCOREBOARD 

Table A14.1:Social Scoreboard for Netherlands 

Update of 4 May 2026. Members States are categorised based on the Social Scoreboard according to a methodology agreed with 
the EMCO and SPC Committees. Please consult the Annex of the Joint Employment Report 2026 for details on the methodology 
(https://employment-social-affairs.ec.europa.eu/joint-employment-report-2026_en). 
Source: Eurostat 

104 

56.17.483.65.37.63.7683.43.90.5112.315.812.736.824.36.566.50.5Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsSocial protection and inclusionShare of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2025)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2025)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2025)Self-reported unmet need for medical care (% of the population aged 16+, 2025)Disability employment gap (percentage points, population aged 20-64, 2025)Housing cost overburden (% of the total population, 2025)Adult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Equal opportunities and access to the labour marketBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2025)Young people not in employment, education or training(% of the population aged 15-29, 2025)Gender employment gap(percentage points, population aged 20-64, 2025)Income quintile ratio (S80/S20, 2025)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2025)Employment rate(% of the population aged 20-64, 2025)Unemployment rate(% of the active population aged 15-74, 2025)Long term unemployment(% of the active population aged 15-74, 2025)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2024)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2025) 
 
 
 
  
 
 
ANNEX 15: HEALTH AND HEALTH SYSTEMS 

health 

system 

Netherlands’ 
performs 
comparatively well, with high life expectancy 
at birth linked to low levels of treatable and 
preventable  mortality.  Healthcare  spending  in 
the  Netherlands  is  among  the  highest  in  the  EU 
and  primarily  focuses  on  outpatient  services.  The 
country  also  has  a  strong  primary  care  system. 
However, inequalities across most behavioural risk 
factors  and  regarding  participation  in  preventive 
programmes  persist  between  socio-economic 
groups,  potentially  increasing  future  healthcare 
demand. Income-related inequalities in access also 
remain,  affecting  particularly  people  at  risk  of 
poverty  with regards to dental  care. Unmet needs 
for  mental  healthcare  are  also  large  In  addition, 
structural 
certain  healthcare 
professions  further  increase  workloads  and  job 
strain.  

shortages  of 

than the EU average, compared to only 4% higher 
among  men.  The  most  common  cancer  among 
men is prostate cancer, while  breast cancer is the 
most  common  among  women.  The  second  most 
common  cancer  for  both  men  and  women  is 
colorectal  cancer,  and  the  third  most  common  is 
lung  cancer.  This  is  closely  linked  to  tobacco  use 
being the country’s leading behavioural risk factor. 
As  in  other  EU  countries,  the  incidence  and 
in  the  Netherlands  are 
prevalence  of  CVDs 
significantly  higher  among  men  than  women. 
Ischaemic  heart  disease  (also  known  as  coronary 
artery  disease,  caused  by  a  narrowing  of  heart 
arteries) is the most common CVD (414).  

Graph A15.2: Treatable mortality 

Graph A15.1: Life expectancy at birth, in years 

Source: Eurostat (indicator: demo_mlexpec) 

Life  expectancy  at  birth  in  the  Netherlands 
was  slightly  above  the  EU  average  in  2024 
and  is  catching  up  to  its  pre-COVID-19 
pandemic  level  (see  Graph  A15.1).  Women  are 
expected to live 2.8 years longer than men (below 
the EU average gap of 5.2 years). However, Dutch 
women  have  a  lower  life  expectancy  than  the  EU 
average  reflecting  partly  the  legacy  of  higher 
smoking  rates  among  older  cohorts  of  women, 
which  continues  to  influence  current  mortality 
patterns.  Treatable  mortality  is  one  of  the  lowest 
in  the  EU.  In  2023,  cancer  and  diseases  of  the 
circulatory  system 
(‘cardiovascular  diseases’, 
CVDs),  including  ischaemic  heart  disease  and 
stroke,  were  the  leading  causes  of  death.  CVDs 
and  cancer  jointly  account  for  around  half  of  all 
deaths, followed by Alzheimer’s disease and other 
dementias.  Cancer  mortality  is  above  the  EU 
average.  While  men  have  higher  cancer  incidence 
than  women,  cancer  incidence  among  women  in 
the Netherlands  was  estimated  to  be  17%  higher 

Age-standardised death rate - mortality that could be avoided 
through optimal quality healthcare. 
Source: Eurostat (indicator: hlth_cd_apr) 

Preventable mortality was just below the EU 
average 
in  2023.  The  share  of  spending 
allocated to prevention of total health expenditure 
decreased  in  2023  compared  to  2022  despite 
being  still  above  the  EU  average  (5.2%  vs  3.7%). 
Additionally,  participation  in  all  three  population-
based  programmes  for  breast,  cervical  and 
colorectal  cancer  in  the  Netherlands  has  declined 
in  recent  years.  Socio-economic  inequalities  in 
breast  cancer  screening  are  substantial.  The 
2021/2022  Survey  of  Health,  Ageing  and 
(SHARE)  shows  a  13 
Retirement 
percentage-point  gap 
in  mammography  rates 
between  women  with  high  and  low  education 
levels  (415).  The  country  participates  in  a  joint 
the 
action  on  cancer  screening  funded  by 

in  Europe 

(414) OECD/European Observatory on Health Systems and Policies 
(2025), Country Health Profile 2025: The Netherlands. State 
of Health in the EU. 

(415) Country Health Profile 2025: The Netherlands – see earlier 

footnote. 

105 

81.481.481.781.981.9808080.681.481.520202021202220232024NetherlandsEU68.661.459.059.759.260.094.889.291.793.389.786.8201420192020202120222023per 100 000 populationNetherlandsEU 
 
     
     
 
 
 
Table A15.1:Key health indicators 

*The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used based on 2023 data (or latest available). Doctors’ density data refer to practising doctors in all countries except 
Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data refer to practising nurses (EU 
recognised qualification) in most countries except Portugal (licensed to practice) and Slovakia (professionally active). Latest data 
update on nurses for Belgium and Sweden: 2022; for France: 2021; for Luxembourg: 2017. 
** latest available 10-year trend: ratio 2023/2014 or 2024/2013; a factor of 2.00 means that it has doubled in 10 years. 
***‘Available hospital beds’ covers somatic care, not psychiatric care. 
Source: Eurostat 

(416).  Annual 

influenza 
EU4Health  programme 
immunisation  among  people  aged  65  and  over  in 
the Netherlands has consistently exceeded the EU 
average  over 
the  past  decade.  However, 
less 
vaccination  among  children  shows  a 
favourable trend. First-dose measles immunisation 
has slightly declined in recent years to reach 89% 
in  2024,  below  the  EU  average  of  92%  and  well 
short  of  the  95%  threshold  required  for  herd 
immunity. Human papillomavirus (HPV) vaccination 
also falls short of the recommended level.    

Netherlands performs relatively well on most 
behavioural  risk  factors  for  health,  but 
inequalities  are  substantial  across  most  of 
these  factors.  Smoking  (including  direct  and 
indirect smoking) was the leading cause of deaths 
in  2021.  However,  the  adult  smoking  rate  has 
sharply  declined  in  the  last  decade,  falling  below 
the  EU  average.  The decline  may be  linked to the 
implementation  of 
control 
measures  aimed 
to  achieve  a  smoke-free 
generation  by  2040  (417).  The  introduction  of 
increased  tobacco  taxation,  plain  packaging  and 
other tobacco control measures in 2020 and 2021 
also  played  a  major  role  in  reducing  the  smoking 
rate. Despite a slight increase over the past years, 
the obesity rate is still below the EU average. Fruit 
and  vegetable  consumption  is  higher  than  the  EU 
average, although the percentage is lower among 

tobacco 

stricter 

(416) EUCanScreen. 

(417) RIVM (2023), Towards a smoke-free generation: Options to 

make cigarettes less appealing and addictive. 

trends 

in  other  EU 
to 
adolescents.  Similar 
countries,  the  prevalence  of  behavioural  risk 
factors in the population varies significantly across 
socio-economic  groups.  People  with 
lower 
educational  attainment  smoked  more  daily  (20% 
vs 7% of people with higher education attainment) 
and  are  more  likely  to  be  obese  (10  percentage-
point gap).  

and 

care 

primary 

Health  spending  remains  among  the  highest 
in  the  EU  in  2023  with  a  strong  focus  on 
care 
outpatient 
gatekeeping.  Per  capita  health  spending  is  26% 
above  the  EU  average,  with  the  largest  share  of 
health  spending  going  towards  outpatient  care 
(above the EU average - see Graph A15.1). Among 
EU  countries  reporting  30-day  mortality  following 
heart  attack  and  stroke  based  on  patient-level 
data,  the  Netherlands  recorded  one  of  the  lowest 
rates  in  2023.  These  outcomes  reflect  robust 
emergency  and  acute  care  performance.  Low 
hospital  admission  rates  for  chronic  conditions 
suggest effective outpatient care. The Netherlands 
maintains  one  of  the  lowest  levels  of  hospital 
capacity  in  the  EU.  Hospital  bed  density  declined 
steadily  from  3.2  in  2017  to  2.3  per  1  000  in 
2023, over twice below the EU average of 5.1. The 
sharp  decline  observed  since  2022  reflects  a 
change  in  the  inclusion  criteria,  as  beds  for 
psychiatric  care  covered  by  the  Long-Term  Care 
Act  are  no  longer  included.  The  Dutch  healthcare 
system has increasingly shifted towards outpatient 
and  day  care  services,  reducing  reliance  on 
inpatient beds, as illustrated by the significant rise 
in the share of some procedures performed as day 

106 

2020202120222023202410-year change**EU average* (latest year) Cancer mortality per 100 000 population261.3256.2254.1247.6n.a.0.88233.1 (2023)Mortality due to circulatory diseases per 100 000 population 219.7 219.9 225.7 220.6n.a.0.81313.0 (2023)Current expenditure on health, purchasing power standards, per capita4 2384 6944 7194 8485 2101.443834.9 (2023)Public share of health expenditure, % of current health expenditure 85.0 83.8 82.8 82.7 83.21.0280.6 (2023)Spending on prevention, % of current health expenditure 4.69.76.85.24.81.383.7 (2023)Available hospital beds per 100 000 population*** 212 183 166 159n.a.n.a.440 (2023)Doctors per 1 000 population*3.83.93.93.9n.a.1.174.3 (2023)*Nurses per 1 000 population* 11.1 11.4 11.6 11.1n.a.1.107.6 (2023)*Mortality at working age (20-64 years), % of total mortality12.813.212.812.612.30.8214.3 (2023)Consumption of antibiotics in the community and hospital sectors,      defined daily doses per 1 000 inhabitants 8.5 8.3 9.1 9.6 9.80.9420.3 (2024) 
 
 
     
 
  The  Netherlands 

surgery  between  2015  and  2021(418).  The  Dutch 
medical  imaging  capacity  is  also  below  the  EU 
average  reflecting  the  reduced  investment  on 
inpatient  care. 
requested 
technical support as part of a multi-country project 
to  apply  health  system  performance  assessment 
to  strengthen  policy  decision-making, 
(HSPA) 
improve 
resource  allocation,  and  accelerate 
progress toward national health goals. The project, 
funded  through  the  Technical  Support  Instrument, 
aims  to 
identify  areas  of 
suboptimal  performance;  (ii)  understand  the  root 
causes; and (iii) develop timely policies to address 
challenges. This will be achieved by enhancing the 
use of HSPA to focus on performance pathways. 

(i)  systematically 

former 

reserve 

although 

preparedness, 

Netherlands  demonstrates  strong  public 
health 
future 
capacity  could  be  limited  by  budgetary  and 
workforce  constraints.  The 
recovery  and 
resilience  plan  (RRP)  has  supported  a  measure  to 
strengthen healthcare workforce capacity in times 
of  crisis.  This  investment  has  provided  education 
and  on-the-job  training  and  has  established  a 
healthcare 
of 
national 
professionals.  However,  although  the  Netherlands 
is  among  the  countries  with  higher  estimated 
domestic  spending  on  prevention,  preparedness 
and  response  per  capita  (419),  concerns  have 
emerged  over  the  long-term  sustainability  of 
public health readiness in emergencies. During the 
2025 budget debate, the government announced a 
EUR 300 million reduction in funding for pandemic 
preparedness and infectious disease control. These 
constraints have raised concerns that future public 
health  capacity  could  be  undermined,  with 
essential  functions  already  under  strain  due  to 
funding uncertainty  and workforce shortages (420). 
However,  on  antibiotic  use,  the  Netherlands 
maintains  one  of  the  lowest  rates  in  the  EU  and 
has remained on track to meet its 2030 targets.  

Unmet needs for medical care remain low but 
are  much  higher  among  people  with  low 
incomes  and  are  rising  sharply  for  mental 
health,  especially  among  socio-economically 

(418) Country Health Profile 2025: The Netherlands – see earlier 

footnote. 

(419) OECD Health Statistics 2025. 

(420) IGJ (2025), Fundament publieke gezondheidszorg bedreigd 

door onzekere toekomst GGD [Foundation of public 
healthcare threatened by uncertain future of Municipal 
Health Services]. 

disadvantaged  groups.  In  2025,  only  1.6%  of 
the  population  reporting  a  need  of  medical  care 
also  reported  that  this  need  was  unmet.  This 
represents less than half the EU average of 3.6%, 
according  to  the  EU-SILC  survey.  However,  the 
gender  gap  is  more  than  double  the  EU  average 
(2.1 vs 0.7). Inequalities in access by income group 
are  observed  in  particular  in  unmet  needs  for 
dental  care.  While  3.1%  of  all  people  in  need  of 
dental  care  reported  unmet  needs  for  dental 
services,  the  rate  rose  to  7.6%  among  those  in 
lower-income households. A significant access gap 
the  Netherlands  concerns  mental  health. 
in 
According to the 2024 Eurofound survey (421), 9% 
of adults in need of mental healthcare reported an 
unmet  need  in  the  Netherlands,  compared  to  an 
EU  average  of  7%.  This  reflects  a  mismatch 
between  growing  demand  and  limited  system 
capacity.  

Although  numbers  of  general  practitioners 
(GPs)  and  nurses  have  risen  recently, 
persistent  structural  shortages 
in  some 
healthcare  professions  continue  to  intensify 
workload  pressures  and  job  strain.  While  the 
number of doctors and nurses has increased over 
the  past  decade,  the  demand  for  healthcare  has 
also  increased,  and  a  large  share  of  doctors, 
nurses  and  other  healthcare  providers  report 
feeling growing pressure at work and trying to do 
too  much  at 
time.  Healthcare 
the  same 
professionals  often  raise  concerns  about  limited 
autonomy and a lack of time for patient care due 
to  heavy  administrative  burdens.  The  number  of 
doctors relative to the population is slightly below 
the  EU  average  in  2023,  while  the  number  of 
nurses  is  above  the  EU  average,  suggesting  a 
greater  reliance  on  nurses  in  delivering  services, 
participating  in  task-sharing  and  engaging  in 
advanced  practices.  However,  significant  staffing 
difficulties  persist.  Hospitals  continue  to  struggle 
with  nursing  workforce  gaps  and  shortages  are 
also  particularly  acute  in  nursing  homes  (see 
Annex 12) and home care services. There is also a 
growing  trend  in  healthcare  workers  opting  for 
self-employment over salaried positions. However, 
this  approach  raises  serious  concerns  about 
escalating costs and potential negative impacts on 
the  quality  and  continuity  of  care.  To  support  the 
implementation  of  health  workforce  planning  and 

(421) The data from the Eurofound survey are not comparable to 
the Eurostat ones mentioned earlier, because of differences 
in methodologies. 

107 

 
 
 
forecasting,  the  Netherlands  actively  participates 
in  the  joint  action  HEROES  (422)  funded  by  the 
EU4Health programme.  

almost double of the EU average (1.8) and further 
increasing in 2025 (425). 

ICT 

software, 

Netherlands  has  promoted  investment  in 
digital  technologies  for  health,  expanding 
their  uptake.  The  country  has  been  investing 
consistently  in  digital  technologies  for  health.  In 
2022,  the  Netherlands  was  among  the  EU 
countries  investing  the  most  on  digital  health,  in 
particular 
and 
equipment, 
databases (423). The national vision and strategy on 
the  health  information  system,  launched  by  the 
Ministry  of  Health,  Welfare  and  Sport  in  2025, 
aims  to  modernise  health  data  infrastructure  and 
support  digital  and  AI  competences  among 
healthcare  professionals  and  medical  students. 
Netherlands  also  received  substantial  EU  funds 
supporting  digitalisation.  Under  the  RRP,  two 
measures  out  of  the  four  under  the  healthcare 
component  have  contributed  to  supporting  the 
digital  transformation  of  the  healthcare  sector.   
One  measure  aims  to  support  care  for  people 
living  at  home,  in  particular  for  older  people  and 
people  with  vulnerable  health  through  e-health 
solutions.  Another  aimed  at  developing  an 
integrated national health data infrastructure, also 
stimulating innovation in life sciences. In addition, 
the  2021-2027  cohesion  policy  funds  provide 
around  EUR  7  million  for  e-health  services  and 
digital  applications.  Moreover,  the  Netherlands 
participate in joint actions and benefits from direct 
grants  under  EU4Health,  which  aim  to  facilitate 
the  implementation  of  the  European  Health  Data 
Space and AI solutions. 

in 

employment 

The  pharmaceutical  sector  holds  significant 
economic  importance  in  the  Netherlands. 
While 
pharmaceutical 
manufacturing  remains  among  the  lowest  in  the 
EU,  the  country  stands  out  as  a  leading  hub  for 
clinical  research  and  innovation. Despite  relatively 
low  investment  from  industry  in  pharmaceutical 
R&D, the Netherlands reported one of the highest 
numbers of clinical  trials per million population in 
the  EU  in  2024  (31.4,  compared  with  an  EU 
average of 18.3) (424), alongside a high number of 
pharmaceutical  patents  granted  (3.1)  in  2024, 

(422) JA HEROES | Health Workforce Planning Project – A 

WordPress Full-Site Editor Theme https://healthworkforce.eu/.  

(423) Country Health Profile 2025: The Netherlands – see earlier 

footnote. 

(424) US National Library of Medicine, https://clinicaltrials.gov. 

(425) European Patent Office: Statistics & Trends Centre | epo.org. 

108 

 
 
 
ANNEX 16: HOUSING 

for 

increased, 

particularly 

Key  challenges  in  the  Netherlands  include 
rising  house  prices,  persistent 
rapidly 
shortages  of  new  dwellings  and  constraints 
in  the  private  rental  market,  which  remains 
small  and  expensive.  Affordability  pressures 
disproportionately  affect  tenants.  This  is  reflected 
in long waiting lists in the social rental sector and 
strong demand in the private rental segment. The 
supply  of  new  housing  remains  below  national 
targets  due  to  complex  planning  and  permitting 
procedures, 
constraints, 
environmental 
infrastructure  bottlenecks  and  labour  shortages, 
despite  ongoing  efforts  to  simplify  procedures.  In 
the  rental  market,  protective  regulations  for 
tenants  have  been  strengthened,  but  investor 
disincentives persist, leading to a shrinking private 
rental  segment  and  limiting  affordability.  While 
social  housing  construction  has 
it 
remains  insufficient  to  fully  mitigate  affordability 
pressures, 
lower-income 
households  and  vulnerable  groups.  Moreover,  the 
housing association sector faces a significant EUR 
20 billion investment gap to meet expected needs 
for 
and 
decarbonisation  of  the  housing  stock.  This  gap 
reflects  constraints  on  the  sector’s  capacity  to 
scale up investment despite strong and persistent 
demand.  Overall,  the Netherlands has made only 
limited or partial progress in addressing structural 
housing market challenges, reflecting the need for 
targeted  reforms  to  increase  housing  supply, 
reduce 
improve 
demand-side 
supply 
pressures,  persistent  affordability  constraints  in 
high-demand urban areas and energy-related cost 
further 
burden 
compound  housing  access  challenges.  In  the  area 
of 
country-specific 
recommendations  for  the  Netherlands  highlighted 
the  need  to  remove  obstacles  to  the  construction 
of  new  dwellings  by  simplifying  planning  and 
permitting procedures, to support the development 
of an affordable private rental sector including by 
making investment conditions more attractive, and 
to 
debt-financed 
incentives 
homeownership (see Annex 3 on Taxation). 

incentives  and 
Regional 

vulnerable  households 

construction, 

investment 

distortions. 

renovation 

housing, 

reduce 

2025 

new 

the 

for 

for 

Housing market developments 

slowdown  in  2022-2023  because  of  a  spike  in 
interest  rates  (see  Graph  A16.1).  This  substantial 
increase in house prices has affected all provinces, 
with prices often more than doubling over the past 
decade.  Despite  a  record  number  of  238  695 
property  sales  in  2025,  marking  an  almost  16% 
increase  from  2024,  largely  driven  by  private 
landlords opting to sell their rental properties (426), 
average  house  prices  increased  by  8.6%  in  2025 
year-on-year (427) sustaining price overvaluation of 
around  20%  (based  on  the  standard  European 
Commission  methodology).  This  continued  price 
increase is being driven by strong demand amid a 
constrained  supply,  which  is  expected  to  sustain 
house price growth in the next years. 

Graph A16.1: House prices, rents and price-to-
income evolution in NL and EU27 since 2005 

Source: Eurostat 

by 

driven 

favourable 

Demand  pressures  in  the  Dutch  housing 
demographic 
are 
market 
developments, 
financing 
conditions  and  structural  mismatches  in  the 
use  of  the  existing  housing  stock.  Population 
growth  has  been  stronger  than  anticipated,  while 
increasingly  shifted 
household  formation  has 
towards 
the 
mismatch, particularly in urban areas, between the 
available  stock  of  larger  dwellings  and  demand 
from  groups  such  as  students,  first-time  buyers 
and migrants. At the same time, rising disposable 
income,  historically  low  interest  rates  and  tax 
interest 
incentives, 
deductibility and the low effective taxation of low 
imputed  rents,  have  supported  demand  and 

smaller  households,  widening 

mortgage 

including 

House  prices  continue  to  rise  in  an  already 
expensive  housing  market.  Since  2013,  prices 
have  increased  strongly,  with  only  a  temporary 

(426) See section on rental market. 

(427) Statistics Netherlands (2026). 

109 

50751001251501752002250507091113151719212325Index (2005 = 100)Nominal prices NLNominal prices EU27Rental prices NLRental prices EU27Price-to-income ratio NLPrice-to-income ratio EU27 
 
     
 
 
 
Graph A16.2: House supply indicators in NL since 
2005 

continued  to  favour  homeownership  financed 
through  mortgages  over  renting  (see  Annex  5). 
These  pressures  are  compounded  by  the  high 
degree of under-occupation in the existing housing 
stock:  around  59%  of  dwellings  are  classified  as 
underoccupied,  compared  with  an  EU  average  of 
around 33% in 2024, reflecting limited mobility in 
the  owner-occupied  sector  and  the  effects  of 
population ageing. 

The responsiveness of new dwelling supply to 
this  high  demand  has  remained  limited.  The 
housing  supply  gap  is  a  major  issue  projected  to 
exceed  400  000  dwellings  in  2025  (428).  The 
shortage  is  most  acute  in  the  Randstad  and 
several  rapidly  growing  medium-sized  cities,  such 
as Eindhoven, and other parts of Brabant. Multiple 
bottlenecks  contribute  to  the  shortfall  in  meeting 
the  national  target  of    adding  around  100  000 
dwellings per year (through both new construction 
and  other  additions  to  the  housing  stock,  such  as 
conversions  and  subdivision)  with  around  69  000 
newly constructed dwellings and approximately 10 
000–11  000  other  additions  (about  80  000–90 
000 total additions) expected in 2025 and around 
80  000  in  2026    (429)  (see  2025  CSR  1.4).  These 
bottlenecks  include:  (i)  complex  planning  and 
permitting  procedures;  (ii)  high  costs  and  lack  of 
(iv) 
available 
environmental regulations limiting building permits 
due  to  overall  excessive  nitrogen  deposition;  and 
(v) electricity grid congestion (see also the Section 
on  structural  policies).  As  the  number  of  new 
residential  building  permits 
in  2025 
dropped  by  8.6%  year-on-year,  this  will  likely 
impact  construction  in  2027.  (see  Graph  A16.2). 
These  housing  market  bottlenecks  also  restrict 
labour mobility and can weigh on competitiveness 
by  limiting  workers’  ability  to  relocate  for  job 
opportunities and increasing housing--related cost 
pressures on firms and households. 

shortages; 

issued 

labour 

land; 

(iii) 

Source: Eurostat 

of 

the 

risk 

large  social 

rental  sector 

total  housing  stock 

The 
faces 
overwhelming  demand,  while  the  private 
rental market is shrinking as rent regulations 
increase 
unprofitable 
investments.  The  rental  market  consists  of  a 
small  and  expensive  private  segment  (14.3%  of 
the 
in  2025)  and  a 
considerably  larger  social  segment  (28.2%  of  the 
total  housing  stock).  Despite  its  substantial  size, 
the  social  rental  sector  has  long  waiting  lists  due 
to  affordable  rental  options  being  accessible  to 
both low- and middle-income households, causing 
demand  to  outstrip  supply  (430).  Within  the  social 
housing sector, housing associations play a central 
role  in  sustaining  affordability  and  expanding 
supply.  However,  their  investment  capacity  is 
increasingly constrained, contributing to a growing 
housing  association  investment  gap.  This  reflects 
structural  supply  bottlenecks,  rising  construction 
and  compliance  costs,  and  strong  demand 
pressures  in  a  context  of  insufficient  overall 
housing supply, which limit their ability to scale up 
investment despite long-term financing needs.  At 
the same time, the private rental segment remains 
relatively  small  and  offers  limited  affordability, 
with  tenants  receiving  considerably  less  public 
support 
rental  households  or 
homeowners. Recent rental  regulations have been 
introduced to protect private tenants and rent caps 
have  been  extended  to  mid-range  rentals  (up  to 

social 

than 

(428) Balouktsi et al. (2026), Housing investment needs in the EU, JRC 

Technical Report 144419. 

(430) In 2026, maximum EUR 51 537 for single-person households and 

(429) Economisch Instituut voor de Bouw (2026). 

EUR 56 910 for multi-person households. 

110 

01234567204060801001201401600507091113151719212325% of GDPIndex (2005 = 100)Residential building permits in m2, indexResidential buildings producer prices, indexInvestment in dwellings (right-hand side axis) 
 
     
 
EUR 1  184.82)  in  the  private  rental  sector  (431), 
while  prices  for  rental  properties  above  the  cap 
can still be freely set. However, these regulations, 
alongside  higher  interest  rates  and  tax  changes, 
have made buy-to-let investments unprofitable for 
many landlords. Consequently, this has resulted in 
a sell-off of rental properties and is likely to deter 
new  construction  for  rental  supply,  leading  to  an 
even  smaller  private  rental  segment  and  a 
reduction  in  the  total  housing  supply  (see  2025 
CSR 1.5). While capped rents benefit some tenants, 
others who rely on the private rental market face 
a further reduction in available dwellings and even 
stronger  affordability  pressures  for  units  priced 
above the cap.  

in  construction 

lags 
Productivity  growth 
behind  other  sectors.  A  decade  of  rising 
investment  has  not  increased  annual  housing 
supply  (see  Graph  5.7.2).  In  2010-2024,  labour 
productivity  measured  as  value  added  per  hour 
worked  increased  by  only  3.3%;  far  below  the 
growth  seen  in  industry  (34.3%)  or  the  overall 
commercial  sector  (10.3%)  (432).  This  sluggish 
rising 
productivity 
construction  costs,  complicating  the  financial 
viability of housing construction. 

contributes 

growth 

to 

Structural policies 

land 

lengthy 

permitting 

processes, 

constrain 

Complex  planning  procedures,  environmental 
restrictions  and  the  limited  availability  of 
developable 
housing 
construction.  Construction  projects  are  delayed 
by 
nitrogen 
deposition  limits  and  electricity  grid  congestion 
(433), while municipalities have limited instruments 
to  coordinate  land  allocation.  Permitting  delays 
reflect  the  multi-layered  nature  of  Dutch  spatial 
planning  and  environmental  approval  systems, 
including  zoning,  building  and  environmental 
permits  under  the  Omgevingswet,  as  well  as 
to 
additional 

requirements 

licensing 

linked 

(431) Ban on buy-to-let properties in specific neighbourhoods 

(2022), providing greater protection to tenants (Wet goed 
verhuurschap, 2023), making fixed-term rental contracts the 
norm (2024), and extending rent controls to the mid-price 
rental market segment (2024). 

(432) See CBS (2025), Groeirekeningen; nationale rekeningen. 

(433) Netbeheer Nederland (2024), Rapportage netcongestie 

elektriciteitsnet. 

nitrogen  emission  constraints  following  the  2019 
Council  of  State  ruling,  all  of  which  increase 
administrative  complexity  and  extend  approval 
timelines (434).  

in 

and 

and 

includes 

permitting 

Housing  supply  policies  combine  efforts  to 
streamline 
planning 
procedures  with  limited  RRP  support  and 
demand-side measures, but structural supply 
constraints  continue  to  dominate  outcomes. 
Efforts  to  increase  construction  and  streamline 
permitting are ongoing, including under the STOER 
programme  (435),  which  aims  to  reduce  regulatory 
unnecessary 
remove 
complexity 
administrative 
housing 
requirements 
development.  The  Netherlands  Recovery  and 
limited  but  targeted 
Resilience  Plan 
housing-relevant  measures,  mainly  focused  on 
improving 
spatial  planning  and  permitting 
processes  and  supporting  energy-efficiency  and 
thereby 
renovation  of 
addressing structural constraints to housing supply 
rather  than  directly  financing  large-scale  housing 
construction  (436).  While  policy  efforts  have  also 
aimed  to  support  first-time  buyers,  most  notably 
through  the  increase  of  the  National  Mortgage 
Guarantee (NHG) ceiling and a recent rise in young 
homebuyers, these measures operate in a context 
of  constrained  supply  and  may  contribute  to 
upward  price  pressures  in  tight  housing  markets. 
Bottlenecks  therefore  persist,  particularly  in  high-
demand  regions  such  as  the  Randstad,  where 
supply  expansion  continues  to  face  structural 
constraints.  The  government  has  also  established 
a  ministerial  taskforce  to  accelerate  housing 
construction,  with  initial  measures  focusing  on 
addressing  key  bottlenecks  in  permitting  and 

residential  buildings, 

(434) OECD (2023), Housing policies in the Netherlands / Urban 

Development Reviews; Algemene Rekenkamer (Dutch Court 
of Audit), reports on spatial planning and permitting 
efficiency. 

(435) STOER programme (Dutch Ministry of the Interior and 

Kingdom Relations, “Schrappen Tegenstrijdige en Overbodige 
Eisen en Regelgeving (STOER)”), a policy initiative aimed at 
simplifying and reducing regulatory burden in spatial 
planning and housing development procedures. 

(436) European Commission, Commission Staff Working Document: 

Analysis of the Recovery and Resilience Plan of the 
Netherlands, SWD(2022) 173 final, accompanying the 
proposal for a Council Implementing Decision approving the 
Dutch Recovery and Resilience Plan. 

111 

 
 
 
project delivery, as outlined in a communication to 
Parliament in April 2026  (437). 

incentives.  Mortgage 

Tax  policies  influence  housing  demand  and 
investment 
interest 
deductibility,  imputed  rent  taxation  and  other 
incentives  encourage  homeownership  but  can 
cause  further  price  rises.  As  detailed  in  Taxation 
Annex 3, the Dutch tax system continues to favour 
debt-financed  homeownership  through  generous 
mortgage interest tax relief for primary residences 
and a relatively low effective taxation of imputed 
rents. No reforms are currently foreseen to change 
the  tax  treatment  of  owner-occupied  housing, 
which  has  been  a  long-standing  country-specific 
recommendation.  The  continued  absence  of 
reform,  confirmed  in  the  2026–2030  coalition 
agreement,  maintains  these  structural  incentives. 
Ongoing  reforms,  including  the  simplification  of 
housing  benefits,  aim  to  support  low-income 
households  while  promoting  sustainable  housing 
investment. 

Housing  policies  are  implemented  through  a 
multi-level  governance  framework  involving 
the  national  government,  municipalities  and 
housing  associations,  with  regional  housing 
deals  and  National  Performance Agreements 
(NPAs)  setting  commitments  on  housing 
supply,  affordability  and  sustainability.  This 
framework  aims  to  align  national  targets  with 
local  delivery,  but  differences  in  administrative 
capacity  and  implementation  performance  across 
regions  lead  to  uneven  outcomes.  OECD  analysis 
points 
regional 
coordination,  simplify  spatial  planning  governance 
and 
incentives  for  municipalities  to 
release  land  in  order  to  enhance  housing  supply 
responsiveness, particularly in the Randstad and in 
rapidly growing medium-sized cities (438). Regional 
disparities in housing outcomes remain significant. 
Concentration of population and economic activity 
in the Randstad, together with stronger household 
formation  in  medium-sized  cities,  continues  to 
generate  uneven  pressure  on 
local  housing 
markets, with more acute affordability constraints 

to  strengthen 

the  need 

improve 

to 

integrated 

focus  on 

increasingly 

and  longer  access  times  in  these  areas.  Policy 
improving 
responses 
coordination  across  governance  levels,  including 
more 
infrastructure 
planning, stronger inter-municipal cooperation and 
land-use  and 
improved  alignment  between 
housing strategies, alongside efforts to strengthen 
regional 
accelerate 
capacity 
permitting processes. 

spatial  and 

delivery 

and 

The  social  housing  sector,  at  28.6%  of  the 
total  housing  stock,  plays  an  important  role 
in  mitigating  affordability  risks  but  faces 
increasing  demand,  supply  and  quality-
related  pressures.  Construction  of  new  social 
rental units has increased but remains insufficient 
to meet targets, particularly for larger households 
and vulnerable groups. At the same time, housing 
associations  are  expected  to  improve  the  quality 
and  energy  efficiency  of  the  existing  stock, 
insulation 
including 
measures  aimed  at  phasing  out  low  energy-label 
dwellings and reducing energy costs for tenants, in 
line 
Performance 
Agreements (439).  Housing  associations  therefore 
continue  to  operate  under  fiscal  and  regulatory 
pressures  while  addressing  long  waiting  lists  and 
upgrading  the  sustainability  and  quality  of  the 
social housing stock. 

renovation  and 

National 

through 

with 

the 

Vulnerable groups 

pressures 

affordability 

Housing 
have 
intensified  over  the  past  decade,  with  the 
burden  falling  disproportionately  on  lower-
income  households  and  tenants.  House  price 
income 
growth  has 
developments,  with  the  house  price-to-income 
ratio  remaining  well  above  its  long-term  average, 
reflecting sustained affordability pressures in both 
rental  markets.  These 
the  ownership  and 
dynamics,  combined  with  constrained  housing 
supply and high rental costs, continue to translate 

persistently 

outpaced 

(437) Dutch Government (2026), Brief aan de Tweede Kamer: 

Eerste resultaten Taskforce Versnelling Woningbouw, 20 April 
2026. Available at: 
https://open.overheid.nl/documenten/561223f4-5f56-4b63-
8e72-b38a357464c4/. 

(438) OECD (2025), OECD Economic Surveys: Netherlands 2025, 

OECD Publishing, Paris, https://doi.org/10.1787/2dd1f4aa-en.  

(439) National Performance Agreements (Nationale 

Prestatieafspraken) between the government, municipalities 
and housing associations, including commitments on new 
construction, affordability and energy-efficiency upgrades of 
the social housing stock.  Government of the Netherlands: 
Housing associations  
https://www.government.nl/topics/housing/housing-
associations. 

112 

 
 
 
cost  burdens 

significant  housing 

into 
for 
vulnerable  groups.  While  the  overall  housing  cost 
overburden  rate  declined  to  6.9%  in  2024,  below 
the  EU  average  of  8.2%,  the  burden  remains 
substantially  higher  for  households  at  risk  of 
poverty,  at 27.9% (EU-27 average: 31%).  Tenants 
are  particularly  affected,  especially  those  renting 
at  market  prices,  for  whom  the  overburden  rate 
reaches  43.9%,  compared  with  only  1.0%  for 
homeowners  with  a  mortgage.  More  broadly, 
housing  costs  account  for  a  relatively  high  share 
of disposable household income, at around 20.5% 
in  2024,  compared  with  an  EU  average  of 
19.2% (440). 

outpaced 

pressures 

persistently 

affordability 

Housing 
have 
intensified  over  the  past  decade,  with  the 
burden  falling  disproportionately  on  lower-
income  households  and  tenants.  House  price 
growth  has 
income 
developments,  with  the  house  price-to-income 
ratio  remaining  well  above  its  long-term  average, 
reflecting sustained affordability pressures in both 
the  ownership  and  rental  markets.  The  social 
housing  sector  plays  a  central  role  in  mitigating 
affordability  risks  but  faces  growing  demand  and 
supply  constraints.  Although  the  absolute  number 
of  new  social  rental  dwellings  built  by  social 
housing  providers  has  been  rising  in  recent  years, 
from 16 000 in 2022 to 17 800 in 2023 and just 
under  22  000  in  2024  (441)  (about  33%  of  the 
total  new  construction),  this  increase  still  falls 
short of the levels needed to keep up with demand 
and broader housing shortages. 

 These  dynamics,  combined  with  constrained 
housing  supply  and  high  rental  costs,  continue  to 
translate into significant housing cost burdens for 
vulnerable  groups.  While  the  overall  housing  cost 
overburden  rate  declined  to  6.9%  in  2024,  below 
the  EU  average  of  8.2%,  the  burden  remains 
substantially  higher  for  households  at  risk  of 
poverty,  at 27.9% (EU-27 average: 31%). Tenants 
are  particularly  affected,  especially  those  renting 
at  market  prices,  for  whom  the  overburden  rate 
reaches  43.9%,  compared  with  only  1.0%  for 
homeowners  with  a  mortgage.  More  broadly, 
housing  costs  account  for  a  relatively  high  share 
of disposable household income, at around 20.5% 

in  2024,  compared  with  an  EU  average  of 
19.2% (442). 

and 

housing 

tenants 

income.  High 

Both 
homeowners  with 
mortgages  are  facing  constraints  on  their 
costs, 
disposable 
combined  with  inflation  and  elevated  energy 
prices,  continue 
the  disposable 
to  constrain 
incomes  of  low-income  households,  particularly 
tenants.  At  the  same  time,  high  – 
largely 
mortgage-related  –  household 
indebtedness 
increases  exposure  to  interest  rate  shocks  and 
constrains disposable income among homeowners 
with mortgages. 

Housing  quality  challenges  persist  alongside 
affordability  pressures,  with  clear  regional 
and  socio-economic  disparities. 
In  2023, 
around  7%  of  the  population  reported  housing 
difficulties,  a  proportion  that  almost  doubles 
among  people  at  risk  of  poverty  or  social 
exclusion.  Energy-inefficient  housing  stock  and 
affordability  pressures  are  more  pronounced  in 
older  post-war  urban  neighbourhoods  and  lower-
income  areas,  as  well  as  in  structurally  weaker 
regions  in  the  north  and  south  of  the  country, 
exacerbating  territorial  inequalities  and  increasing 
exposure  to  energy  poverty.  At  EU  level,  energy 
poverty  remains  significantly  higher,  with  around 
10–9%  of  the  EU population  unable  to  keep  their 
home  adequately  warm 
(Eurostat,  2024), 
compared  with  an  estimated  around  6%  of 
households in the Netherlands, indicating relatively 
lower,  but  still  non-negligible,  energy  vulnerability 
in the Dutch context. 

Discriminatory  practices  that  pose  barriers 
to  equal  access  to  housing  persist  in  the 
rental  market,  affecting  people  with  a 
migrant  background,  in  particular.  Data  show 
that  prospective tenants with non-Dutch-sounding 
names  continue  to  receive  fewer  invitations  to 
viewings, despite gradual improvements over time, 
with  discrimination  remaining  more  pronounced 
outside  cities  (443).  In  response,  the  Netherlands 
strengthened  its  regulatory  framework  with  the 
entry into force of the Wet goed verhuurderschap 
(Good Landlordship Act) in July 2023. The Act is a 
applies 
binding 

legislative  measure 

that 

(440)https://ec.europa.eu/eurostat/databrowser/view/ilc_mded01_

(442)https://ec.europa.eu/eurostat/databrowser/view/ilc_mded01_

_custom_19401920/bookmark/table.  

_custom_19401920/bookmark/table.  

(441) CBS: Meer nieuwbouw woningcorporaties in eerste helft jaar | 

(443) The third national monitor on housing discrimination (2022–

Aedes. 

2023). 

113 

 
 
 
Graph A16.3: Housing affordability selected indicators 

Source: Eurostat and European Commission calculations. 

to 

including 

obligations 

enforceable  standards  for  landlords  and  letting 
agents, 
prevent 
discrimination,  apply  transparent  tenant-selection 
criteria,  and  comply  with  municipal  oversight  and 
sanctioning powers (444). Policy efforts increasingly 
also  target  vulnerable  groups  through  dedicated 
programmes,  including  the  “Wonen  en  zorg  voor 
thuis  voor 
ouderen”  programme  and 
iedereen”, which aim to improve access to suitable 
housing  for  elderly  people  and  other  vulnerable 
groups  such  as  low-income  households,  homeless 
people  and  other  groups  with  complex  housing 
needs. 

“Een 

supply 

constraints. 

Recent  policy  measures  have  not  addressed 
The 
underlying 
simplification  of  the  housing  benefit  system  in 
2026 is expected to increase support for nearly all 
current  recipients  (around  1.5  million  people)  and 
expand  coverage  by  an  estimated  additional 
170 000  beneficiaries.  While  these  measures  are 
expected  to  improve  short-term  affordability  for 
housing 
low-income 
shortages  persist,  indicating  that  demand-side 
support alone is insufficient to address underlying 
supply constraints (445). 

households, 

structural 

(444) Ministry of Housing and Spatial Planning, aanpak 

woondiscriminatie, 2023. 

(445) Tax and Customs Authority, Huurtoeslag verandert vanaf 
2026: meer mensen krijgen recht op deze toeslag | Dienst 
Toeslagen. 

114 

 
 
 
HORIZONTAL 
ANNEX 17: SUSTAINABLE DEVELOPMENT GOALS 

sustainability, 

This  annex  assesses 
the  Netherlands’ 
progress  on  the  sustainable  development 
goals 
(SDGs)  along  the  dimensions  of 
social 
competitiveness, 
fairness and macroeconomic stability. The 17 
SDGs  and  their  related  indicators provide  a  policy 
framework  under  the  UN’s  2030  Agenda  for 
Sustainable  Development.  The  aim  is  to  end  all 
forms  of  poverty,  fight  inequalities  and  tackle 
climate change and the environmental crisis, while 
ensuring that no one is left behind. The EU and its 
Member  States  are  committed  to  this  historic 
global  framework  agreement  and  to  playing  an 
active  role  in  maximising  progress  on  the  SDGs. 
The graph below is based on the EU SDG indicator 
set developed to monitor progress on the SDGs in 
the EU. 

related 

The  Netherlands  performs  very  well  on  SDG 
indicators 
competitiveness 
(SDGs 4,  8  and  9).  When  it  comes  to  quality 
education (SDG 4), the Netherlands has one of the 
Graph A17.1: Progress towards the SDGs in the Netherlands 

to 

highest  rates  of  people  with  at  least  basic  digital 
skills  (83.6%  in  2025;  EU  average:  60.4%),  and 
one  of  the  highest  rates  of  adult  participation  in 
learning  (25.9%  in  2025;  EU  average:  13.7%).  In 
addition, the level of tertiary education attainment 
increased  further  (from  49.1%  in  2019  to  56.1% 
in  2025)  and  was  substantially  above  the  EU 
average of 44.8% in 2025. On SDG 8 (Decent work 
and economic growth), the Netherlands reduced its 
rate  of  young  people  not 
in  employment, 
education  or  training  from  6.3%  in  2019  to  5.3% 
in 2025, remaining well below the EU level of 11% 
in 2025.  

SDG 9 

(Industry, 

innovation 

and 
On 
infrastructure), the Netherlands outperforms 
the  EU  average  in  most  indicators.  The 
percentage of households with high-speed internet 
connection in 2024 (98.4%) was well above the EU 
average 
representing  a  continuous 
positive  progress  on  this  indicator  since  2019 
(88.6%). R&D expenditure in the Netherlands, as a 

(82.5%), 

For a detailed progress assessment towards the various SDGs, see the annual Eurostat report ‘Sustainable development in the 
European Union’; for extensive data on the short-term SDG progress of EU countries, see Key findings – Sustainable development 
indicators; for an interactive visualization of SDG progress of EU countries, see SDG country overview. A high status does not 
mean that a country is close to reaching a specific SDG, but signals that it is doing better than the EU on average. The progress 
score is an absolute measure based on the indicator trends over the past five or six years. The calculation does not take into 
account any target values, as most EU policy targets are only valid for the aggregate EU level. Depending on data availability for 
each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of 29 April 2026. Data refer mainly to the period 2019-2024 or 2019-2025. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

115 

 
 
 
 
 
 
 
in  2019  to  2.29% 

percentage  of  GDP,  saw  a  modest  increase  from 
in  2024,  slightly 
2.14% 
exceeding  the  EU  average  of  2.24%  in  2024. 
Patent  applications  to  the  European  Patent Office 
per million inhabitants increased by 4.2% between 
2019  and  2025,  rising  from  362  to  378  and 
remaining  well  above  the  EU  average,  which 
recorded  a  more  modest  growth  of  2.6%  during 
the  same  period 
(reaching  156  per  million 
inhabitants in 2025). 

The  Netherlands  performs  well  on  several 
SDGs  related  to  sustainability  (SDGs 2,  6,  9 
and 12). It performs well on SDG 12 (Responsible 
consumption  and  production)  having  reduced  its 
material  footprint  per  capita  from  9.5 tonnes  in 
2019  to  8.3 tonnes  in  2024,  well  below  the  EU 
average  of  13.7 tonnes  in  2024.  It  also  performs 
well  on  SDG 2  (Zero  hunger),  but  environmental 
impacts  of  agricultural  remain  a  concern.  The 
Dutch  RRP  includes  investments  to  boost  the 
deployment  of  renewable  energy  and  support  the 
transition to sustainable agriculture. 

is  growing  rapidly 

However,  it  still  needs  to  catch  up  with  the 
EU  average  on  SDGs 7,  13  and  15,  although 
the  progress  is  positive.  On  SDG 13  (Climate 
action),  net  greenhouse  gas  emissions  have 
decreased over time (from 10.7 tonnes per capita 
in 2019 to 8.0 tonnes per capita in 2024) but were 
still above the EU average (6.5 tonnes per capita in 
2024). With regard to SDG 7 (Affordable and clean 
energy),  the  share  of  renewable  energy  in  gross 
final  consumption 
in  the 
Netherlands  (from  8.9%  in  2019  to  20.2%  in 
2024) but still below the EU average (25.2%). The 
Netherlands  also  improved  on  indicators  such  as 
primary  energy  consumption  (from  3.7  tonnes  of 
oil  equivalent  per  capita  in  2019  to  3.0 in  2024), 
but  consumption  remains  slightly  above  the  EU 
average 
in  2024). 
However, between 2019 and 2024, energy import 
dependency increased from 64.3% to 70.6% in the 
Netherlands,  contrasting  with  a  decrease  from 
60.5% to 57.3% in the EU average. Moreover, like 
other  EU  countries, 
the 
population  unable  to  keep  their  home  warm 
enough rose from 3.0% in 2019 to 7.1% in 2024, 
but remained under the EU average of 9.2%.  

(2.7  against  2.0 tonnes 

the  percentage  of 

The Netherlands performs well on most SDGs 
indicators related to  social fairness (SDGs 1, 
3, 4, 5, 8 and 10). The Netherlands outperforms 
the  EU  average  in  most  indicators  related  to 
health,  education,  gender  equality,  and  decent 

work and growth (SDGs 3, 4, 5 8). Historically, the 
Netherlands  has  performed  very  well  on  decent 
work  and  economic  growth 
(SDG  8).  The 
employment  rate  increased  between  2019  and 
2025  (from  81.0%  to  83.4%),  which  makes  the 
Netherlands one of the best performers in the EU 
(EU average: 76.1% in 2025). In addition, the long-
term unemployment rate decreased (from 0.9% in 
2019  to  0.5%  in  2025)  and  is  well  below  the  EU 
average  (1.9%  in  2025).  On  SDG  5  (Gender 
equality), between 2019 and 2025, the gender gap 
for 
tertiary  educational  attainment  slightly 
decreased in the Netherlands from 9.7% to 9.2%, 
and remains below the EU level of 11.3%. 

A few indicators for SDG 1 (No poverty) have 
slightly  improved  in  recent  years  in  the 
Netherlands.  The  housing  cost  overburden  rate 
impacted  6.9%  of  the  population  in  2024  (in 
contrast  to  9.9%  in  2019),  and  the  number  of 
people  at  risk  of  monetary  poverty  after  social 
transfers  decreased  between  2019  and  2024 
(from  13.2%  to  12.1%  of  the  population).  On 
migration,  asylum  and  social  inclusion  (SDG 10), 
the gap between EU and non-EU citizens in terms 
of people at risk of monetary poverty after social 
transfers  decreased  between  2019  and  2024 
(from  25.2%  to  23.3%)  and  was  above  the  EU 
average of 21.1% in 2024. At the same time, the 
gap  between  EU  and  non-EU  citizens  in  terms  of 
employment rates slightly decreased (from 20.8% 
in  2019  to  20.6%  in  2025),  remaining  above  the 
EU  average  (11.8%  in  2025).  The  Dutch  RRP 
includes  reforms  and 
investments  aimed  at 
improving education and creating a resilient health 
system. 

The  Netherlands performs  well  on most  SDG 
indicators related to macroeconomic stability 
(SDGs 8  and  17).  However,  it  still  needs  to 
catch  up  with  the  EU  average  on  several 
indicators  for  SDG 16  (Peace,  justice  and 
strong institutions). The perceived independence 
of the justice system increased from 71% in 2019 
to  75%  in  2025  (well  above  the  EU  average  of 
54% in 2025). Although the Corruption Perceptions 
Index  score  decreased  from  82  in  2019  to  78  in 
2025, it still remains above the EU average of 62 
in  2024.  The  Netherlands  also  performs  better 
than the EU average on most indicators related to 
partnerships for the goals (SDG 17).  

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other annexes. 

116 

 
ANNEX 18: COMPETITIVE REGIONS 

Regional development trends 

Graph A18.1: Labour Productivity growth (2014 - 
2024) and labour productivity (2024), 
Netherlands (NUTS 2 regions) 

to 172% 

in Drenthe 

Regional  disparities  in  the  Netherlands  have 
remained  stable  over  the  last  two  decades, 
with  some  trends  reflecting  differences  in 
labour  productivity, 
innovation  and  R&D 
investments.  Since  2004,  the  Netherlands  has 
remained  above  the  EU  average  in  terms  of  GDP 
per  head  (in  purchasing  power  standard,  PPS).  At 
subnational  level,  GDP  per  head  in  2004  varied 
across Dutch provinces, ranging from 100% of the 
EU  average 
in  Noord-
Holland. Zeeland had  the  highest  annual  real  GDP 
growth  per  head  (1.6%)  from  2004 to  2024. GDP 
growth  per  head  was  lower  than  the  EU  average 
in 7 
regions: Groningen, Zuid-
Holland, Limburg, Utrecht, Drenthe, Friesland and 
Gelderland.  Nevertheless,  all  provinces  followed 
broadly  similar  growth  trajectories  between  2004 
and  2024;  Groningen  was  the  only  exception, 
reflecting  the  impact  of  phasing  out  local  gas 
extraction.  In  2024, GDP per  head  was  high  in  all 
Dutch regions, but some disparities remain. Noord-
Holland,  which 
the  metropolitan 
includes 
Amsterdam  region,  had  the  highest  GDP  per 
head (446) (175% of the EU average).  

out 

12 

of 

Labour  productivity  growth  was  low  in  the 
Netherlands,  with  relatively  small  regional 
disparities  mirroring  differences  in  GDP  per 
head. While productivity in 2024 was higher than 
the  EU  average  in  all  regions  (see  Graph  A18.1), 
the  trends  over  the  last  decade  are  of  concern. 
lower  than  the  EU 
Productivity  growth  was 
average in most regions between 2014 and 2024, 
and  ensuring  long-term  sustainable  growth  is  a 
challenge,  with  only  Zeeland  and  Noord-Brabant 
exceeding  the  EU  average  of  0.7%  (see  Graph 
A18.1).  Productivity  declined  in  the  province  of 
Groningen,  primarily  due  to  the  phasing  out  of 
local gas extraction. 

Source: Commission calculations based on Joint Research 
Centre (JRC) data 

Innovation performance in the Netherlands is 
high, with moderate regional variations  (Map 
18.2).  At  129.1%  of  the  EU  average,  the 
Netherlands  remained  one  of  the  EU’s  four 
innovation leaders (447) (see Annex 4). According to 
the  2025  Regional  Innovation  Scoreboard,  all 
innovators  or 
Dutch 
innovation leaders, above the EU average of 100: 
from  innovation  leaders  Noord-Holland  (139.4) 
and  Utrecht  (136.2)  to  strong  innovators  Drenthe 
(108.4), Zeeland (107) and Friesland (103.2) (448). 

regions  were 

strong 

(446) For contemporaneous comparison of GDP levels in different 
regions (or countries), we use ‘GDP in PPS terms’ to account 
for difference in price levels between regions. GDP growth in 
a specific region is measured in ‘constant prices’ terms to 
correct for inflation in that region. 

(447) European Innovation Scoreboard, European Commission, 

2025. 

(448) Regional Innovation Scoreboard, European Commission, 

2025. 

117 

0.70.31.30.90.80.70.60.50.50.40.20.20.0-3.7100123119119123142109112110104130103122128EUNetherlandsZeelandFlevolandNoord-BrabantNoord-HollandOverijsselLimburg (NL)GelderlandFriesland (NL)UtrechtDrentheZuid-HollandGroningenAverage annual growth2023 (%)Productivity in 2023GDP/hour, EU27 = 100 
 
 
     
 
 
 
Map A18.1:  GPD per head compared with the EU 
average. 

For 

the 

Zeeland  and  Overijssel,  and  R&D  expenditure  by 
SMEs  was  lowest  in  Groningen,  Drenthe  and 
Zeeland (451).  The  regions  with  high  investment 
large  economic  clusters, 
levels  benefit  from 
including  multinationals  and  universities 
(see 
geographic 
example, 
Annex  4). 
concentration  of  academic/engineering  talent  (the 
Delft,  Eindhoven  and  Twente  universities  of 
technology)  shapes  where  capital-intensive  tech 
companies locate their deep tech operations, such 
as  semiconductors  and  photonics (452).  Noord-
Brabant and Limburg stand out for the number of 
patent  applications,  owing  in part  to the  presence 
of major clusters of economic activity (high-tech in 
Noord-Brabant and chemicals in Limburg).  

Map A18.2:  Regional Competitiveness Index 

(1) 2021-2023 average GDP per head in purchasing power 
standard compared with the EU average. 
Source: Commission calculations based on Eurostat 16 July 
2025 data. 

Key challenges for regional 
competitiveness 

R&D  intensity  is  low  in  the  regions  with  the 
lowest GDP per head. R&D expenditure was low 
in Drenthe (1.01%), Friesland (0.91%) and Zeeland 
(0.83%)  in  2019(449).  Those  three  provinces  are 
among those with the lowest GDP per head in PPS, 
and  Drenthe  and  Friesland  are  below  the  EU 
average.  This  is  in  contrast  to  the  high  levels  of 
investment  in  Noord-Brabant  (3.53%),  Groningen 
(2.50%)  and  Gelderland  (2.44%)  (see  Annex  4). 
The  low  R&D  intensity  in  Friesland,  Drenthe  and 
Zeeland  is  related  to  the  absence  of  universities 
other than subsidiaries (450). In 2022, the share of 
R&D  staff  in  companies  with  more  than  250 
in  Friesland,  Drenthe, 
employees  was 

lowest 

(449) REGIO calculations based on 2019 data from Netherlands 
Centraal Bureau voor de Statistiek, Regionaal-Economische 
Kengetallen 2021 | CBS.  

(450) Oevering F. & O. Raspe (2020) Regionaal economische 

verschillen fors toegenomen. Available at: 
https://www.rabobank.nl/kennis/d011301125-regionaal-
economische-verschillen-fors-toegenomen. 

Source: Regional Competitiveness Index, 2.0 

Regional  innovation  strategies  for  smart 
specialisation (453)  (RIS3)  focus  investments 
in  innovation  on  regional  strengths  and 
priorities.  Four  regional  smart  specialisation 
strategies (454)  offer  an  effective 
investment 

(451) Dutch Central Bureau of Statistics, 2025. 

(452) State of Dutch Tech 2026, Techleap. 

(453) European Commission, 

https://ec.europa.eu/regional_policy/policy/communities-and-
networks/s3-community-of-practice/about_en. 

(454) The North-Netherlands RIS3 covers the provinces of 

Groningen, Fryslân and Drenthe; the West-Netherlands RIS 
the provinces of North- and South-Holland, Utrecht and 
Flevoland; the East-Netherlands RIS3 the provinces 
Gelderland and Overijssel; the South-Netherlands RIS3 the 
provinces of Zeeland, North-Brabant and Limburg. 

118 

 
 
 
 
 
 
 
 
 
Table A18.1:Main development trends in the Netherlands 

Source: European Commission based on Eurostat data; categories of regions based on Map A18.1 

regional 

innovation 

framework  for  private  and  public  companies  to 
strengthen 
ecosystems. 
Productivity  growth  in  the  Dutch  regions  largely 
depends on the quality of regional entrepreneurial 
ecosystems,  such  as  clusters  of  collaborating 
firms, 
communities, 
universities and infrastructure (455). Recent reviews 
of the four regional smart specialisation strategies 
confirmed that they are still up to date. 

start-up  and 

scale-up 

Between  2015  and  2024,  the  population 
increased across all Dutch regions, exceeding 
the  EU  average  in  every  region,  except 

Limburg. This was mainly driven by net migration, 
which was positive in all regions, especially in the 
highly  urbanised  western part  of  the  Netherlands. 
Natural  growth  was  smaller  but  still  positive  in 
most  regions,  except  for  the  three  northern 
regions, Limburg and Zeeland. Demographic trends 
act  as  a  primary  driver  for  regional  policies. 
Regions  experiencing  high  population  growth  face 
pressures  on  social  services,  housing  and 
infrastructure (456).  Regions  with  ageing  and 
labour  and  skills 
declining  populations  face 
shortages,  an  increased  need  for  care  services,  a 

(455) Oevering F. & O. Raspe (2020) Regionaal economische 

verschillen fors toegenomen. Available at: 
https://www.rabobank.nl/kennis/d011301125-regionaal-
economische-verschillen-fors-toegenomen.    

(456) European Commission, The Impact of Demographic Change 
in Europe https://commission.europa.eu/strategy-and-
policy/priorities-2019-2024/new-push-european-
democracy/impact-demographic-change-europe_en.  

119 

 Main development trendsTransition regions (population 1.16 million)Drenthe and Fryslân are relatively sparsely populated, peripheral provinces with limited business-research networks. Both regions face declining natural population growth. Economic growth increasingly depends on innovation ecosystems anchored in regional campuses, clusters, and science parks. The Flevoland region's  economic performance is improving. In Fryslân, Drenthe and Flevoland GDP per head is close to the EU average.More developed regions (population 16.71 million)Ten of the twelve Dutch provinces are more developed regions. GDP per head is more than 20% above the EU average in five of these regions: Noord-Holland, Utrecht, Noord-Brabant, Zuid-Holland, and Groningen. Due to the phase out of natural gas extraction, Groningen has seen a strong decline in GDP per head over the last decade. With a -2.4% GDP per head growth rate Groningen was also among the 20% of the EU's poorest performing regions in 2023. The provinces of Groningen, Zeeland and Limburg face declining natural population growth. By contrast, the Randstad area (Amsterdam and Utrecht) continues to attract investment and young people with high levels of education, and this area is extending to Nijmegen in the east. The high growth in the Eindhoven region (Noord-Brabant) is based on R&D and high-tech manufacturing. Specific territories Just transition regions: The Netherlands just transition plan identified six regional areas facing industrial transition challenges due to the importance of emission-intensive industries in their economies. These areas are: (i) the province of Groningen together with the municipality of Emmen; (ii)  IJmond; (iii) Groot-Rijnmond; (iv) West-North-Brabant; (v) Zeeuws-Vlaanderen together with the Vlissingen port area; and (vi) South-Limburg. Half of the 2021-2027 Just Transition Fund budget is allocated to the Groningen/Emmen region, due to the phase out of natural gas extraction in 2024. All these areas fall within the five emission-intensive industrial area clusters identified in the Dutch Climate Agreement and the National Energy and Climate Plan.The Netherlands’ coastal provinces have distinct blue economy strengths and risks, requiring tailored investment. North and South Holland rely on major ports (e.g., Rotterdam, IJmuiden) for maritime transport, offshore energy, and fisheries, but face spatial conflicts from wind farm expansion and infrastructure demands. Zeeland thrives on aquaculture (e.g., shellfish farming) and coastal tourism, though water quality, climate change, and invasive species pose threats. Friesland and Groningen depend on smaller-scale Wadden Sea fisheries, tourism, and emerging offshore wind supply chains, but must navigate environmental protections (e.g., Natura 2000) and competing spatial priorities. 
 
 
 
   
 
Table A18.2:Key regional indicators (at NUTS 2 level) for the Netherlands 

Source: Eurostat and JRC 
Dark green – the indicator is at least 120% of the EU average. 
Light green – the indicator is at least 100% but less than 120% of the EU average. 
Yellow – the indicator is at least 90% but less than 100% of the EU average. 
Light red – the indicator is at least 75% but less than 90% of the EU average. 
Dark red – the indicator is less than 75% of the EU average.  
This colour scale applies to ‘positive’ indicators where higher values are favourable. 
For ‘negative’ indicators (where higher values are unfavourable), the colours are 
 reversed. 

reduced  tax  base  and  underused  or  reduced 
infrastructure. 

Skilled  labour  shortages  are  an  impediment 
to  regional  development,  including  the  clean 
industrial  transition.  Green  jobs  are  strongly 
concentrated  in  western  Netherlands,  with  the 
provinces 
and 
northern, 
underperforming. 
green 
employment (457),  with  22%  of  jobs  classified  as 
sustainable  and  competitive,  was  above  the  EU 
average of 15%.  

However, 

southern 

eastern 

Access to essential services is generally good 
in  the  Netherlands,  with  some  regional 
differences.  The  share  of  people  with  access  to 
healthcare  within  a  10-minute  drive  is  above  the 

(457) Regional Competitive Environmental Sustainability (RCES) 

indicator, 
https://publications.jrc.ec.europa.eu/repository/handle/JRC136
629. 

EU  average  in  all  Dutch  regions,  except  Friesland, 
Drenthe and Groningen in the north. In rural areas, 
the  share  is  lower  on  average  but  still  above  the 
EU  average  in  most  regions  (see  Annex  15).  The 
average  share  of  children  in  rural  areas  with  a 
primary  school  within  a  15-minute  walk  is  much 
higher  than  the  EU  average (458).  In  contrast  to 
most EU regions, students from Dutch rural areas 
achieve higher PISA 2022 scores than their urban 
peers  and  rank  among  the  highest  in  all  EU  rural 
areas.  However,  the  urban–rural  gap  in  post-
secondary educational attainment is above the EU 
average  (25.4%  vs  22.4%):  young  people  from 
rural  areas  (aged  25–34)  participate  in  post-
secondary  education  less  often  than  their  urban 
peers (see Annex 13).  

(458) Eurostat and JRC data, European Commission, 2023. 

120 

GDP per head (PPS, index)Real GDP per head growthReal productivity growth (per hour worked)Employment rate 20-64Unemployment rateAccess to alternative fuel infrastructureInnovation performanceRegional Competitiveness Index (RCI)EU27=100Average annual % changeAverage annual % change% of population aged 20-64% of labour forceElectric vehicles charging points within 10 kmPerformance groupEU27=10020242014-20242014-202420252025202220252022EU100.01.40.776.16.0287.5 100.0Netherlands134.01.30.283.43.91842.1Leader137.0Groningen117.0-1.9-3.080.44.5577.3Leader-120.0Friesland (NL)98.01.40.282.94.0204.1Strong-117.0Drenthe96.01.10.283.23.6195.8Strong119.0Overijssel116.01.90.584.23.7492.4Strong+126.0Gelderland114.01.50.584.13.4619.1Leader-136.0Flevoland103.01.70.684.43.7726.5Strong+141.0Noord-Holland175.01.50.384.43.83338.0Leader151.0Zeeland113.02.01.084.52.2275.8Strong-141.0Utrecht162.01.40.185.43.82448.0Leader143.0Zuid-Holland129.01.00.082.04.83533.0Leader-119.0Noord-Brabant139.01.70.784.13.51071.9Leader-141.0Limburg (NL)110.01.00.281.03.0485.8Leader-131.0 
 
 
 
  
 
Demographic trends(459), 
including ageing 
population  and decline  in  natural  growth; 
outmigration  of  youth  to  urban  centres in 
peripheral  and  border  areas  in  the  northern, 
southern  and  eastern  regions, impact access 
to quality  basic  services  (education,  health, 
public  transport).   The  Dutch  Government, 
through the former Regio Deals (2018-2025)  and 
from 2025 the Vital  Regions Programme, aims to 
support  the  revitalisation  of  11  peripheral/border 
areas  and  their  municipalities  (improved  safety 
and liveability; sustainable and accessible services; 
and 
adequate 
economic/employment  perspectives)  as  well  as to 
support cross-border cooperation(460) (Map A18.3).  

education 

health, 

funding of EUR 2.51 billion up until 2030). One of 
the  project’s  three  pillars  is  accelerating  the 
construction  of  local  housing (462).  The  price-to-
income ratio (see Annex 16) is high in parts of the 
country, in particular in the western Randstad area 
and  cities  in  the  centre  of  the  country  (along  the 
Randstad-Arnhem-Nijmegen axis)(463) (Map 18.4). 

Map A18.4:  House purchase capacity relative to 
income, NUTS 3, 2024 

Map A18.3:  Nationaal Programma Vitale Regio’s 
(‘National programme for vital regions’) 

Source: ESPON-H4ALL 

Source: Ministry of the Interior and Kingdom Relations 

Affordable  housing  is  a  growing  concern  in 
the  Netherlands,  and  it  could  affect  the 
attractiveness  of  regions  and  aggravate 
existing  labour  shortages (461).  To  retain  and 
strengthen 
in 
Brainport  Eindhoven, 
the  Dutch  government 
launched  Project  Beethoven  in  March  2024  (with 

local  microchip 

industry 

the 

(459) Centraal Burau voor de Statistiek, https://www.cbs.nl/nl-

nl/dossier/dossier-verstedelijking/waar-groeit-of-krimpt-de-
bevolking. 

(460) https://www.elkeregiotelt.nl/npvr. 

(461) https://www.oxfordeconomics.com/resource/what-is-driving-

european-cities-housing-affordability-challenge/.  

including 

industries, 

High  energy  prices  negatively  impact  the 
competitiveness  of  regions  with  energy-
intensive 
just 
transition regions (464). Continued investment in 
innovative  clean  technologies  (including  circular 
economy  opportunities)  and  energy  infrastructure 
could  help  energy-intensive  industrial  areas  with 
high greenhouse gas emissions to fully realise the 
potential of the green transition.  

the 

Grid  congestion  has  become  a  serious 
bottleneck,  affecting  regional  growth  and 
slowing  the  energy  transition.  The  capacity  of 

(462) https://brainporteindhoven.com/nl/strategie-en-
organisatie/agenda-met-het-rijk/beethoven.  

(463) https://www.elkeregiotelt.nl/npvr. 

(464) The Netherlands’ territorial just transition plan identifies six 

territories facing industrial transition-related challenges (incl. 
those of a wider socio-economic nature): Groningen-Emmen; 
IJmond; Groot-Rijnmond; West Noord-Brabant, Zeeuws-
Vlaanderen and Zuid-Limburg.  

121 

 
 
 
 
 
 
 
 
 
Map A18.5:  Capacity of electricity network 

capacity, 

the  electricity  grid  is  constrained  in  all  provinces 
due  to  the  high  volatility  of  supply  and  demand, 
particularly  in  the  centre  of  the  country  (Utrecht, 
Gelderland,  parts  of  Flevoland) (465).  Apart  from 
national  investments  in  network  distribution  and 
testing  and  piloting 
transmission 
localised 
innovative  solutions.  such  as  smart 
grids (466),  energy  storage  and  flexibility  markets, 
could  help  alleviate  grid  congestion  (Country 
Report  2025).  To  achieve  this,  positioning  regions 
affected  by  grid  congestion  as  test  beds  for  such 
technologies  is  a  promising  avenue  for  both 
removing  infrastructure  bottlenecks  and  building 
regional innovation capacity. 

for 

despite 

Regions  and  municipalities  face  increasing 
financial  pressure  amid  reduced  national 
funding 
their 
innovation 
increased  responsibilities  and  enabling  role 
for  regional  growth  and  competitiveness. 
Dutch  provinces  and  municipalities  have  limited 
income  from  tax,  relying  mostly  on  national 
funding  transfers.  Tax  revenues  from  subnational 
governments  in  the  Netherlands  make  up  almost 
5% of general  government tax revenue and 9.6% 
of  all  subnational  government  revenue (467),  both 
significantly below the EU average (25% and 40%, 
respectively).  Therefore,  subnational  governments 
are highly dependent on intergovernmental grants 
and  subsidies  (accounting  for  almost  75%  of 
subnational revenues), well above the EU average 
(46%) and OECD average (42%) (468).  

(1) Colour legend: 
Red: shortage of transport capacity with waiting list. 
Orange: under investigation with waiting list. 
Yellow: limited transport capacity available without waiting 
list. 
White: transport capacity available without waiting list. 
Source: https://www.netbeheernederland.nl/netcapaciteit-en-
flexibiliteit/capaciteitskaart, 18 December 2025 

(465) Netbeheer Nederland, 

https://data.partnersinenergie.nl/capaciteitskaart/totaal/afna
me. 

(466) For example, the GENIUS (Grid Efficiency Network Integration 
for Universal Sustainability) smart grid project to optimise 
energy infrastructure and usage at the Technical University 
of Eindhoven campus, 
https://www.tue.nl/en/research/institutes/eindhoven-institute-
for-renewable-energy-systems/projects/genius.  

(467) OECD (2025), OECD Dashboard on Subnational Government 

Structure and Finance, 
https://www.oecd.org/en/data/dashboards/oecd-dashboard-
on-subnational-government-structure-and-finance.html. 

(468) OECD/UCLG (2022), World Observatory on Subnational 
Government Finance and Investment, https://www.sng-
wofi.org/country_profiles. 

122 

 
 
 
 
 
ANNEX 19: TRANSPORT 

This  Transport  Annex  presents  the  state  of  play 
and the challenges the Netherlands faces with the 
implementation  of  the  trans-European  transport 
network  (TEN-T),  the  European  railway  traffic 
management  system  (ERTMS),  the  roll-out  of 
sustainable aviation fuels (SAF), and road safety. 

The  Netherlands  is  crossed  by  two  European 
Transport Corridors (ETCs North Sea – Baltic 
and the North Sea – Rhine – Mediterranean). 
The TEN-T in the Netherlands comprises 2 513 km 
of  rail  (846 of  which  are  on  the  core  network), 
2 088 km  of  road  (670  of  which  on  the  core 
network)  and  1 435 km  of  inland  waterways  on 
(including  two  core 
the  TEN-T,  five  airports 
airports), 58 ports (including 11 core ports) and 26 
urban nodes (469). 

TEN-T 

such 
parameters, 
track  gauge  and  axle 

It  has  one  of  the  densest  and  busiest  rail 
networks in Europe, reflecting its central role 
in  European transport with  logistic  hubs  like 
the  Port  of  Rotterdam  and  Schiphol  airport. 
The  system  is  well-integrated  and  meets  key 
as 
technical 
electrification, 
load. 
Transport infrastructure forms the backbone of the 
highly 
Dutch 
internationalised  model  that  relies  heavily  on 
efficient  import  and  export  flows  and  seamless 
connectivity  to  European  and  global  markets.  NL 
invests  strongly  in  maintenance  and  renewal  of 
infrastructure. However, needs significantly exceed 
available  funding,  resulting  in  prioritisation  and 
delayed required renewal.  

underpinning 

economy, 

a 

the  core 

To  complement 
cross-border 
projects  on  the  TEN-T  core  network  and 
ensure  efficient  traffic  flows  along  the  two 
ETCs  crossing  the  Netherlands  towards 
Belgium  and  Germany,  it  is  essential  to 
address  capacity  constraints  on  key  port 
hinterland  connections.  In  particular,  rail  links 
connecting the ports of Rotterdam and Amsterdam 
to  the  European  hinterland  require  targeted 
capacity  upgrades, including  additional  tracks  and 
operational  separation  of  freight  and  passenger 
services  where  feasible,  in  order  to  improve 
reliability  and  punctuality.  Moreover, past and 
ongoing  cross-border  pilot  projects  with  Germany 

are a positive step. It would be important to move 
towards  broader 
implementation  across  other 
relevant rail border sections.  

In  parallel,  capacity  upgrades  in  major  rail 
nodes  such  as  the  Randstad  conurbation  are 
prioritised.  Their  objective  is  to  resolve  long-
standing structural bottlenecks and to enhance the 
robustness  of  national  and 
international  rail 
services. 

in 

investment  priorities 

Dutch 
inland 
waterways  include  the  modernisation  and 
capacity  enhancement  of  inland  waterway 
corridors  connecting  the  Rhine,  Meuse  and 
Scheldt  basins.  This  includes  lock  construction, 
widening and upgrading works on key corridors to 
safeguard reliability, accommodate larger vessels, 
and support modal shift objectives. 

railways  and 

Implementing the ERTMS is key to digitalising 
the 
to  modernising  and 
railway  operations  across 
harmonising 
Europe.  The  ERTMS  ensures  the  safety  of  rail 
networks  by  providing  a  unified  signalling  system 
that  significantly  reduces  the  risk  of  accidents.  It 
also provides interoperability between national rail 
systems, improving cross-border train movements. 
Finally, the ERTMS enhances network capacity and 
the 
operational 
competitiveness of the rail sector. 

efficiency, 

increasing 

Scaling  up  ERTMS  deployment  is  key  to 
maximising capacity on the country’s densely 
used  rail  network  and  enabling  efficient 
traffic  management.  As  of  late  2024 (470),  the 
ERTMS  was  operational  on  36%  of  the  TEN-T 
network. To meet its national plan’s ERTMS roll-out 
target  by  2035,  the  Netherlands  aim  to  deploy 
ERTMS  on  an  additional  length  of  334 km.  Cross-
border sections are of particular importance in this 
context. 

While  planning  and  permit  procedures  and 
approval of projects are complex and lengthy 
in  the  Netherlands,  there  are  no  significant 
implementation  delays  overall.  Moreover, 
harmonising  technical  and  operational  rules  with 

(469) TENtec Information System, according to Reg. 2024/1679. 

Coordinator Matthias Ruete. 

(470) Based on ERTMS – Third work plan of the European 

123 

 
 
 
 
 
Table A19.1:ERTMS deployment in the Netherlands. 

Source: Based on ERTMS – Third work plan of the European Coordinator Matthias Ruete. 

Map A19.1: TEN-T Cross-Border & National Priority Sections in the Netherlands 

the minimisation of national  rules in line with the 
EU  directives  on  rail  interoperability  and  safety 
remains  critical  to  ensure  seamless  cross-border 
rail transport. 

124 

 
 
 
 
 
 
 
 
 
balance  between 
approach pillars could be considered (473).  

the  different  safe  system 

Graph A19.1: The Netherlands' road fatalities per 
million 2024 

Source: Report at the Mid-Point - Netherlands, SWD(2026) 52 
final. 

The  map  below  presents  the  roads  where  the 
safety of the infrastructure is poor and thus where 
urgent action is required. 

Map A19.1:  The Netherlands' road safety map 

The  Netherlands  hosts  two  operational 
sustainable aviation fuels (SAF) facilities and 
is  home  to  one  of  the  most  important 
European  aviation  hubs 
(i.e.  Amsterdam 
Schiphol  airport).  It  also  has  a  long  list  of 
synthetic sustainable aviation fuels (eSAF) projects 
in  the  pipeline,  but  none  have  reached  Final 
Investment Decision as yet (471). The planned State 
aid  for  these  projects  could  amount  to  EUR 300 
million 
the 
the 
Netherlands’  participation  in  double-sided  auction 
mechanisms as part of its contribution to the eSAF 
Early  Movers  Coalition  would  help  them  reach 
commercialisation.  To  this  end,  the  Netherlands 
would  benefit  from  using  EU  ETS  and  ReFuelEU 
Aviation  penalty  revenues  towards  supporting  the 
deployment of the above-mentioned SAF projects.  

technology,  but 

to  mature 

Road  crashes  impose  an  enormous  social, 
economic  and  health  burden  on  the  EU 
economy.  The  external  socio-economic  costs  of 
fatal,  serious  and  minor  injuries  have  remained 
persistently  high  despite  the  progress  made  in 
reducing  crash  frequency  and  severity.  These 
resources 
innovation, 
education,  healthcare  and  other  crucial  public 
investments (472). 

could  otherwise 

fuel 

In 2024, the Netherlands was well below the 
EU average (45) with 32 fatalities per million 
inhabitants.  Compared  with  the  EU  average,  the 
the  Netherlands 
distribution  of  fatalities 
featured  a  high  proportion  of  cyclists  and  road 
users  aged  over  65  years  old.  Also,  according  to 
police  data,  the  number  of  fatalities  within  urban 
areas  increased  over  the  2019-2023  period,  with 
significant  high 
increases  being  recorded  for 
pedestrians and cyclists.   

in 

A  target  of  halving  road  casualties  by  2030 
will  be  challenging  for  the  Netherlands, 
without it adopting additional measures. This 
is especially the case for serious injuries, which are 
expected  to  rise  towards  2030.  To  that  end,  the 
Netherlands  is  carrying  out  analyses  to  measure 
the  effectiveness  of  the  implemented  measures 
to  chieve  further 
and  explore  new  actions 
this  context,  a  better 
improvements.  Within 

Source: TENtec Information System and TEN-T map library – 
European Commission 

(471) ReFuelEU Aviation Annual Technical Report 2025 -– 2024 in 

review | EASA (page 92). 

(472) Report on the implementation of the EU Road Safety Policy 

framework at the Mid-Point, COM(2026) 77 final. 

(473) More details in Report on the implementation of the EU Road 
Safety Policy framework at the Mid-Point – Netherlands, 
SWD(2026) 52 final. 

125 

 
 
 
 
 
 
 
126