Three recommendations on the heat transition in preparation for the establishment of new municipal heat programs

In the Netherlands, municipalities are responsible for implementing the heat transition. To facilitate this transition, municipalities developed Heat Transition Visions (Transitievisies warmte (TVWs) by the end of 2021. These TVWs must be converted into concrete heat programs by 2026. According to the Dutch environmental organisation Natuur & Milieu, the current TVWs lack the clarity and ambition needed to meet the interim 2030 goals of the Climate Agreement. These conclusions are based on their research into the TVWs of 40 different municipalities, detailed in a research report published in August 2024.

On August 22, 2024, the prestigious scientific journal Science published a study examining approximately 1,500 measures implemented by countries to achieve CO2 reduction. The research indicates that, in general, a combination of measures, including subsidies, regulations, and pricing policies, leads to the most significant CO2 reduction. The researchers also found that the effectiveness of different types of measures varies by sector and between developed and developing countries. An important recommendation for governments is to focus on sector-specific best practices when designing climate policies. For the construction sector, where the private sector also plays a significant role, employing a mix of complementary policy instruments proves most effective.

The report by Natuur & Milieu offers several recommendations for the national government to help achieve the climate goals for the heat transition. In this update, we highlight some of these recommendations. We believe that, with the proper implementation of these measures, a mix of complementary measures can be achieved, reinforcing each other and significantly increasing the chances of success of the heat transition.

Natuur & Milieu recommends that the national government enhance its leadership by providing more clarity about the targets municipalities must achieve by 2030. This includes clearly specifying the type of objectives: whether it's a percentage of CO2 reduction, a percentage reduction in natural gas consumption, or a specific number of homes that need to be disconnected from natural gas. Clear expectations for the coming years are essential for local governments, businesses, and households alike.

According to Natuur & Milieu, this national objective should be detailed per province, leveraging existing collaborative structures such as the Regional Energy Strategies (RES regions). This approach allows the pooling of municipal capacity and expertise. Additionally, Natuur & Milieu urges the national government to enhance municipalities' financial capabilities to ensure that developed expertise is not lost.

Natuur & Milieu suggests improving the accessibility of subsidy schemes for consumers and businesses by making them more straightforward and transparent. They also recommend increasing investment security for municipalities and businesses by extending the duration of these subsidies.

Currently, the following subsidies are relevant to the heat transition:

• The SDE++ subsidy is the main subsidy for businesses focusing on the production of renewable energy and the implementation of CO2-reducing technologies.
• The Heat Network Investment Subsidy (WIS) supports investment costs for the installation of heat networks, making collective heating more affordable.
• The Investment Subsidy for Renewable Energy and Energy Saving (ISDE) provides subsidies for insulating homes, preparing them for collective heating systems operating at lower temperatures.
• The ISDE-subsidy, together with the Subsidy for Gas-Free Rental Housing (SAH), offers subsidies to residents, homeowners' associations, and landlords to connect to heat networks.

A parliamentary letter dated July 3, 2023 (ref: DGKE-DE/ 27245405), indicates that the Ministry of Housing and Spatial Planning is developing new subsidy schemes to provide comprehensive and effective subsidies for the sustainability of the built environment.

As of January 1, 2026, municipalities are required to convert their TVWs into heat programs under the Environmental Act and update them every five years. A heat program is a more binding instrument compared to a TVW. This change is based on the Municipal Heat Transition Instruments Act (WGIW), which is currently awaiting approval from the Senate. The WGIW grants municipalities the authority to designate areas within their environmental plans that must transition to sustainable heat sources. This is a significant authority with potentially broad societal impacts.

In June 2024, a new proposal for the Collective Heat Act (WCW) was submitted to the House of Representatives. If enacted, this legislation would transfer ownership of heat companies to municipalities. The WCW aims to increase public control over the implementation and operation of collective heat networks, promote sustainable collective heat, establish transparent and cost-based tariff regulation for consumers, and ensure the security of collective heat supply. The proposed legislation includes provisions on consumer protection, sustainability, heat pricing, and the division of responsibilities for heat production and distribution.

Natuur & Milieu recommends that the national government provide municipalities with extensive datasets on the housing stock in their municipalities, including information on building age, property types, size, ownership, and local heat sources. Where possible, Natuur & Milieu suggests incorporating these elements into the WGIW. Finally, they advise providing standard formats for contracts, tender procedures, and the heat programs themselves.