Dutch Industry Buckles Under Energy Transition and Global Pressure

From “Dutch Disease” to “German De-Industrialization,” the energy transition is no longer a distant threat but a pressing issue already impacting the Dutch economy.

Europe’s ongoing energy transition, driven by the need to reduce dependence on risk-prone suppliers like Russia, the Middle East, and Africa, continues to receive support from the European Union and its member states. The push for more renewables—especially offshore wind, solar, and increasingly biofuels—is not only reducing CO? emissions but also threatening the manufacturing and production base of European countries. After years of deindustrialization in Germany, another major economy is now showing signs of strain. The Netherlands, once known for its so-called “Dutch Disease” economy, based on vast natural gas reserves and revenues, is becoming a second Germany as its industrial base erodes due to high energy costs and a lack of investment.

At the same time, with little media attention, Europe’s central refinery basin—spanning Antwerp, Rotterdam, and Amsterdam—is falling apart. An expanding list of divestments, closures, and bankruptcies is threatening not only fuel supplies but also Europe’s pivotal chemical industry.

Related: Gasoline Prices Rise Despite Oil Benchmarks Falling

Years of neglect, anti-hydrocarbon policies, and an almost religious belief in the “makeability” of the economy have led to high energy prices and dwindling investments. After years of industry pleas, Brussels is finally reacting. Last Tuesday, the European Commission presented an action plan to address the wave of chemical plant and refinery closures in the EU. While a positive step, it may already be too late for many companies, particularly in the Port of Rotterdam region, where closures and divestments are accelerating due to high energy prices and market volatility. EU Commissioner for Industry, Thierry Breton, stated that over 20 companies have closed in recent years. Brussels blames high energy prices, global overcapacity, and Chinese competition.

Dutch downstream and chemical companies are hit particularly hard by this toxic mix, compounded by ESG regulations and ongoing conflict over nitrogen emissions, which hinder expansions and power grid access. It is unclear if Dutch sites like Moerdijk, Rotterdam, and Geleen will benefit from Brussels' action plan targeting critical complexes.

Meanwhile, Europe’s playing field remains uneven. Chinese dumping and excessive EU bureaucracy add to the pressure. Yet bureaucracy alone isn’t forcing companies to leave—it’s the sheer cost of operating, especially in the Netherlands. Dutch firms face the EU’s highest energy prices, an unstable grid, and the real risk of winter blackouts. The sustainability push—seen by some as a "Holy Grail"—is increasingly cited as a cause of deindustrialization.

The Netherlands’ competitiveness, long its key attraction for global investors, is now eroding. The Trump Tariff Wars, rising global trade tensions, and domestic operational costs are major concerns. A recent Dutch Statistics Office (CBS) report noted that 95% of industrial exporters are worried about global trade policy over the next 12 months, up sharply from 41% in March 2023.

The situation is now affecting even green-focused firms. Global Energy Storage Group (GES) is leaving the Netherlands for better opportunities in Asia. It sold its 212,000 m³ terminal in Rotterdam to French firm Tepsa. Gunvor is also shutting down its Rotterdam oil terminal, citing the unstable Dutch investment climate, alongside the closure of its refinery. Chemicals firm Vynova plans to close its PVC factory at the Chemelot site. Other closures in the past year include LyondellBasell, Tronox, and Indorama.

This industrial unraveling threatens more than jobs—it could undermine the EU’s defense capabilities. The Netherlands is critical to Europe’s energy and security architecture, especially as a fuel supplier to NATO via Rotterdam’s infrastructure. Without robust in-house refining and chemicals capacity, both Europe’s industry and security are at risk. Dutch politicians would do well to recognize the scale of what’s at stake.

By Cyril Widdershoven for Oilprice.com

More Top Reads From Oilprice.com:

• OPEC Bans Five Media Outlets From Vienna Meeting
• Russia’s Oil Export Revenues Dip 14%
• Saudi Arabia's Production Increase Sparks Credibility Concerns