AbstractThis paper presents the main features of the Dutch covenant approach regarding the control of industrial emissions. The covenants are agreements between central government, licencing authorities and particular sectors of industry. The agreements provide for detailed arrangements regarding the implementation of sector specific medium and longer term emission reduction targets. Companies are expected to draw up medium term company environmental plans which after approval by the authorities will serve as a basis for formal licencing procedures. Central government and licencing authorities will take appropriate measures to ensure a co‐ordinated approach in licencing and to avoid as much as possible distortions in competitive relations. Implementation of the covenants is being monitored and evaluated by Sectoral Consultative Committees that will issue annual progress reports to the Minister of the Environment.