Energy & Chemistry
Event Summary – 24 April, 2018
The Dutch chemical industry is of great importance to the Dutch economy. However, it is also responsible for about 10% of the country’s total GHG emissions. In the light of the Paris Agreement, the industry has set a target of reducing its carbon emissions by 80 to 95 % by 2050. How does the industry plan to do this? What is the role of the energy sector? Further, which stakeholders need to be involved in this process?
On 24th April, YES-DC invited Reinier Gerrits (VCNI), Niki Lintmeijer (Berenschot) and Wiek Kleijne (AkzoNobel) to shed their light on these and other related topics.
The reason that the chemical industry is often overlooked in the climate debate is that it largely serves as a supplier to other industries. However, this is exactly why the debate should not only be centered on the chemical industry itself, but also on how the industry contributes to other sectors. There is a huge potential to create a spill-over effect, as other industries are increasingly looking for ways to make their supply chain more sustainable.
Innovation is needed
Reinier and Niki presented the findings of their recently released Chemistry for Climate Report, which is a roadmap for the Dutch chemicals industry towards 2050. Its findings indicate that achieving the industry’s carbon reduction target is feasible through strong innovation programmes and the right mix of technologies, such as recycling, bio-based feedstock, electrification, energy efficiency and CCS/CCU. While from a technological perspective, everything is possible, cost curves of innovative technologies are a bottleneck.
A short movie of this report can also be downloaded here.
Risks and opportunities
Not surprisingly, these innovations require large long-term (additional) investments; 26bn in the chemical industry and 37 bn in the energy industry. Moreover, investments have to be made sooner rather than later to stay ahead of the curve to have the desired effect. There are several bottlenecks that the industry faces when it comes to attracting capital for these projects. Firstly, the industry is competing for the same money with the renewable energy sector, which generally has a better reputation when it comes to climate solutions. Secondly, most of the innovative technologies under development are not yet economically feasible, which requires a long-term investment horizon, and makes them riskier than investments in established technologies. However, there are also opportunities, especially when it comes to creating synergies between chemical and energy companies. E.g., offshore wind is likely to become an important energy supplier to the chemical industry.
Government and policies
From a policy perspective, a global CO2 price could speed-up the process, as it would bring the break-even price for new technologies down, which could incentivise investments in innovative projects. Until that happens, the industry is trying to bring abatement costs down. Moreover, the role of the government is crucial in enabling upscaling of demonstration projects and to maintain the competitiveness of the Dutch chemical industry during the transition. Therefore, it needs to be clear on the routes that can be taken, so the industry can implement the necessary changes. Moreover, while there is some cooperation between different cross-border industrial clusters, there are hardly any projects on a European scale. The EU could play a supporting role in ensuring a level playing field.
As one of the larger chemical companies in the Netherlands, AkzoNobel plays an important role in achieving the industry’s emissions reduction target. AkzoNobel has set the ambition to take a leading role in this process, which translates into a target of becoming carbon neutral by 2050. Part of its strategy is to make use of the trend towards a low-carbon economy to develop new business opportunities. An example of this is the company’s business in China, where stricter environmental regulations have resulted in a competitive advantage over companies that operate in a less environmentally friendly manner.
In recent years, AkzoNobel has already managed to significantly reduce its carbon footprint, mostly by using bio-based energy resources. The company expects to speed-up this process once renewable energy production increases. While still expensive, (green) hydrogen could eventually become a game changer in the industry. Moreover, while electrification plays an important role in transitioning towards a low-carbon industrial process, biomass is still needed in order to provide sufficient energy supply during the transition.
For our next event we will focus on the connection between Energy and Chemistry. In order to get a better grasp of what this entails, Niki Lintmeijer, one of the authors of the ‘Roadmap for the Dutch Chemical Industry towards 2050‘, will describe the context of the Industry. Reinier Gerrits from VCNI and Wiek Kleijne from AkzoNobel will discuss concrete actions that will be taken in order to make current processes CO2 neutral. This means the focus will lie on what will be done, rather than on what can be done. During the event the following questions will be addressed:
- How can the Dutch chemical industry reach a reduction of 55 Mtonne CO2eq?
- What is the relation between the chemical industry and the energy sector?
- Which other stakeholders need to be involved to achieve the CO2 reduction goals?
- 19:00 - 19:30
- Walk in
- 19:30 - 19:45
- Introduction by YES-DC and Reinier Gerrits
- 19:45 - 20:30
- Niki Lintmeijer
- 20:30 - 20:45
- 20:45 - 21:30
- Wiek Kleijne
- 21:30 - 21:50
- 21:50 - 22.00
- Announcements from YES-DC and closure
- 22.00 -