4 most significant challenges in the transition of the chemical industry

17 March 2022, Harm Hubbeling

The impending chemical transition is about making the chemicals industry green and/or circular, whereby the industrial organizations are looking for alternative sources of hydrocarbons (the C and H atoms) to oil and gas. What is the current state of the chemical transition in the Netherlands? Is the chemical industry ready for it, have sources been found or will we have to keep searching?

About this blog series

The industrial sector is facing the substantial challenge of going green. For example, industry must be climate neutral by 2050, although the demand for industrial basic products will remain. Furthermore, by 2030, emissions of greenhouse gases must have been cut by at least 55% (compared to levels in 1990). How can industrial firms implement circularity and sustainability and how can you ensure that your business premises are made climate-proof and future-proof? In this series of blogs, our experts will examine a whole range of issues such as these. This third part will discuss the transition of the chemical industry in the Netherlands. 

 

Fortunately, innovation and developments have not ground to a halt. Last year a huge increase in demand from industry to adapt existing technical equipment was recognized and new chemicals sites were established. We have experienced this at TAUW as well. In order to make the transition of the chemical industry a success, we will need to get on top of the challenges. This article discusses the 4 most significant challenges in the chemical transition.

Challenge 1: Looking for alternative sources

Petroleum and natural gas are the most important raw materials for the chemical industry, but the supply of these substances is finite. Which is why we are looking for alternative, circular sources. It has been demonstrated in recent years that these exist. An increasing number of parties are now focusing on recycling, or making ‘waste’ circular, as a source for the chemicals industry. The technical term is waste-to-chemicals. ‘Waste’ that contains a source of carbon and/or hydrogen can be transformed into raw materials again, from which all kinds of new products can be established. Even from waste flows that, until recently, were regarded as non-recyclable (and were therefore incinerated).

The ‘plastic soup’ found in all kinds of waterbodies (sea, rivers, canals, etc.) is also suitable for this processing and has value. Nonetheless, we now need to ensure (at global level) that we stop dumping waste materials in the water.

Sources of carbon and hydrogen can also be extracted from waste flows from agriculture and horticulture. Moreover, besides generating electricity, the way has been paved for creating hydrogen from water by means such as wind farms at sea. In due course, all these new sources will enable us to replace the traditional fossil fuels with more circular sources. 

Successfully completing the chemical transition will require existing equipment to be adapted and/or new facilities to be built. It goes without saying that this will require the necessary financial investment. It is often the case that the money is there, but (unfortunately) there is another issue, as you will see in the second challenge.

Challenge 2: Finding nitrogen space and rights

In recent years, the nitrogen file has caused a lot of initiatives and innovations to initially be put on hold. You see, it had to be demonstrated down the smallest detail that new and existing initiatives did not have any adverse effects on nature in terms of nitrogen deposition. Initiatives cannot get off the ground without ‘nitrogen space and rights’. It is obviously possible to reduce nitrogen deposition to zero, but it is not always necessary. ‘Nitrogen space’ is often discovered in existing permits. Finding this is a mammoth task in itself, but it is worthwhile. In 90% of cases in practice, space is found and this soon spares the need for significant extra investment. This scope will enable you as a business owner to keep developing within the nitrogen space. In this regard, it is important that this ‘space’ be enshrined in a permit under the Nature Conservation Act. TAUW can calculate this available nitrogen deposition space for you, to facilitate the process of obtaining a permit.

Challenge 3: Collective pioneering

Unknown is often unloved. Which seems sensible enough. New (and yet unproven) technologies crop up all the time and the government subsequently needs to make these licensable. Adopting a healthy, critical attitude to these is therefore prudent. But we should not get caught up in a situation in which (too) many (unworkable) requirements are set prior to a permit being issued. It goes without saying that the companies will need to adequately and transparently explain with their advisors what it is they are going to be doing. The chemical industry is very innovative and is therefore often ahead of the field. As a result, there is a pronounced need for cooperation and input from the government. Only collective pioneering will allow progress to be made in the chemical transition. At the end of the day, this is in everyone’s best interest.
 

Challenge 4: Time and money

The last of these challenges is perhaps a cliché, but it could not be any truer. This whole chemical transition is not an overnight thing. With some 400 companies, 44,000 employees and 50 billion euros’ worth of turnover, the Dutch chemical sector is an important one. The (Dutch) chemical industry is nigh on ubiquitous. It is only set to become more important in future. In short, there are plenty of opportunities. It is thought that 64 billion euros’ worth of investment will be needed for the entire Dutch chemical industry until 2050. Of that 64 billion, 27 billion will be needed to convert companies themselves and 37 billion to convert the energy supply. The chemical sector is willing and able, but it will require support as well as patience and trust from governments. 

TAUW can help industry with these challenges, thereby effecting transformation and creating a future-proof (chemical) industry jointly with you. Keen to find out more? Feel free to get in touch with me or one of my colleagues.

 

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