Energietransitie vergt industriële transformatie

Energy transition requires industrial transformation

Industry is responsible for a third of Dutch CO2 emissions. Making energy-intensive business processes more sustainable is therefore an obvious choice. This energy transition has been in the works since 2015 in the VoltaChem Shared Innovation Programme on Power-2-X.1 The more comprehensive Industrial Transformation programme of TNO has also recently been launched. According to Martijn de Graaff, who leads both programmes, a fundamental question is still on the table. “Which industry do we want to retain in the Netherlands because it contributes to the national earning capacity and/or is of strategic importance?”

At the end of 2015, the well-known climate goals were set in Paris to limit global warming to one and a half degrees. By 2050, global emissions of the greenhouse gas CO2 must have been reduced to net zero. Earlier that year, the VoltaChem Shared Innovation Programme on Power-2-X had already been launched in the Netherlands. VoltaChem is fully committed to the use of renewable energy in the chemical industry and is thus contributing to the Paris goals. The programme provides insight and analysis to support companies in making choices. For example, should they use biomass or hydrogen as fuel for their production process?

Technology development

VoltaChem is also involved in technology development for the production of hydrogen as an energy carrier and of valuable chemical substances, such as synthetic fuels and specialty chemicals. “The program extends to the multi-container scale, after which companies themselves must further scale up the technology and put it into practice. We can still play a supporting role in this.” Examples include the conversion of CO2 into dimethyl ether, a potential LPG replacement, or formic acid, as an intermediate product for high-quality chemical substances. A new electrolysis technology is also being developed for the production of hydrogen.

“The program goes up to the multi-container scale, after which companies must scale up further”

Apart from this programme, companies, sometimes supported by TNO, are working on electrifying their production processes, including industrial heat pumps and electric boilers. Examples include an electric naphtha cracker and an electrified version of the 'steam methane reforming' process, which uses carbon monoxide as a raw material and supplies hydrogen as a fuel. "Where VoltaChem is aiming for the long term, for complete CO2 neutrality, these are more short-term projects. Conventionally, both the food and energy sections of these processes are fossil. So it is already a good step for now if you can electrify the energy section (for the use of renewable energy from, for example, wind or sun, ed.)." The question is, however, until when the industry can be satisfied with making the current infrastructure, in which so much has already been invested, sustainable, says De Graaff. "When do you really have to do something different, for example store the released CO2 underground or use it usefully? Each company chooses its own path in this."

Industrial policy

In addition to the question of how companies can produce more efficiently and with less CO2 emissions, there is the more fundamental question of what they should (continue to) produce in the Netherlands. In order to make well-considered choices, a system perspective is needed on the necessary broader industrial transformation, according to De Graaff. In addition to a CO2-neutral energy supply, this also includes the circularity of raw materials. “These are two sides of the same coin in the long term. You need energy to make raw materials circular and you need raw materials to produce renewable energy; think of the manufacture of wind turbines and solar cells.”

“In the Netherlands we need to focus on adding value even more than before”

Companies also consider the entire system when making investment decisions. “Legislation and regulations are changing and the Paris targets are becoming increasingly stringent. Ultimately, they look at where they can best locate themselves. Is that close to customers in North-West Europe or precisely where energy and raw materials are cheap? The expectation is that energy-intensive products will increasingly be produced in the Middle East, South America and Southeast Asia. Because the cheap energy we had here – first coal from the mines and later gas from Groningen and oil from the North Sea – is no longer there. Even though we now get a lot of wind energy from the North Sea, we will import more energy. That is why we must focus on added value here even more than before. However, we must retain a part of the strategic production of energy-intensive products such as fuels here, otherwise we will become a plaything of geostrategic policy. That strategic production will always be more expensive than elsewhere and we all pay for that. But we can no longer do everything here, so the question is what we consider strategically important to continue producing energy-intensively here.

These are all system elements that you need to understand in order to make good decisions. All companies that invest look worldwide to see where the policy is stable, where the market is for sales, where they get good incentives (subsidies, tax breaks, ed.) and where the energy is cheap.”

FutureCarbonNL

Speaking of policy, De Graaff is involved in the FutureCarbonNL programme that is being submitted as a proposal to the National Growth Fund. The aim is to convert CO2 – from factory chimneys or captured directly from the air – into useful products, both fuels and materials. “There are enormous opportunities to create new earning capacity for our country. Large numbers of spin-offs, start-ups, SMEs and also large companies are already working on this.” De Graaff mentions Synkero, which produces synthetic aircraft fuel, and Carbyon, which wants to capture CO2 from the air. “They can build pilot plants and demonstration factories in the Netherlands, but ultimately the scale has to be a thousand times larger or even more. Real billion-dollar factories may be built by Dutch companies in the Middle East, where there is cheap energy. In this way, our country will move towards higher-quality production and delivery of technology for the high-tech factories of the future.” This vision is being explicitly included in the programme at the request of the Growth Fund assessment committee.

“What is our industry of the future?”

“Our original proposal was far too broad. It included all sectors and all technologies. That meant we were at the wrong address; they were not a climate fund but a growth fund.” After all, in the Netherlands, money can only be made by building factories for a production process that sets our country apart and for which a relatively high energy price is not an objection, or by supplying technology for factories that are built elsewhere. “That is exactly the discussion that we need to have much more of. What are we doing here, which specific part of the value chain do we keep in the Netherlands? In short, what is our industry of the future?”

Opportunities for existing SMEs

The discussion often focuses on the well-known big players and emerging companies with innovative technologies. But what about the existing SMEs in energy-intensive sectors? Due to their low CO2 emissions, compared to those of the big players, little attention has been paid to this until now, De Graaff acknowledges. “TNO is going to organize a webinar to also give them insight into the future. In addition to companies that emit CO2, we are targeting technology companies that can provide solutions for this. As the Netherlands, we have a lot of experience with building energy-intensive factories because we had that cheap energy. We can reuse that knowledge for building the new, sustainable factories.” Finally, there are also SME production companies that can benefit from the strategic choices of, for example, refineries to produce less fuel and more valuable raw materials. “These are the specialty players of the future, an interesting category for risk investors.” However, even those small players are faced with uncertainty. “Because the dot on the horizon is clear, but what the specific route is and which technology will make it, we simply do not know yet,” De Graaff concludes. It underlines his plea for a clear and consistent policy for the energy transition and industrial transformation.

Accelerate transition

Martijn de Graaff studied physics in Delft and has since worked at TNO in various business-oriented roles in life sciences and chemistry. He is now program director of the VoltaChem Shared Innovation Programme on Power-2-X. VoltaChem was launched in 2015 at the initiative of TNO, the chemical industry and the top sector Chemistry. The aim is to develop new electrification technologies and business models for the use of renewable energy in the production of heat, hydrogen and valuable chemicals. De Graaff is also leading TNO's Industrial Transformation program, which started in 2022. This focuses on the transformation to a CO2-emission-free and circular industry in 2050. "My goal is to connect people across disciplines and organizations, using the latest innovations, technologies and business insights, to accelerate the transition to a CO2-neutral society."