On the road to a sustainable and green economy, Northern Netherlands industry has much to offer. But the companies cannot do it alone. To explore and protect new solutions and markets, government support is a dire necessity, concluded a roundtable discussion attended by State Secretary Idsinga.
It is Monday, Oct. 14, shortly after one o'clock, when Folkert Idsinga walks into the state-of-the-art conference room of Groningen Seaports. The State Secretary for Taxation and Fiscal Affairs is joining a roundtable discussion this afternoon with northern companies that are concerned with circular plastics and the switch to sustainable energy sources, among other things. What are they up against and what (fiscal) measures could the government take to break through bottlenecks and increase opportunities?
Beforehand, Idsinga was updated by NOM director Dina Boonstra and Wisse Hummel, manager of sales & business development at Groningen Seaports, on the state of affairs in the green chemistry and energy sector in the northern Netherlands and Eemshaven and Delfzijl in particular. Because yes, the region has made great strides over the years in the transition to a sustainable and green economy. Indeed, in the fields of green chemistry, green energy and the recovery of raw materials from waste, the North is even playing a pioneering role, with the Eemshaven-Delfzijl industrial cluster as a crucial link.
Circular plastic charge
Nevertheless, these very companies sometimes find it difficult to fully realize their plans and potential. This becomes clear once again during the roundtable discussion. When it comes to plastic recycling or the development of bioplastics, for example. Not least because new plastic is many times cheaper than recycled plastic. So what are the knobs you can turn as a government? In other words, how can you ensure that the use of new plastic is reduced and the recycling of plastic becomes more attractive? Avantium and Bollegraaf Recycling Solutions were invited to contribute ideas.
"I always cite the United Kingdom as an example then," says Edmund Tenfelde. He is ceo of Bollegraaf Recycling Solutions, a leading global player in turn-key recycling. 'There, a tax of £200 per ton is imposed on plastic products that are not at least 30% recycled. That tax applies to all plastic packaging produced or imported into the United Kingdom. Something similar, with a view to the transition to a circular economy, might also be possible in the Netherlands.'
The secretary of state listened attentively and indicated that the cabinet is currently working on introducing a circular plastic tax. In essence, it involves an obligation to soon replace a minimum percentage of fossil plastics with circular plastics. 'By next spring we should have a worked out proposal for that,' Idsinga emphasizes.
Unprofitable top
The term unprofitable top is regularly dropped. It refers to the initial costs and investments required for sustainable production processes and materials. These costs are often higher than the market price of traditional products, creating a difference that is not immediately profitable. 'Unprofitable top is a tricky issue for us,' said Boudewijn van Schaik, cfo at chemical technology company Avantium. Avantium, which the secretary of state will visit later that afternoon, is building the world's first FDCA plant in Delfzijl to produce bioplastics on a commercial scale.
'The plant that the secretary of state is going to see this afternoon costs a lot of money, but it's not actually profitable,' Van Schaik continued. 'That makes it incredibly difficult to get investors on board. Especially also because we are a listed company. But to develop biobased materials on a large scale, you logically need financial support. Someone has to finance that unprofitable part. The question then is: will it be the government, Europe, will it be the shareholders, or will we do it in combination? We need to think better about that in the Netherlands. Idsinga nods in agreement.
High energy prices
Many activities in Eemshaven and Delfzijl are, to put it mildly, quite energy-intensive. Consequently, high energy prices have significant consequences for the companies. How does that manifest itself at polymer producer Teijin Aramid, part of Japan's Teijin Group, which specializes in the production of high-performance aramid fibers? 'The fiber we make is produced here in the region and the yarn is sold worldwide,' explains site director Nina Huck. 'That's where the bottleneck is right away. Manufacturing costs have exploded in recent years. Simply because high energy prices have caused virtually all our raw materials to rise in price. And yes, that does not help our international competitive position.'
Of course, Teijin Aramid is electrifying whenever possible. After all, the company is committed to meeting the 2050 climate target. But green power, says Huck, is obviously not yet a real solution. Simply because it is even more expensive. 'Then we can't compete with our Chinese competitors at all.'
Just tax fossil fuels, you might say, and in doing so make sustainable alternatives more attractive. That is a bit of a dilemma, says discussion leader Anne-Wil Lucas of the NOM. 'Because we want to prevent existing industry in the region from pricing itself out of the market. After all, electrification is by no means an alternative for everyone. Also because there is increasingly no room on the grid.'
From blue to green hydrogen
Is hydrogen not a possibility then? Isn't the Northern Netherlands profiling itself as the hydrogen region of the Netherlands and Europe? And not unjustly so, as this afternoon has shown. Marieke Abbink, CEO of New Energy Coalition, emphasizes that a preliminary study shows that hydrogen production from Eemshaven not only reduces CO2 emissions, but also offers a new economic perspective for the region to actually grow into the first hydrogen cluster in Europe.
'Nine companies from the IndustrieCluster Oost-Groningen are already making a start on this,' Abbink argues. 'Despite the complex regulations, they have been holding each other for some time to look for opportunities to make the switch to hydrogen. Only: that switch is expected to cost about 100 million euros once. We know it's technically possible, but how to finance it? Because fiscally it is also quite complicated. How do you deal with risks, for example? In other words: in order to get it off the ground, financial support from the government is necessary.'
How do they actually approach this in other countries, Anne-Wil Lucas asks Alexander Jongenburger. Jongenburger is business development manager at Equinor, a Norwegian energy group active in some 30 countries. Among other things, the company is developing three extensive blue hydrogen projects in Europe, including the H2M Eemshaven project.
Jongenburger says the breakthrough of hydrogen in most countries is still in the future. Well, he observes, the British government is trying to start the first projects. 'They have known there for some time now that energy transition is about more than just electrification. But I also notice that the Dutch government is slowly realizing that blue hydrogen projects can be a game changer. That, with perhaps the government as co-owner, you can create something that will also facilitate the development of green hydrogen. In that respect, the H2M Eemshaven project offers the region a great opportunity to make a kick start'.
The Eemshaven method
Shortly before the secretary of state left for Avantium's flagship plant, VNO-NCW MKB Noord director Agnes Mulder, who was also present at the talk, handed him a booklet titled "The Eemshaven Method," which recounts how in Eemshaven, in a period of growing concerns about the security of supply and price of gas, an LNG terminal was realized in a short time. 'It is a method of cooperation that we would like to use more often in the Northern Netherlands,' Mulder clarifies. This method could help us make the transition to a hydrogen economy together. Looking together at what is possible!
Dina Boonstra: "The fact that State Secretary Idsinga invited himself to better understand what is going on in the field of taxation in the region, and entered into direct dialogue with entrepreneurs, is something we as NOM particularly appreciate. It offers a valuable opportunity to jointly explore solutions for the challenges and opportunities of the future."
