If the extreme gas prices make anything clear, it is that the Dutch chemical industry must go green faster. If more subsidies and funding are not provided quickly, if laws and regulations are not adjusted, and if companies, governments and other parties throughout the chain do not start working together better, the green chemical industry in the Netherlands will not come about.
That was the conclusion of the first annual event of the Green Chemistry New Economy (GCNE) platform in Woerden. Chairman Arnold Stokking joined VNO-NCW president Ingrid Thijssen there, who argued in the FD that the EU should compensate its heavy industry for expensive energy, but on condition of faster sustainability. According to him, this also applies to chemistry. "We have to hurry up with sustainability, because the urgency is high," he states. Even at his home base Chemelot, a third of the plants are now shut down because of high gas prices.
According to Invest-NL CEO Rinke Zonneveld, chemistry is very important for the green transition of the entire industry. "If the chemical industry stops, leaves or falls over then you miss important building blocks for that renewal," he argues.
Alternatives to oil
The platform aims for a circular chemistry with innovative technologies, without fossil fuels and without CO2 emissions by 2050. That means electrification of processes and an alternative to oil and gas as raw materials and fuel. Currently, the chemical industry worldwide produces 450 million tons of plastic per year, 85 percent of which is made from fossil raw materials. By 2050 the demand will have increased to 1 billion tons, but no more crude oil or gas will be used for that. There are only three ways to do that. By using biobased raw materials, by recycling and by using the carbon from CO2 (CCU). "It's not either-or, but and-and. We have to do it all. To get to CO2 neutral, we need hundreds of projects. But if we don't get going now, we will be overtaken," GCNE quartermaster Herman Wories says.
Growth Fund application rejected
Therefore, according to all involved, it is incomprehensible that GCNE's first application to the National Growth Fund, to stimulate the replacement of oil with biobased raw materials from agriculture, was rejected. With that fund, the government is investing a total of 20 billion euros between 2021 and 2025 in projects that will provide long-term economic growth. The platform had applied for 300 million euros for the Agri-Based Chemicals (ABC) project and already had 500 million euros of funding from the chemical sector ready.
New application crucial
GCNE has submitted a modified proposal for the third round of the Growth Fund called Biobased Chemicals (BBC). It looks beyond agricultural products, for example, to wood. Funding from the fund is crucial, otherwise green chemical companies will leave for countries where they do receive subsidies. "The ambition is to establish a new branch of industry for the Netherlands. That will only work if we can really scale it up from relatively small to very, very large," Wories said. In July 2023, the cabinet will make a decision on the matter.
Some money for plastic recycling
Another GCNE project did get honored. The growth fund initially made 124 million euros available for the Sustainable MaterialsNL project. That money will go mainly to pilot and demonstration projects for the use of recycled plastic waste, the second leg of the resource transition. Today, most of the world's plastic is still incinerated or landfilled. It ranges from PET bottles to agricultural film, from packaging materials to polyester in textiles. All of these waste streams can be broken down into plastic pellets or remelted into pyrolysis oil, then made into new plastic.
The demonstration projects are considered from all perspectives. From the technology needed to the quality of the recyclate, from market demand to the laws and regulations that must be adapted to allow waste to be used as a raw material. It also looks at the design of plastics to make them easier to recycle. Meanwhile, a board has been appointed for this growth fund and a director is being sought.
Again, however, speed is an issue. "We are overjoyed that this is running. But the implementation of everything is slow, though. The first growth funds were approved a year before our proposal and they are still not running. So as entrepreneurs, keep putting pressure on politicians and ask for acceleration," argues Professor Sasha Kersten of the University of Twente, one of the authors of the proposal.
Renewi largest supplier?
With the required quantities of recycled plastic, a waste collector and processor like Renewi could become one of the largest raw material suppliers to the Dutch chemical industry in the future. The company wants to increase its recycling rate from the current 65 percent to 75 percent by 2025 to make new raw materials. For example, subsidiary Coolrec extracts plastic pellets from refrigerators, from which Playmobil makes new toys. Chemical recycling into pyrolysis is also being explored with partners, or the use of foam from mattresses for new mattresses by Ikea. A department is also working on making bio-based plastics from organic waste. Yet Renewi still encounters many problems, especially in chain cooperation with other parties. "The waste industry and the petrochemical industry speak two different languages," says Renewi product development manager Kim Meulenbroeks. For example, where the chemical industry evaluates raw material samples in a laboratory, Renewi inspects trucks carrying plastic on a weighbridge. Price agreements are also made over very different periods of time, which could cause problems in the future.
Green start-ups not getting off the ground
The resource transition requires groundbreaking technology. This is often found in green start-ups, so-called game changers, some of which were allowed to tell their story during the annual event. These included Marissa de Boer of SusPhos, which extracts phosphates from wastewater, or Victor Vreeken of Black Bear Carbon, which extracts raw materials for rubber, ink and paint from discarded car tires. Two-thirds of green chemistry start-ups, however, are still in the early stages of life. Their products are not yet ready for the market, according to research by Gritd, which helps start-ups with data analysis. While plastics and raw materials are relatively inexpensive mass-market products, the products of green start-ups are often more expensive than the market price. Only 4 percent may call themselves scale-ups. "So there are almost no start-ups in the Netherlands that can demonstrate that their product is suitable for the market. That's a challenge," says Gritd co-founder Gijs van de Molengraft. This is partly because they spend only 3 percent of their time on market research. Even for start-ups that are already on the market, sales are smaller than expected and projected sales are much higher than realized sales. Therefore, according to him, they should pay more attention to market research.
Money cannot solve everything
Subsidies and funding remain essential to build green chemistry. Not only from the Growth Fund or RFO, but also from a party like Invest-NL. That may invest 1.7 billion. CEO Rinke Zonneveld was therefore popular with several entrepreneurs during the annual event. "The companies sitting here are in our sweet spots. That does not mean that we are going to invest in every individual company tomorrow, but if you talk about the themes of green chemistry and new economy, we are going to invest a large part of our subsidy pot in those," said CEO Rinke Zonneveld. Funding is not the only issue, however. It is also about laws and regulations, standardization and spatial economic policy and so on. "Pumping a lot of money into this sector is only going to solve all the problems to a very limited extent," he says. That's why Invest-NL passes on all signals it gets about problems to ministries.
What else can the government do to accelerate? The Ministry of I&W mainly wants to coordinate and stimulate cooperation in chains of different companies and sectors. The question is whether The Hague can handle the pace of entrepreneurs. "I think the entrepreneur is very fast. I hope they will lead the way and pull us along," said Marieke Spijkerboer, acting director of sustainable environment and circular economy at the Ministry of I&W. The ministry has also set up the Acceleration House, where entrepreneurs can go with questions about circular economy and funding. "But we're not there yet, because circular business models are very complicated. Therefore, together with Invest-NL and a number of banks under the platform of the Dutch Central Bank, we have developed a roadmap until 2030 to see how we do get those business models financed," she says.
Connecting all the lines
The GCNE platform aims to accelerate the sustainable transition by bringing together all the necessary parties to arrive at solutions. From ministries, provinces, regional development agencies and financiers to the chemical companies and startups, knowledge centers such as Brightsite and TNO and the industry associations. "We have to make the chain work. We as GCNE try to connect all the lines," says chairman Stokking.