Strong Policy Needed to Decarbonize the Industrial Cluster in Europe’s Largest Port
With the increasing global urgency to combat climate change, the Port of Rotterdam must successfully decarbonize its port and industrial cluster operations while continuing to thrive in a competitive market. As part of this effort, the H-vision Project plans to curb carbon emissions by producing and adopting blue hydrogen as a decarbonization enabler.
The City of Rotterdam has created a roadmap to reduce 49% of its carbon emissions compared to 2017 levels before 2030. Because the Port of Rotterdam is responsible for 13.5% of total national emissions, the H-vision Project is crucial for abating industrial emissions in the Netherlands. Furthermore, it offers a model of how to future-proof industrial operations by adopting blue hydrogen this decade while building the foundations for future green hydrogen integration. By 2030, the Port of Rotterdam expects to have at least 2 GW of electrolysers capacity for green hydrogen production. Green hydrogen is produced from renewable electricity, adding to the urgent need to decarbonize the national power supply. By adopting blue hydrogen, the decarbonization process can commence without delays caused by the lack of immediately available green hydrogen.
The H-vision project aims to:
- Capture and store CO2 emissions generated during the hydrogen production process;
- Reduce 2.7 MtCO2 emissions of the industrial sector in Rotterdam by 2030 by adopting blue hydrogen as fuel;
- Meet the reference study maximum power sector and industry hydrogen demand of 3200 MW which is translated into 700 kt/year of blue hydrogen;
- Construct two new hydrogen production trains to satisfy the power demand indicated above; and
- Develop the necessary infrastructure for the green hydrogen economy of the future.
About The Port of Rotterdam
The City of Rotterdam in the Netherlands is home to Europe’s largest port in addition to a thriving industrial cluster. More than 180,000 direct and indirect employees work every day in Europe’s largest seaport. Rotterdam means trade, industry, waters that never rest, and it is a significant employment source in the Netherlands. Nevertheless, intensive industrial activities are associated with large greenhouse gas emissions, and the Port of Rotterdam is no exception. In 2020, it released a total of 22.4 million tons of CO2 into the atmosphere.
In April, the European Union agreed to a greenhouse gas emissions reduction target of 55% by 2030 compared to 1990 levels. This ambition requires a prompt response from the industry and policymakers in order to meet the target while ensuring that the European Union remains a modern, resource-efficient and competitive economy, as stated in the European Green Deal. Similarly, the carbon reduction and energy transition goals of the Port of Rotterdam require a realistic and actionable¹ plan that includes adopting technologies to decarbonize diverse industrial activities and consider the efficient use of the existing infrastructure and carbon storage opportunities in the region.
The Industrial Decarbonization Challenges
The industrial sector faces several decarbonization challenges. First of all, industrial installations must rely on a reliable and uninterrupted energy source that cannot be provided, at least in the short term, by the intermittency of renewable energy generation. Second, electrification alone is not able to deliver the high energy requirements of fired process heaters and boilers in the chemical process industry. Finally, residual gases generated from some industrial activities are currently used – in combination with natural gas – as fuel in fired heaters, resulting in undesirable greenhouse gas emissions.
The industrial sector must aim for decarbonization solutions that harness residual gases’ calorific value and adopt zero-carbon fuels for processes where electrification is not feasible or not yet commercially available.
The Port of Rotterdam has significantly reduced emissions in the period 2016-2020, as shown in the figure below. However, industrial emissions remain hard to abate.
About the H-vision Project
H-vision aims to significantly reduce the industrial emissions from the Port of Rotterdam by producing blue hydrogen from residual and natural gases. The carbon emissions from the blue hydrogen production process will be captured and permanently stored in depleted gas fields, deep in rocks below the North Sea. From a technical standpoint, there are no roadblocks, and the infrastructure needed for blue hydrogen can be used for green hydrogen when it becomes available for the industrial sector. At the moment, there isn’t a surplus of renewable energy in the Netherlands – only 15% of the electricity mix consists of renewable electricity. But it’s vital to create infrastructure now that will remain relevant in our net-zero future.
H-vision will allow the development of a hydrogen economy in Rotterdam, supporting the energy transition required to address current emissions. The expected large volumes of blue hydrogen production and deployment in Rotterdam’s industrial sector will significantly contribute to the development of Europe’s largest port as a hydrogen hub supporting the production, consumption, and trading of hydrogen. This will align with other decarbonization developments planned in the maritime sector, which is at the heart and centre of Rotterdam’s operations. According to the Energy Technology Perspectives 2020 report from IEA, ammonia, hydrogen, and other fuels will meet more than 80% of bunkering fuel needs in 2070, with ammonia as the primary bunkering fuel pool component.
Moving Forward: Strong Policy Support Required
The following EU Policies and funding mechanisms should play a supporting role in ensuring projects like H-Vision can move forward:
- The Innovation Fund;
- Trans-European Energy Infrastructure (TEN-E);
- Trans-European Transport Network (TEN-T)
- Horizon Europe; and
- National recovery and resilience plans.
CATF has commented about the importance of including CO2 storage and diverse modalities of CO2 transportation, as well as hydrogen infrastructure in the scope of the TEN-E framework.
In Brussels, steps have been taken to recognize the importance of carbon capture and storage to achieve the 55% reduction target by 2030. However, despite the urgent action required to abate carbon emissions, concrete proposals such as H-vision are hindered due to a lack of supporting policies and attendant investment risks around carbon pricing.
What’s needed is a supportive EU policy framework that encompasses a wide variety of issues – from low-carbon hydrogen manufacturing to transport and use in industrial installations, to carbon capture and storage and funding mechanisms and risk sharing by private and public financing. Policies that tackle all of these interconnected issues are required to materialize H-vision and, ultimately, achieve the EU’s climate ambitions.
Climate actors across Europe ought to follow projects like H-vision closely. It provides a model for industrial decarbonization in the short term due to its strong focus on attainable short-term carbon emissions reductions. It also supports the development of a blue hydrogen infrastructure for future green hydrogen adoption while making advances towards Europe’s net-zero target this decade. Beyond its direct achievements in reducing emissions, there will be a huge amount that H-vision can teach other industrial clusters around the continent. As industrial decarbonization is one of the great climate challenges facing the EU, businesses, industries and member states need to replicate H-vision’s successes almost as soon as they’re achieved.