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Rotterdam Port spots barriers to industrial CCUS, hydrogen plans

15 October 2021 Cristina Brooks

Firm policies supporting carbon capture and hydrogen are needed for industry in the Netherlands to reduce its GHG emissions, according to a study released by the authorities of two Dutch ports, Moerdijk and Rotterdam.

In the report, The Cluster Energy Strategy (CES) Rotterdam-Moerdijk, the ports and port industry association Deltalinqs analyzed existing and future energy flows as well as what were termed "bottlenecks" to cleantech infrastructure development.

In particular, the report found that carbon capture, storage, and use (CCUS) project Porthos was needed to meet national climate goals. The planned offshore site could store captured CO2 not just in the area, but from all over the country.

Not only this, but five other cleantech projects being developed at the two ports have the potential to slash CO2 emissions by 33 million metric tons annually.

But the projects must secure state support and be built quickly so they can help industry comply with the Dutch National Climate Agreement policy. The policy contains the measures which are meant to help the Netherlands cut GHG emissions nationwide by 49% by 2030 compared with 1990 levels.

Hurdles to the development of the projects include the risk of delay and insufficient state subsidies and financing. "The [City of Rotterdam's] Climate Agreement has calculated that positive government support in infrastructure, in particular, leads to the initiation of a much larger investment agenda for companies," said the authors in the report.

"It underlines that what … industry can do depends to a large extent on government decisions. And what the government and the network operators are doing again depends on industry decisions. As a result, the mutual dependence is high, as was already established in the report of the Taskforce Infrastructure Climate Agreement Industry (TIKI) from April 2020," they added.

Rotterdam Port suggested delaying the projects' construction would hurt the economy of the region, which makes up 6.2% of Dutch GDP.

Pressure on companies and governments to decarbonize the industrial sector is spurring a record level of new commercial CCUS project announcements globally.

Despite more than 50 years of technology development, CCUS remains in its early stages, with cost the most significant barrier to wide-scale deployment, wrote IHS Markit analysts in a recent report on CCUS technology development.

Three greening pipeline projects

One project being developed by Gasunie and the Port of Rotterdam Authority is a future hydrogen pipeline called HyTransPort.RTM.

The pipeline will run between the port of Rotterdam's heavy, petroleum, and chemical industries, its import terminals, and the Dutch city of Pernis. It will be used to move green hydrogen and will be available to all companies that transport hydrogen.

In the future, the HyTransPort.RTM pipeline will be connected to the national and northwestern European hydrogen infrastructure, according to Dutch gas network operator Gasunie.

Gasunie subsidiary Hynetwork Services plans to develop and manage national green hydrogen infrastructure in the Netherlands, largely using converted natural gas pipelines.

A second potential international pipeline corridor, Delta Corridor, will be used to move hydrogen, CO2, LPG, propane, and possibly also direct current and circular raw materials in the Dutch industrial areas of Moerdijk and Chemelot as well as in Germany.

A third pipeline project, Gasunie's WarmtelinQ, will move residual heat from the Port of Rotterdam to households, offices, and greenhouses in the wider province of South Holland. The ports also plan on upgrading electric networks to allow the production of green hydrogen and for electrifying industrial processes.

CCUS, electrification, hydrogen fuel

In addition, the ports reviewed a plan by Shell and ExxonMobil to build the Porthos CCUS project, which has portside and offshore components.

Porthos would be developed in partnership with industrial gas producers, with a communal pipeline transporting liquid CO2 from four new blue hydrogen projects.

They also reviewed a separate project involving Shell and ExxonMobil, H-vision, developing installations to supply blue hydrogen for use as industrial fuel.

The project partners also include BP, Equinor, Gasunie, German energy company Uniper, coal and biomass plant operator ONYX Power, chemicals infrastructure provider Royal Vopak, and port and state companies.

Hurdles to development

The interdependency of parties investing in the projects, for example those that would be linked to the HyTransPort.RTM green hydrogen pipeline, means the projects are particularly exposed to incomplete projects—which in turn are dependent on investment.

In some cases, such as Porthos, its eligibility for state subsidies under the Dutch SDE++ scheme poses a risk to development.

The barriers for the Delta Corridor hydrogen project include not only financing risk but also the need to clarify certification for renewable-energy origin green hydrogen.

More certainty on hydrogen certifications is needed, too. For example, parties need clarity about what hydrogen projects would eligible for subsidies under the EU's proposed revision of the Renewable Energy Directive.

They also need certainty on what type of imported hydrogen would be subsidized under the Dutch government's sustainable energy production and climate transition (SDE++). This is a feed-in-tariff-style subsidy for companies that produce low-carbon electricity, heat, and fuels for example from renewables, biogas, combined heat and power, and advanced fuels.

Barriers to the proposed electricity network expansion at the ports include a lack of demand and sufficient grid capacity to distribute any additional offshore wind beyond the proposed Ijmuiden Ver Beta cable connection that is set to bring offshore wind power to the mainland.

However, the report noted that for local production of green hydrogen to be successful, a minimum of 2 GW of extra offshore wind beyond existing development plans is needed.

The Port of Rotterdam Authority said it is working with TenneT on a grid-related consultation.

Posted 15 October 2021 by Cristina Brooks, Senior Journalist, Climate & Sustainability, IHS Markit

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