The Netherlands has a relatively energy-intensive industry sector structure compared to other countries, among others because of the sizable petrochemical sector and the steel industry. The industry’s share of energy consumption to total energy consumption in the Netherlands is 30% (source: CBS). If non-energy consumption is included (application as feedstock, such as petroleum for the production of polymers), the share rises to almost 40% (source: CBS). The chemical sector is responsible for two–thirds of the energy consumption in the Dutch industry (including non-energy consumption). The steel industry is also a major energy user and emitter of CO2. The industry is concentrated in five large clusters: Rotterdam and Moerdijk, Zeeland, Chemelot near Geleen, the Eemshaven area near Delfzijl and the North Sea canal area. The industry’s large share of total energy consumption also means that making the industry more sustainable plays a major role in the energy transition.
The consumption of energy carriers in the industry can be divided into three main applications: heat generation for production processes, electricity, and as raw materials for making products. For example, petroleum products are used as a raw material to produce plastics and natural gas is used for fertilizer production. Energy carriers that are used as raw materials are therefore not converted into heat, transport fuel or electricity. Almost half of the energy consumption in the Dutch industry relates to non-energy applications and is linked to the large chemical sector. Heat consumption accounts for the largest share, with four–fifths of the energy consumption. A fourth application of energy consumption is that of coke for the reduction of iron ore in steel production.
The greenhouse gas (GHG) emissions of large industries, including Dutch industries, fall under the European emissions trading system (EU ETS). Within the EU ETS, large industrial companies receive part of the emission allowances for free. The argument for the free allocation is that competition with companies outside the EU that pay nothing or less for their emissions would be unfair. The amount of free allowances is decreasing with time (source: EC). If the border adjustment tax that the EC proposes (source: Reuters) for products imported into the EU would implemented be the need for free allowances disappears. The share that is provided free of charge is determined by the 10% most efficient companies in the EU. For the remainder, rights have to be bought. If less is emitted than is covered by the free rights, then those rights can be sold. In addition to the EU ETS, a gradually increasing national CO2 tax for the industry has been agreed within the Dutch Climate Agreement (which was adopted in July 2019) to meet the industry sector‘s CO2 reduction target. The national CO2 tax sets the total price including the EU ETS price, and therefore only concerns the difference between the nationally determined price and the EU ETS price. In addition, it was agreed in the Climate Agreement that the broadened subsidy scheme, SDE ++, also includes CO2-reducing measures other than renewable energy generation. Reducing CO2 emissions from industry can be achieved by switching to energy carriers with less CO2 emissions per generated amount of electricity or heat, by applying energy-saving measures, by using renewable energy or by carbon capture and storage (CCS). Alternative fuels with lower emissions are biogas, blue hydrogen (made from natural gas where the CO2 released is stored) and green hydrogen (made using electrolysis and renewable electricity). Energy saving can be achieved through more efficient production processes including reuse of materials and more efficient separation processes using membranes instead of distillation, but also through more reuse of residual heat. For the latter, there are developments in the area of upgrading residual heat to a sufficiently high temperature using industrial heat pumps. The increased use of electricity in combination with an increasing share of renewable electricity will result in lower indirect emissions. CCS can play a role in a transitional phase since it will take time to make production processes more sustainable and emission-free.
In industry, heat is needed at different temperature levels. The temperatures range from less than 100°C to more than 1000° C. There are other options for increasing the sustainability of different temperature levels. Electrification of process heat in the industry using resistance heating or heat pumps is a possibility for making processes that require lower temperatures more sustainable. However, the higher the temperature levels, the more fuels are required. Climate-neutral options for this are biofuels, blue and green hydrogen or other synthetic fuels; in producing synthetic fuels, either non-fossil carbon must be used or all fossil carbon must be reused or stored. Another option for lower temperatures is geothermal energy. The use of fossil fuels is a possibility in a climate–neutral scenario if CCS is applied. The use of hybrid boilers, that is to say, boilers that can run on both fuel and electricity, can play a role in reducing CO2 emissions (if the electricity comes from renewable sources). Hybrid boilers can also contribute to increasing the flexibility of the electricity system by responding to the supply-dependent electricity price (demand response, see also the theme of flexibility).