Decarbonisation Options For The Dutch Polyolefins Industry

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DECARBONISATION OPTIONSFOR THE DUTCH POLYOLEFINSINDUSTRYA. Negri, T. Ligthart02 February 2021Manufacturing Industry Decarbonisation Data Exchange Network

Decarbonisation options for the Dutch Polyolefins industry PBL Netherlands Environmental Assessment Agency; TNOThe Hague, 2020PBL publication number: 4236TNO project no. 060.43373 TNO 2020 P11985Author(s)Aurelio Negri and Tom LigthartAcknowledgementsWe are thankful to Kees Biesheuvel (Dow Petrochemicals) and Bart Eurlings (SABIC Limburg)for providing us with valuable insight and feedback regarding the current PE and PPproduction processes. We are also thankful to many colleagues at TNO and PBL for their helpand support while working on this project.MIDDEN project coordination and responsibilityThe MIDDEN project (Manufacturing Industry Decarbonisation Data Exchange Network) wasinitiated and is also coordinated and funded by PBL and TNO EnergieTransitie. The projectaims to support industry, policymakers, analysts, and the energy sector in their commonefforts to achieve deep decarbonisation. Correspondence regarding the project may beaddressed to:D. van Dam (PBL), [email protected] Gamboa Palacios (TNO), [email protected] coordinationThis publication is a joint publication by PBL and TNO EnergieTransitie and can bedownloaded from: Parts of this publication may be reproduced,providing the source is stated, in the form: Negri, A. & Ligthart, T. (2020), Decarbonisationoptions for the Dutch polyolefins industry. PBL Netherlands Environmental AssessmentAgency and TNO EnergieTransitie, The Hague.PBL Netherlands Environmental Assessment Agency is the national institute for strategicpolicy analysis in the fields of the environment, nature and spatial planning. PBL contributesto improving the quality of political and administrative decision-making by conductingoutlook studies, analyses and evaluations in which an integrated approach is consideredparamount. Policy relevance is the prime concern in all of PBL’s studies. PBL conductssolicited and unsolicited research that is both independent and scientifically sound.TNO EnergieTransitie has a twofold mission: to accelerate the energy transition and tostrengthen the competitive position of the Netherlands. TNO conducts independent andinternationally leading research and we stand for an agenda-setting, initiating, andsupporting role for government, industry and NGOs.This report was offered to review to Dow Benelux, SABIC Limburg, Ducor Petrochemicals.Both SABIC Limburg and Dow Benelux gave comments that have been incorporated into thisreport. PBL and TNO remain responsible for the content. The decarbonisation options andparameters are explicitly not verified by the companies.

ContentsList of abbreviationsSummary45INTRODUCTION1POLYOLEFIN PRODUCTION IN THE NETHERLANDS681. to the Dutch chemical industryDOWSABICDUCOR81011132POLYOLEFINS PRODUCTION PROCESSES2. overviewEthylene and propyleneLow-Density PolyethyleneLinear Low-Density PolyethyleneHigh-Density PolyethylenePolypropyleneRecap of energy demand and carbon emissions3POLYOLEFINS PRODUCTS AND APPLICATION3. overviewLow-Density PolyethyleneLinear Low-Density PolyethyleneHigh-Density PolyethylenePolypropylene4DECARBONISATION OPTIONS FOR POLYOLEFINS4. substitutionFeedstock substitution to bio-based materialsProcess designRecyclingProduct designUse of residual energyCO2 capture, storage, and usage5DISCUSSION AND IX: SIMPLIFIED SCENARIO FOR THE 464A MIDDEN report – PBL – TNO 3

List of abbreviationsBATCAPEXCCSCCUCHPCOCO2EEIEFAEU PEPPPVTRLWGSBest Available TechniqueCapital ExpendituresCarbon Capture and StorageCarbon Capture and UtilizationCombined Heat and PowerCarbon MonoxideCarbon DioxideEnergy Efficiency ImprovementEnergy Flow AnalysisEuropean Union Emission Trading SystemGreenhouse GasesGlobal Warming PotentialHigh-density PolyethyleneIndustrial Heat PumpLow-density PolyethyleneLinear Low-density PolyethyleneMaterial Flow AnalysisMunicipal Solid WasteMethanol-to-OlefinsManufacturing Industry Decarbonisation Data Exchange NetworkDutch Emission Authority (Nederlandse Emissieautoriteit)Nitrogen OxidesOperating echnology Readiness LevelWater-Gas ShiftPBL – TNO 4 – A MIDDEN report

FINDINGSSummaryThe Dutch chemical industry is the fourth largest in Europe and tenth in the world, having aturnover of over 50 billion euros. Characterised by a central position in the European marketand by the presence of highly integrated clusters such as the Port of Rotterdam and theChemelot industrial park in Limburg, The Netherlands hosts some of the biggest producers ofpolyethylene (PE) and polypropylene (PP), the two most common plastic polymersworldwide. Lightweight, cheap, and reliable, these two polyolefins compose about half of theEuropean demand for plastic products, especially for packaging, agriculture, construction,automotive, and household objects.In the Netherlands, the main producers of PE and PP are Dow in Terneuzen (Zeeland), SABICin Geleen (Limburg), and Ducor in Rozenburg (Zuid-Holland), for a total yearly production of2.6 Mt, equal to 4% of the total polyolefins production in Europe. Dow and SABIC areregistered with the European Emissions Trading Systems (EU ETS), while Ducor provides anannual environmental report to the Dutch government. Together, the production of PE andPP by these three companies cause the consumption of 5.2 PJ of primary energy and the(declared) emissions of 233 kt of CO2-eq.The main processes involved in the production of the polyolefins are naphtha cracking forethylene and propylene, high-pressure polymerisation for low-density polyethylene (LDPE),solution polymerisation for linear low-density polyethylene (LLDPE), suspensionpolymerisation for high-density polyethylene (HDPE), and gas phase polymerisation for PP.The electricity, heat, and material consumption of these processes, as well as the emissionsof greenhouse gases (GHG) is obtained from available literature together with data from DowTerneuzen, SABIC Geelen, and Ducor Rozenburg.As the polymerisation processes do not offer much potential for efficiency improvements andenergy demand reduction, the most promising decarbonisation options for the Dutchpolyolefins industry involve system-wide changes and the integration of a bio-based supplychain with a plastic-to-plastic circular economy loop based on innovative recycling techniquesto recover the plastic waste. The deployment of industrial-scale chemical recyclingtechnologies such as solvent-based purification, pyrolysis, and gasification, coupled with theproduction of virgin polymer from sugar-based crops, lignocellulosic materials, and biowaste,is most likely the best decarbonisation strategy for the sector.The economic costs of bio-based PE and PP are currently higher than their fossil-basedcounterparts, and the pyrolysis and gasification of plastic waste are not yet at a commerciallevel, but the transition to a greener plastic industry could be facilitated by governmentalpolicies such as an increased carbon tax for fossil-based processes, the creation of subsidiesfor sustainable technologies, and stricter regulations for the use of plastic products and thedesign of easy-to-recycle packaging. If all the decarbonisation options described in thisreport were to become economically feasible on a large-scale, this would be one of the waysfor the realisation of its national and European carbon emissions reduction goals.A MIDDEN report – PBL – TNO 5

FULL RESULTSIntroductionThis report describes the current situation of the polyethylene (PE) and polypropylene (PP)production in the Netherlands and the options and preconditions for its decarbonisation. Thestudy is part of the MIDDEN project -Manufacturing Industry Decarbonisation Data ExchangeNetwork-, which aims to support industry, policymakers, analysts, and the energy sector intheir common efforts to achieve deep decarbonisation of the Dutch economy (PBL, 2020).The MIDDEN project will update and elaborate further on options in the future, in closeconnection with the industry.Problem definitionIn the last decades, planet Earth and human society have experienced tremendous changes,with the world population growing by 42% (World Bank, 2020), the final consumption ofenergy increasing by 51%, and CO2 emissions rising by 58% (IEA, 2020), in the period from1990 to 2017. This immense growth of human activity has unequivocal impacts on theclimate system, and the observed environmental changes have reached unprecedentedmagnitudes. Anthropogenic greenhouse gases (GHG) emissions led to increasingtemperature of atmosphere and oceans, and the last 30 years have been the warmest of thelast 14 centuries, with most projections forecasting an increase of 2-4 C in 2100 (IPCC,2014). The negative effects of climate change are widespread over all continents and includethe rapid increase of heat waves, floods, droughts, hurricanes, ocean acidification,desertification, the melting of the polar ice caps, and the consequent rise of the sea level(NASA, 2020), which is forecasted to grow between 0.3 and 1.0 meters before the end of thecentury (IPCC, 2014).The worry for the future of mankind has led to the development of environmental policiesand the creation of worldwide treaties like the Kyoto Protocol in 1997 and the ParisAgreement in 2016, when 196 state parties ratified their common determination to reduceGHG emissions and keep the global temperature rise below 2 C (UNFCCC, 2020). Accordingto the EU Climate & Energy framework, in the European Union this effort has been quantifiedwith the target of cutting 40% of GHG emissions by 2030 (European Commission, 2020a),and the new European Green Deal has the goal to make the EU climate neutral by 2050,making energy, buildings, industry and transport sustainable and boosting circular economy(EU Green Deal, 2020). Like many other European countries, The Netherlands has developeda national plan to achieve the targets agreed on in the Paris Agreement, and its“Klimaatakkoord” has the ambition of reducing GHG by 49% in 2030 compared to 1990levels, with the industrial sector alone reducing its emissions by 59% (Klimaatakkoord,2019). Among the other subsectors, manufacturers of plastic monomers and polymers arethus in the need of improving the energy and material efficiency of their productionprocesses and reduce the associated GHG emissions.PBL – TNO 6 – A MIDDEN report

ScopeThe aim of the MIDDEN project is to compile a database of material and energy uses ofindustrial processes at a plant level for the Dutch manufacturing industry. The scope of thisspecific project is the polymerisation of PE and PP in the Netherlands, starting fromrespectively ethylene and propylene as feedstocks. When looking at the decarbonisationoptions, however, the research boundaries will be expanded to cover the end-of-use (i.e.recycling) and feedstock production (e.g. bio-based ethylene) options.The research question to be answered is: “What is the environmental impact of polyethylene(PE) and polypropylene (PP) production in the Netherlands in terms of energy use and GHGemissions, and what is the potential of the available decarbonisation options to reduce theeffect on climate change?”Producers involved in this project are: Dow (Terneuzen, Zeeland) SABIC (Geleen, Limburg) Ducor (Rozenburg, Zuid-Holland).Production processes include: High-density polymerisation with tubular reactor Solution polymerisation with double reactor Slurry polymerisation with loop reactor Gas phase polymerisation.Products include: Low-density Polyethylene (LDPE) Linear Low-density Polyethylene (LLDPE) High-density Polyethylene (HDPE) Polypropylene (PP).The main options for decarbonisation are: Bio-based polyolefins from the fermentation of sugar-based crops Bio-based polyolefins from the gasification of lignocellulosic and biowaste streams Mechanical recycling of the polyolefins Chemical recycling of the polyolefins with solvent-based purification Chemical recycling of the olefin monomers with pyrolysis Chemical recycling of the olefin monomers with gasification.Reading guide Chapter 1 gives a general introduction to the PE and PP manufacturing industry inthe Netherlands, presenting plastics companies, production sites, and registered CO2emission.Chapter 2 describes the PE and PP production process schemes adopted by plasticsproducers in the Netherlands, including the specific energy consumption and specificCO2 emissions.Chapter 3 gives an overview on the relevant products and applications of PE and PP,presenting production volumes, prices, and market shares.Chapter 4 systematically quantifies and evaluates the options for decarbonisation,providing economic and environmental indicators.Chapter 5 is dedicated to the discussion, including a simplified decarbonisationscenario to 2050, and final conclusion.A MIDDEN report – PBL – TNO 7

1 Polyolefin productionin the Netherlands1.1Introduction to the Dutch chemical industryIn the past decades the Dutch chemical industry has evolved, making the Netherlands thefourth largest chemical producer in Europe and tenth worldwide, with a sector turnover of 50billion euros that constitutes 6% of the national GDP (World Bank, 2020) and 13% of theindustrial added value, providing employment to more than 43,000 people distributed amongmore than 800 chemical companies (VNCI, 2018). Compared to other countries, the Dutchindustry is characterised by the presence of highly integrated clusters which result in costefficient exchange of energy and materials, and other competitive benefits (VNCI, 2018). Theindustry is home to a wide variety of sectors, such as the petrochemical, fertilizers, chloralkali, and polyolefins. Crude oil is processed in petroleum refineries to produce platformchemicals (e.g. propane, gasoil and naphtha) which are then converted into plasticmonomers (e.g. ethylene and propylene) and used to manufacture polyolefins such as LDPE,HDPE and PP, but also rubbers, resins, and other chemical products.The geographical position of the Netherlands in the centre of Europe, coupled with the highlydeveloped seaports and pipelines, helped the country to become a central hub for the otherEuropean countries, with yearly imports of oil products exceeding 84,000 ktoe in 2019 andexports over 106,000 ktoe (IEA, 2020). While this industrial activity is beneficial for theDutch employment and national economy, it is also responsible for a massive amount of GHGemissions. In 2018, the manufacture of refined petroleum products resulted in the emissionsof 10 Mton of CO2 (CBS, 2020), and the chemical industry (including the production ofplastics) emitted another 20 Mton, while consuming 295 PJ (IEA, 2020). To put this intoperspective, the chemical and oil subsectors used 12% of the Dutch primary energy demand(IEA, 2020) and emitted 18% of the total emissions (CBS, 2020).1.1.1Production locations of polyolefins in the NetherlandsIn the Netherlands PE and PP are mainly produced by three companies: Dow, SABIC andDucor. While Dow and SABIC are registered under the EU ETS and their emissions arereported by the Dutch Emissions Authority (NEa), Ducor is below the threshold (25 ktCO2eq) for direct emissions and is thus not part of the program (EU ETS, 2015). Ducor, however,declares its emissions to the emission registration department of Dutch government(Emissieregistratie, 2020). The PE and PP production locations of the three companies areshown in Figure 1, while more information about the history, infrastructure, carbonemissions and energy demand of the production sites will be given in the following sectionsof this chapter.PBL – TNO 8 – A MIDDEN report

Figure 1 locations of Dow (Terneuzen, in green), SABIC (Geleen, in blue), andDucor (Rozenburg, in red) in the Netherlands. (Simplemaps, 2020)An overview of the producers, including their production capacity and registered CO2emissions, is presented in Table 1. The value declared to the NEa by Dow and SABIC is thesum of the emissions caused by all the activities carried out in the production sites and arethus not limited to the production of polyethylene and polypropylene. The other activities ofDow and Sabic (including their decarbonisation options) are described in other MIDDENreports (Rodriguez, Van Dril, & Gamboa Palacios, 2021); (Oliveira C. & Schure, 2020). Moreinformation about the existing infrastructures, the energy demand, and the carbon emissionsof these production sites will be given in the specific sections regarding the three companiesinvolved in the project.Table 1 Overview of PE and PP producers in the Netherlands, made with informationfrom different sources (Dow, 2017, 2020b; Ducor, 2020b; Emissieregistratie, 2020;NEa, 2020; SABIC Limburg, oducedProductioncapacity[kt/yr]Number ofemployeesDeclared CO2emissions[t/yr]DowTerneuzen,ZeelandLDPE, LLDPE1,1003,600124,283SABICGeleen,LimburgLDPE, PP2008012,940A MIDDEN report – PBL – TNO 9

1.2DOW1.2.1History of the companyThe Dow Chemical Company (from now on, Dow) is the third largest chemical producer inthe world (C&EN, 2019), with headquarters in the United States of America. Dow wasfounded in 1897 by chemist Herbert Henry Dow and always had the tradition of diversifyingits product line, ranging from agricultural chemicals and plastics resins, to plutonium duringWorld War II and napalm during the Vietnam War. In 2011, Dow divested its globalpolypropylene business to Braskem, the largest petrochemical company in Latin America, inorder to better focus on improving the performance of its polyethylene production (BusinessWire, 2011). In 2017, Dow merged with DuPont, becoming the largest chemical producer inthe world, but two years later the company was reorganised and split into three separatepublicly traded companies focusing on materials science (Dow Inc.), agriculture (Corteva),and specialty products (DuPont) (C&EN, 2019).Dow is present in Europe since 1955 and in The Netherlands since 1964, when it opened itsfirst factory in Terneuzen. The industrial cluster in the province of Zeeland also houses otherchemical companies, like Yara and Arkema, and good transport connections via land andwater (VNCI, 2018). The company expanded in the last decades, and Terneuzen is currentlythe second largest Dow production site in the world (Dow, 2020b), with a yearly turnover ofmore than 2 billion euros (Dow, 2017). For what concerns polyethylene production, the sitehosts a production line for LDPE, built between 1968 and 1975, and three production linesfor LLDPE, built in 1980, 1986 and 2000, as seen in Figure 2 (Internal communication withDow Terneuzen, 2020).Figure 2 Aerial view of Dow chemical plants in the Terneuzen site with thelocations of the LLDPE and LDPE production and the crackers where the Low HydroCarbons (LHC) are produced (Dow, 2020b).PBL – TNO 10 – A MIDDEN report

1.2.2Registered emissions and energy consumptionDow Terneuzen has ten permit numbers registered with the Dutch Emissions Authority (NEa)and the EU ETS. The production sites relative to PE production are shown in Table 2. Thelarge difference between 2017 and 2018 for the production site Dow BKG 07 is the result of amaintenance stop in 2017.Table 2 Registered direct carbon emissions for Dow Terneuzen (NEa, 2020).PermitnumberProductionsiteActivityCO2 emissions[t/yr] in 2017CO2 emissions[t/yr] in 2018NL-200400084dDow BKG 05PE production6,8276,112NL-200400084fDow BKG 07Energy for PE36,19954,314NL-200400084gDow BKG 08Energy for PE61,675

respectively ethylene and propylene as feedstocks. When looking at the decarbonisation options, however, the research boundaries will b e expanded to cover the end-of-use (i.e. recycling) and feedstock production (e.g.