Market outlook: Bio-cluster adds to Rotterdam appeal

Author: John Baker

2015/02/20

The Port of Rotterdam in the Netherlands has a long history of attracting chemical production into the extensive port area, offering access to raw materials, utilities and logistics as well as close proximity to sea and inland waterways and rail transport. In recent years, it has also built up a sizeable biofuels capability, with over 1.2m tonnes/year of biodiesel, bioethanol and bio-jet fuels production based in the port area.

Now there is a strong emphasis on promoting and developing a bio-based chemicals cluster at the port and an ambition to build on what has already been achieved in this area.

Bas Hennissen, vice president for industry and bulk business at the Port of Rotterdam, says the port authorities are putting more focus on bio-based projects this year and are in discussion with various prospective investors, some already at the detailed evaluation stage.

“We are already large in the renewables sector, with more than 1m tonnes of solid biomass being transshipped through Rotterdam each year for bio-energy,” he points out, and there is ready access to vegetable oils and fats, sugars and grains and cellulosic materials for chemicals production.

To make investment attractive, the port has created Bio Port Rotterdam and established an 80 hectare site on the new Maas-vlakte 2 extension that has been earmarked to house a bio-based cluster for innovative chemical businesses that use renewables as their feedstock.

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Rotterdam already has huge quantities of biomass passing through the port...

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with extensive docking …

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and materials-handling capabilities

This area will utilise Rotterdam’s well-thought-out “Plug & Play” concept, whereby the port and its partners will itself invest in infrastructure and utilities to reduce the cost of setting up production ventures. Moreover, newcomers can focus on their core business from the start. Plots of 2 to 20 hectares are available for client use.

The bio-cluster site is anticipated to include a carbon dioxide cluster, landing jetties and storage facilities for solid biomass, and production facilities for bio-based chemicals and biofuels, using next generation technologies.

Hennissen points out that carbon dioxide is already available in the port area – indeed, there is a large (€500m, 2m tonne/year) carbon capture and storage (CSS) project on the drawing board for the port area.

The Netherlands already has one of the most competitive sugar industries in the world, based on sugar beet. With EU tariff barriers on sugar being removed in 2017, there should be much more sugar available for chemical conversion in coming years.

The new bio-based cluster makes a very attractive location for new industrial plants, says Hennissen. “Our business case shows that this set-up can lead up to 30 or 40% lower initial investment costs compared to locations further inland. Furthermore, new ventures can benefit from the existing bio-based cluster and the (petro)chemical complex which exists of five refineries and over 40 chemical companies.”

This cluster, he adds, provides a potential market for drop-in bio-based chemicals and fuels. An extensive pipeline network enables fast and efficient transport of products and residues to customers.

PLENTIFUL BIO-BASED OPERATIONS

Bio-based operations already established in the port area include four palm oil refineries and five biofuels plants. These are run by Wilmar (natural alcohols), ADM (meals, unrefined oils), Cargill (edible oils), IOI/Loders Croklaan (edible oils), BioPetrol (biodiesel/glycerine), Abengoa (bioethanol) and Neste Oil (biodiesel).

Bas Hennissen

“We see a lot of bio-plastics companies... who are looking to establish themselves in Europe”

Bas Hennissen
Vice president, industry and bulk business, Port of Rotterdam

On the bio-based chemical front, Hennissen says he is “pretty confident” something will happen next year. “We see a lot of bio-plastics companies with facilities in Brazil and Thailand who are looking to establish themselves in Europe, and we are trying to attract them to invest here.”

The port has a large funnel of opportunities, he adds, “and we expect some decisions soon.” He identifies two potential types of investor – technology companies looking for co-investors to bring a process or product to market, and companies who are already active and are looking to set up larger facilities or a second plant. “The choice for the latter is whether to go closer to the market or stay next to the existing plant,” he adds.

Literature from the Port of Rotterdam suggests Indorama and Hexion are both considering bio-based chemicals production in the port – to make bio-MEG and -PX, and bio-epichlorohydrin, respectively. Indorama currently operates PTA and PET plants at Rotterdam and Hexion has resins and versatic acid production.

The port has plans to attract the development of a large-scale biorefinery in the port – capable of processing various biomass materials (wood, straw and waste) into a range of bio-based chemical intermediates and products.

This would need multiple partners to realise, says Hennissen, but he believes the port has the input material streams and downstream connections to make a viable value chain leading to plastics and chemicals.

It is, he adds, a question of scale. To make chemicals production attractive you need large-scale plants, he explains. “As a port we can only compete with other producers if we have scale – there is no point in producing at small scale close to the crops.”