Time to drive cross-border action within the energy transition: Key takeaways from the Energy Mission – Benelux Edition 2024

News17-12-2024

The competitiveness of the European industry is under significant pressure as it navigates a very challenging landscape defined by high energy prices, a complex regulatory framework, ambitious sustainability goals, fragmentation of public support and shifting geopolitical dynamics. The Antwerp Declaration was an urgent call to strengthen the business case for industrial investments in Europe. As the current Draghi report states: “We have reached the point where, without action, we will have to either compromise our welfare, our environment, or our freedom. “

Responding to this call for action, on the 21^st of November 2024, EnergyVille, the Benelux Business Roundtable (BBR), the Benelux Union, Flux50, POM Limburg and Thor Park organized the “Energy Mission – Benelux Edition”. It brought together key stakeholders, decision makers and knowledge centers in the Benelux and neighboring regions to discuss the challenges around cross-border industrial value chains and how to remove cross-border obstacles to support the necessary decarbonization of the Benelux industry.

To keep you up to date, this summary highlights the key takeaways from this unique event.

Energy Mission-Benelux Edition - an event unique in its kind

Over 200 registrations from the Benelux and neighbour regions
An impressive line-up of about 20 speakers and panelists representing the complete value chain, with C-level representatives from the chemical and cement industry, energy companies, pipeline network operators, NGO’s, completed with experts from knowledge institutes, innovation clusters and government.
Preliminary results of a cross-border project on energy infrastructures and carbon value chains (Flanders, Netherlands, North Rhine Westphalia), illustrating the result of a unique strategic collaboration between the research centres VITO-EnergyVille (B), TNO (NL) and Dechema (D).
A collaborative presentation by the 3 pipeline network operators of the Benelux, Fluxys, Gasunie and CREOS.
Urgency-driven and action-oriented proposals by different stakeholders/panelists.

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Valuable key takeaways – an overview

URGENCY

The urgency is now. In fact, it should have been an urgency already for some time. Several sectors of our industry are in survival mode and risk disappearing partially or completely. Due to the limited number of decision windows, we need to take the one-shot opportunity to decarbonize.

Industry is willing to invest (e.g. unique sustainable pilot projects with CCS in the cement sector by 2029), but they need decisions and consistent actions on infrastructure now to be operational in time. Many industrial investment decisions are due for 2025. Global operating companies also need a compelling business environment to make them invest in the EU/BeNeLux and not elsewhere on the globe.

SYSTEM APPROACH

The call to action should be based on a clear cross-border path, direction and realistic targets. With this common system view we can start from electrification and use hydrogen where we do not have other solutions. Anyhow, we will need a huge amount of (sustainable) electricity and decide how to integrate this electricity supply into a coherent system, bringing together the demand in energy, materials and feedstock from different industrial sectors. In this context, relocating parts of the value chain should be evaluated as part of the puzzle.

BUSINESS CASE

The current business cases of CCS and especially H₂ are a key challenge. High energy prices (gas, electricity) in our countries compared to other parts of the world need to be tackled. For electricity this means putting all our efforts in the further expansion of cheap renewable energy (e.g. North Sea) and electricity grids. For gas, this requires firm international negotiations on EU level, not only for gas as energy source but also as a feedstock.

For unique pilot projects subsidies are inevitable to bridge the funding gap. In this context technology neutrality should be a basic principle. But above all it is important to show to investors where the money is in the next 10 to 20 years. This means that we start derisking specific value chains together with the involved stakeholders (producers and consumers in a joint business case) and focus on creating functional markets.

To tackle the variability of e.g. energy and CO₂ prices, contracts for difference mechanisms need to be really applied and matched in timing with subsidies.

INFRASTRUCTURE

The required transport infrastructures for both feedstock and energy need to be planned as “steppingstones”, where small markets can be built. The planning of this infrastructure needs to be carefully aligned with industrial investments (of e.g. CCS).

Cross-border priorities will consider the differences between countries, e.g. the availability of underground storage in the Netherlands vs. Belgium and the opportunities of relative low-cost storage opportunities nearby, e.g. UK. Expected government support for building infrastructures is not expected to surpass 50%.

Operationality requires clear cross-border agreements on safety, purity standards and certification. In addition, multi-purpose corridors are to be further explored, also from permitting perspective. From regulatory perspective, the statement “perfect is the enemy of effective” is mentioned as a warning.

INNOVATION STRENGHT

Our knowledge institutes are a unique strength if they can collaborate strategically on a cross-border level, see e.g. VITO-EnergyVille, TNO and Dechema with the 3C-VaCS and complementary projects). The interaction between industry and knowledge centres should be strengthened to:

Detail the fact-based cross-border decision basis for investments and the system perspective
Intensify fundamental research in our regions to further tackle the business cases
Incentivize start-ups with disruptive approaches

GOVERNANCE

Many of the speakers and participants referred to the importance of closer cooperation among the BeNeLux authorities, but also the cooperation between the authorities and the private sector. The need for a sort of cross-border taskforce was raised. A positive development is also that the BeNeLux for its workprogramme of 2025 will include CCS; while it has also a clear focus on Hydrogen. Some of the participants made the comparison with the electricity or telecom networks where the authorities took the lead in order to get these critical infrastructures available for society as these are catalyst for further economic development.

DEMAND SIDE

Customer awareness on the impact of e.g. the chemical building blocks on our society needs to be addressed, e.g. 95% of our products are related to chemical building blocks.

To create a real market, policy makers need to facilitate low carbon products, e.g. urge cities and urban planners to use low carbon/carbon neutral products or introduce green public procurement.

ACTION

Cross-border action is always a preferred way of action, since it links value chains, increases scale effects and strengthens a unique position in the EU and on global scale.

To address the priority actions as discussed during the event, we need to:

Set up a structural cross-border governance to tackle the common system view and the related priority actions including real Benelux mandates
Get the industry actors (not only oil and gas industry) more actively involved in EU technology platforms (on e.g. CCUS) and governmental decision platforms. This can be structured in trilateral sustainability expert groups.
Build specific links between knowledge centres and industry for fact-based decision support and innovation interaction.

After the Energy Mission – Benelux Edition event, the Benelux Business Round Table (BBR) presented its policy declaration, asking for urgent action by all Benelux countries and work closely together with the private sector to unlock the potential of the Benelux region. The manifest was handed over to the new Belgian Ambassador and Special Envoy for Energy Security, Geert Muylle, replacing Minister Lahbib. (https://www.beneluxbusinessroundtable.org/bbr-presents-its-memorandum-on-cross-border-hydrogen-and-ccs-value-chains/)

The event was organized by EnergyVille, Flux50, POM Limburg, Thor Park, the Benelux Business Roundtable and the Benelux General Secretariat.