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REVIEW 2013 Industrieel Management Magazine

Kringen

• NATURAL FACTORS IN ENGINEERING • FUTURE PROSPECTS FOR THE DUTCH CHEMICAL SECTOR • • RESIDUAL HEAT DISPLACES INDIVIDUAL GAS BOILER • ASSET MANAGEMENT AS A CULTURAL PHENOMENON • • NEW TECHNOLOGIES STRENGTHEN DOMINANT ROLE OF OIL • CITY DOES NOT BENEFIT ENOUGH FROM PORT• • PLANS IN ROTTERDAM TO DEVELOP BIOMASS HUB • CHEMICAL SECTOR FACING CHALLENGING YEARS • • PLAN TO UPGRADE EUROPEAN PORTS • IMPROVING THE SAFETY CULTURE IN REFINERIES • • BIOMASS SOURCES PUT ON THE MAP • www.europoortkringen.nl


10MOB06 europoort kringen engels.indd 1

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Preface Jiri Hartog

Cover photo: Danny Cornelissen

Kringen

www.europoortkringen.nl Publisher Uitgeverij Lakerveld bv Harrie Jabroer J.C. van Markenlaan 3 • 2285 VL Rijswijk (Zh) P.O. Box 160 • 2290 AD Wateringen Telephone +31 (0) 70 336 46 00 Telefax +31 (0) 70 336 46 01 E-mail info@europoortproducties.nl

Editorial Team Jiri Hartog (editor-in-chief) Astrid Hardenbol (copy-editor) Laurent Chevalier (editor) Constant Gras (editor) Jaap Luikenaar (columnist) E-mail redactie@europoortkringen.nl Translation: Vertaalbureau Bothof bv Subscriptions E-mail irene.semp@lakerveld.nl Production management Barry Stok, telephone +31 (0) 70 336 46 78 Advertisement Uitgeverij Lakerveld bv Remco Rooij, telephone +31 (0) 70 336 46 80 Mobile +31 (0)6 53 22 08 22 Design Vincent Bergman Uitgeverij Lakerveld bv Management magazine Europoort Kringen is a platform for discussion and opinion. The responsibility for supplied communication lies with the sender. No part of this publication may be reproduced in any way without permission from the author. Mission Statement Europoort Kringen is a management magazine for business, knowledge institutes, universities and governments. The magazine informs about current developments in intersection of new technology, innovative projects and regulation and translates that into practice. Europoort Kringen is a platform for discussion and opinion. Our motto ‘Changes in one, have implications for others’ symbolisez our integrated approach to issues in (petro) chemical, transport and infrastructure, environment, health and safety and maintenance.

Size ‘Some animals are more equal than others’, George Orwell wrote many years ago in his book ‘Animal Farm’. I am not suggesting that animals are synonymous with ports, but there are certainly similarities between the two. As with animals, ports vary in size and characteristics. This year Rotterdam, for instance, opened Maasvlakte 2, a brand new industry and harbour development area part reclaimed from the sea. With this extra capacity, the port of Rotterdam feels it is ready for the future. It can handle an increasing amount of containers that are shipped to the port in even larger freight-carrying vessels. Like Rotterdam, the ports of Antwerp, Hamburg and Bremen are also preparing in anticipation for the increase in freight shipping. It seems obvious that a port accommodates market requirements and it is integrated in an environment that justifies its existence. However, the European Commission thinks differently. According to plans presented earlier this year, the EC implies it wants to restore the ‘imbalance’ between the 300 biggest ports in Europe. The EC suggests that the gap between the best and worst performing ports should be reduced. Their thinking is, when the smaller ports improve themselves, there will be a reduced chance of congestion to the hinterland, thus leading to savings of approximately ten billion Euros. The logistics element will of course be vitally important in the coming years. There is no doubt that the growing amount of incoming containers must be transferred smoothly through the hinterland. Rotterdam is already making preparations for the coming years, because of its importance as a port and to accommodate their current customers and the new, growing market. Like the animals in Orwell’s Animal Farm, all ports are different. They should be given the space to develop themselves and respond to market needs. My advice to the EC would be to leave it alone and let the market evolve.

Jiri Hartog editor-in-chief Jiri.hartog@lakerveld.nl

ISSN: 1568 - 881X

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CONTENTS REVIEW 2013 NATURAL FACTORS IN ENGINEERING

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FUTURE PROSPECTS FOR THE DUTCH CHEMICAL SECTOR GREENING, RECYCLING, MORE SUSTAINABILITY

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PREFACE

FIFTEEN PARTIES SIGN UP FOR JOINT APPROACH TO HEAT SUPPLY RESIDUAL HEAT DISPLACES INDIVIDUAL GAS BOILER ASSET MANAGEMENT AS A CULTURAL PHENOMENON DOUBLING OF CHEMICAL INDUSTRY ENERGY DEMAND BY 2040 NEW TECHNOLOGIES STRENGTHEN DOMINANT ROLE OF OIL

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CITY DOES NOT BENEFIT ENOUGH FROM PORT

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PLANS IN ROTTERDAM TO DEVELOP BIOMASS HUB THE HARMONISATION OF SUSTAINABILITY CRITERIA IS DESIRABLE

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‘IN 2042 ROTTERDAM WILL BE A BUSTLING METROPOLIS WHERE CLEAN PRODUCTION AND HEALTHY LIVING GO HAND IN HAND’

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CHEMICAL SECTOR FACING CHALLENGING YEARS COMPETITIVENESS UNDER SERIOUS PRESSURE COLUMN JAAP LUIKENAAR ‘MAINPORT’ EUROPE?

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PORT OF ROTTERDAM AUTHORITY CRITICAL ABOUT PLAN TO UPGRADE EUROPEAN PORTS ‘YOU SHOULD NOT WANT TO CHANGE THAT’

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IMPROVING THE SAFETY CULTURE IN REFINERIES LOCATION MANAGER MUST SET A GOOD EXAMPLE BIOMASS SOURCES PUT ON THE MAP

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Natural Factors in Engineering Il Faut Cultiver Son Jardin - Voltaire BY TIES RIJCKEN

As a student and as an engineer I have wrestled a lot with the disruption of nature by technological developments. I have always followed the sustainability movement closely and have been part of it from time to time. But it never occurred to me that I would find what I was looking for in photography.

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igital visual material, in particular, supports me in the discovery of my fascinations and in understanding and appreciating my surroundings. I always have my photographs with me thanks to my laptop and a couple of extra hard disk drives. I look at, select and show them regularly, and I get insights and see connections in the most unexpected places. In 2005 I took a picture of a Chinese man running along the beach in Singapore. He stopped for a short while on a pier made from cement and stone. An aeroplane flew over him, and in the distance there were ships waiting within view of the port. I looked at the photograph a couple of months later. You associate a beach with nature, but on this image everything natural had disappeared, except for the man’s bare torso. Like the Netherlands, Singapore has been designed to an extreme degree and flooded with technology. This can be overwhelming and surprising. I then opened a new folder on my laptop entitled ‘people and technology’. In it I put shots of homogeneous high rise in Hong Kong, Singapore and Manila. Of the megalomaniac concrete of the Hoover Dam and the Three Gorges in China. Preferably with anxious looking

people in the foreground, or figures that are so small they almost disappear. In search of the human dimension in our creations, I had the feeling that extreme egos were behind extremely large scale creations. We deceive ourselves by thinking that we love it, but we do not realise that we actually want to deny our insignificance in the universe and even want to fight against death. Although I, as a passer-by and - let us not forget - a photographer spent time in metropolises, I could not imagine that people really can and want to live there. In my ‘photography\themes’ folder I had opened another folder called ‘Christopher Alexander’. The work of this architect and philosopher was recommended to me at about the same time by John Edmark, a design lecturer at Stanford University, and Peter Lloyd, my final degree project supervisor at Delft University of Technology. Alexander searches for elements and patterns in the surroundings that make us feel at ease, that make us relax and feel comfortable with others, and that occur in all eras and cultures. He is looking for what he calls the quality-without-a-name. In his book A Pattern Language he shows how builders, who according to him are often not architects or engineers, can get a grip on

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this quality. I saw more and more elements around me that, as far as I was concerned, had the Christopher Alexander feeling. They were buildings or locations that felt rustic, charming, warm or quite simply welcoming. I had to stand up to the disapproval of trendy designers and lecturers who taught me about modernism and postmodernism – most established designers prohibit the word ‘welcoming’.

pictures. Most passers-by and users will barely experience this aesthetic event because they see the whole and not just the cut-out. The photographs of the quality-withouta-name, on the other hand, are less about abstraction and more about the emotional association, the feeling of the place. That is difficult to record in an image. I take an impressive picture in a metropolis or of an attractive cutout of modern architecture more often and more easily.

Even so, the ‘people and technology’ folder grew faster than the ‘Christopher Alexander’ one. I still feel attracted to impressive creations - primarily as a photographer - in civil engineering, modern architecture and also consumer products (although from a photographic point of view it is more difficult to discover interesting compositions among them). Yet by taking photographs I deceive myself and others who see the pictures. I make a sophisticated cutout and take photographs in the correct light so I can abstract forms, lines and colours, and an interesting composition is created. There are hardly any recognisable buildings any more in my finest modern architecture

Not so long ago I made the acquaintance of the Japanese term Wabi. I cannot remember when, but in any event it played an important part in the book The Architecture of Happiness by Alain de Botton. Wabi, or Wabi-Sabi, is also difficult to express in words. It is to be found in tiled paths covered in moss, old furniture that is worn but is still being used, in sagging sheds and buildings overgrown with ivy. In his attempt to describe the quality-without-aname, Christopher Alexander ends a chapter with ‘... it’s a slightly bitter quality.’ Here he is referring to transience, decay and the realisation that everything that we human beings build and produce will perish one day. I saw that

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Alexander’s approach to architecture, which arose from sociological research, coincides with the centuries-old Japanese Wabi, and I changed the name of my existing folder to ‘Wabi’. Once you know what Wabi is, you suddenly see it everywhere and the folder therefore filled up more quickly. I think that many engineers resist Wabi (in any event in their professional life). This can be the result of pride, perhaps laziness, but I think primarily impotence. In the design world you occasionally hear the joke that the end product or building ‘looks almost as good as the rendering’ (or the drawings). Problems are simplified and isolated in the conceptual space, and also in the case of prototypes it is, by definition, not certain how the designed item responds to the ravages of time. According to me it is difficult to anticipate this, but I get the feeling that it is important to investigate it because it is about the harmony between people and nature, and therefore ultimately about happiness. When Delft University of Technology asked me to write an essay for the anniversary book about sustainability, I decided that it would be about Wabi. I began by classifying in categories. This is a goal for many scientists, but I see it as a tool. A Nobel laureate once said, ‘There are two sorts of science. One is physics, the other is collecting stamps.’ I would say that you can describe processes and relationships on the one hand and you can categorise on the other. Categories give you an overview, but the relationships run straight across the categories. I soon had all sorts of folders - people use technology to observe nature. Technology provides people with a way

through nature. Nature holds sway over technology (think of ruins or a natural disaster for instance). People put nature in a cage, and so on. A nice way to capture the images in me, but it gives no answer to the question of how nature relates to technology in such a way that an attractive result is created – visual in the first instance but ultimately emotional or even spiritual. It occurred to me that it is actually about the relationship between control by people versus letting go of control (and so primarily at the level of how it appears to us). Let us assume that technology seeks to have complete control over a natural process in order to satisfy a human desire, and that there is nature if human influence is completely absent. If something happens to a product or a structure that was not foreseen, it is the influence of nature. This influence can produce attractive results, but by no means always. It is an excellent approach to leave the aesthetic principle of ‘a great deal of change in the detail without detracting from the harmony of the whole’ to nature. This is one of the reasons why we like looking at a fire so much and why a field of flowers fascinates us for so long. Putting in the detail is a lot of work, and natural forces do this for us with the passage of time at no expense. That is why we like having plants at home and irregular roof tiles. But if nature intervenes such that the desired human need is no longer fulfilled, this aesthetic pleasure we experience is significantly reduced. The erosive effects of sea breezes produces breathtaking detail in Venice, visual depth and a unique identity, but as soon as a window no longer closes properly or the foundations start to rot, we would prefer somewhat less natural influence. Also in a country like Cuba, erosion, decay and wear are present to

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REVIEW 2013 an overpowering extent. It is a fairy tale for the tourists, but a tragedy for the inhabitants. The decay has not been caused by deliberately letting nature take its course, but by the resigned absence of maintenance or by brutal and rash demolition. The skill is in having control over letting go. While searching for more relationships within the Wabi spectrum, it seems clear to me that the more prosperous and densely packed the population in an area is, the greater the control of nature by humans. Every square metre of the Netherlands has been discussed by politicians and interested parties and shaped by designers countless times. Nature is no longer to be found on all scales together, but only at the level of the plant, a fungus or on the contrary at a high level (we have fixed the position of the rivers, for instance, but we have never moved them in their entirety). The countryside of Southern Europe is so picturesque because there is so much Wabi. This can be the result of a certain resignation by the population, or quite simply the lower gross national product per square metre, so there is less money and manpower available for new construction and maintenance. What happens at the opposite ends of the spectrum? In the Netherlands there appears to be an environmental organisation that buys up areas and lets nature take its course in them. The result of the absence of management

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is primarily huge amounts of stinging nettles. There are also parts of the country where human control has reached great heights, and in so doing they have acquired unique beauty. For example, I like to take foreign friends on a tour through Europoort (the Rotterdam port and industrial area) at night. Our perception of the relationship between nature and technology depends on the function of the technology and our expectation. I can continue on this theme for quite a while, and the more I look at my photographs, the more I discover. An area where seagulls breed on the Maasvlakte shows that it is apparently possible to have a vital event in nature taking place right next to a huge hub in the flow of human goods, and that this can even produce an attractive whole. Bales of straw wrapped in black plastic in a corn field add frivolity and depth to a rural field landscape. A bridge with a bend connects two Swiss slopes, and the curvature shows respect for and submission to the geology. So Wabi is not the only way to achieve harmony between technology and nature. (Incidentally, I call it Natural Factors in Engineering, following Human Factors, or ergonomics, by now a respected discipline in the service of technology.) Established philosophers, movements and disciplines have been working on this for centuries.


Sustainability, the theme of the anniversary celebrations at Delft University of Technology, focuses on environmental issues, but not so much from the point of view of aesthetics or the perception of wellbeing. In my opinion the way in which sustainability is used in the scientific world is an extension of the existing approaches; the problem and solution field is being broadened (new technologies and materials) and deepened (a horizon that is further in the future), and this makes the design challenge - in particular - hugely more complicated. Technology development has the upper hand.

as possible on the basis of the prevailing soil structure and he respects natural elements like trees, elevations, springs or streams. He anticipates the weather that can be expected. He concentrates mainly on unhealthy or unattractive parts, and in so doing he works from overview to detail. If he cannot exert any influence, or if that is not necessary, he stands back â&#x20AC;&#x201C; this is a question of personal taste. He tries to extend his influence, but not until he has put his immediate vicinity in order. This is the case occasionally, but sometimes not.  << I can spend hours taking photographs in a lovely garden.

Ecology is concerned with natural ecosystems and the impact of people on them. Engineers who care about ecology, or ecologists who are concerned about engineers, tend to consider technology as destructive and strive for minimal damage by humans. I believe that landscape architects and gardeners, in particular, have already given a lot of thought to Natural Factors. A gardener probably knows better than anyone else when he can let nature take its course and when he has to intervene. I can imagine that a good gardener calmly examines the state of the area before he starts work. He respects the natural underlying structure for what it is. He works as much

Ties Rijcken: Natural Factors in Engineering, Delft University of Technology

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REVIEW 2013

FUTURE PROSPECTS OF THE DUTCH CHEMICAL SECTOR

GREENING, RECYCLING, MORE SUSTAINABILITY BY JIRI HARTOG

The chemical sector in the Netherlands, and also in North-west Europe, is facing major challenges. Greening is the motto, and there must be a focus on far-reaching recycling and chain integration if we want to survive the competition with the Middle East and China in the future. According to Colette Alma-Zeestraten, Director of the VNCI (Association of the Dutch Chemical Industry), overall demand for chemicals will increase sharply over the next few years. Although the Dutch market share is expected to drop, chances for growth are clearly present. ‘This is the context we are dealing with. There are all sorts of opportunities, but it will require hard work to take advantage of them.’

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lma went to Delfzijl at the invitation of the SBE (Eemsdelta industrial association) to talk about the role and the influence of the chemical industry in the Netherlands. In her view there is currently a fascinating trend in the chemical sector. ‘We are in the middle of an economic crisis, and many companies are struggling to survive and you often see stagnation. Now, however, the chemical sector is busy transforming itself into an industry that is greener and safer. There is growing self-awareness, the focus is on the future and there are great ambitions!’ KNOWLEDGE INDUSTRY

The VNCI’s history goes back quite a long way. Its hundredth anniversary is in 2018. Alma explains the importance of the chemical industry. ‘The chemical industry is everywhere and its products are in everything. It’s the “industry of industries”. It supplies all manufacturing industries, including the foodstuffs, cosmetics, pharmaceuticals, cleaning agents and the biofuels industries.’ There are nearly a thousand companies in the Dutch chemical sector. The vast majority of them have fewer than two hundred and fifty employees. 12

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The Dutch chemical industry is the third largest in Europe, behind Germany and France, with a turnover of 58 billion euros in 2011. The total workforce is 63,000, of whom a third have a higher vocational or university education. In Alma’s view this makes the chemical sector stand out as a knowledge industry. Finally, there is a substantial investment in research and development - 1.3 billion euros in 2011. It represents two and a half percent of the total turnover. SCENARIOS

In collaboration with Deloitte, the VNCI recently developed a future vision about the Dutch and also the North-west European chemical sector. Four scenarios were formulated on the basis of two parameters. The first parameter is the role of national and international governments, combined with the degree of cooperation there is. The second concerns the speed and direction of future technological developments. The four scenarios developed on the basis of these parameters are Fragmentation, Green Transition, Abundant Energy and High-Tech World. A brief description of these scenarios follows below. According to Alma, Fragmentation is the


worst imaginable scenario, with trade barriers, a lack of cooperation and slow technological advances. Green Transition is about limited worldwide collaboration, where international agreements are only made in the area of greening. The third scenario - Abundant Energy - has a great deal of international cooperation. There is also a breakthrough, so there is abundant low CO2 energy. Under the High-Tech World scenario there is also extensive collaboration and there are very many technological developments in a range of fields. As a result, the world economy receives a strong impulse and enjoys substantial growth. BIOMASS

‘But whichever scenario turns out to be accurate, the chemical industry must take measures to prepare for a strong competitive position in the future,’ argues Alma. ‘This can be achieved through a combination of factors. We have defined a few, including a fully integrated physical and organic network. Part of it already exists, pipelines for instance, but this can be reinforced further. And not just in the chain, but in regard to customers too. In addition, a greater focus on recycling and biomass is

extremely important. The chemical industry must have a flexible approach so that it can use a broad range of raw materials. Moreover, there needs to collaboration with universities and innovative companies, be they large or in the SME sector. There will have to be extensive interchange and dynamics under the label “leading innovative ecosystem”. Finally, it is important that the regulatory framework is transparent and ensures there is a level playing field. It must be proportional and competitive.’ TOP SECTOR POLICY

The chemical industry is one of the sectors for which a top sector, i.e. growth sector, policy has been mapped out. ‘The industry is leading in this, in cooperation with the scientific community,’ Alma explains. The key points in this policy include an ambition to be innovative in a variety of fields. ‘By 2050 the Netherlands must be the leading country with regard to green chemical companies and smart materials. What I mean by the latter is that we concentrate on new products that offer added value,’ elucidates Alma. Human capital is also important. Currently one student in four is doing a technical Europoort Kringen • Review 2013

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COMPANIES IN PROBLEMS AFTER STRINGENT INSPECTIONS The government has tightened up supervision of compliance with safety rules as a result of a number of recent incidents. So much in fact that a number of chemical companies find themselves in difficulties as a consequence. External safety, i.e. managing the safety of members of the public who are at risk because of our operations, is at the top of the VNCI’s agenda. ‘Neighbours are entitled to feel they can be confident we manage things as well as possible,’ is what Colette Alma says about this subject. She recognises that a few incidents happened recently that have caused concerns among the general public. ‘There have always been strict regulations, but chemical companies were not always aware of them because the government did not always manage to translate these rules into practice. For a long time the focus was more on safety than the rules. Now, however, the government is much stricter and the inspection pressure has been increased.’ The VNCI is in discussion with the government about this. The organisation also supports companies in dealing with safety. ‘It is important that companies set high standards and check that they are complied with themselves. A number of chemical companies have got into difficulties as a result of the increased inspection pressure. A milestone has been reached, however, because we have agreed with the government that a distinction will be made between serious and less serious incidents. We are also in discussion with the government about the publication of public inspection reports, in which companies get the opportunity to give their input.’ The VNCI, in collaboration with other parties, has launched the Veiligheid Voorop (Safety First) action plan in order to improve the safety culture in the sector.

subject, and the objective is to increase this to forty percent. The top sectors policy also gives great weight to internationalisation. Companies from countries such as Brazil, Japan and India have to be encouraged to invest in the Netherlands. Furthermore, companies that want to penetrate new markets should be given support. GREENHOUSE GAS EMISSIONS

‘There is one other element I would like to draw attention to,’ continues Alma. ‘That is the objective to reduce greenhouse gas emissions by forty percent by 2030. The chemical sector plays a key role in achieving this target because it is a major energy consumer. We have developed a road map of how greenhouse gas emissions can be cut. It contains an overview of all the possible options, with six 14

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‘BY 2050 THE NETHERLANDS MUST BE THE LEADING COUNTRY WITH REGARD TO GREEN CHEMICAL COMPANIES AND SMART MATERIALS’

Colette Alma

specific indicative solutions - energy efficiency, replacing fossil feedstocks by biomass, underground storage of CO2, recycling, making sustainable products and using renewable energy.’ PROSPECTS

A substantial challenge is facing the Dutch chemical industry over the next few years. But it is a challenge towards which it is working with the necessary confidence. ‘In recent years we have proved we can compete with the Middle East and China. The Netherlands has several advantages: it has a central location and we are able to operate efficiently and effectively thanks to chain integration. We need to extend this lead further in the future. The European chemical sector is renewing itself. It is not so bad if a plant is closed down now and again, provided there is investment in innovations. Our sector will have to convince the financiers and head offices that while the Netherlands is relatively expensive, our industry is well worth investing in. By 2050 the total demand for chemicals will be four times greater than today. The Dutch market share will decrease, but we can still achieve growth here. Those are our prospects. We will have to focus on greening, recycling and chain integration. There are all sorts of opportunities, but it will require hard work to take advantage of them.’ <<


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REVIEW 2013

FIFTEEN PARTIES SIGN UP FOR JOINT APPROACH TO HEAT SUPPLY

RESIDUAL HEAT DISPLACES INDIVIDUAL GAS BOILER

GROWING DEMAND FOR COOLING A communal cooling supply belongs to the system for heating homes with residual heat. The demand for cooling in the city centre is expected to grow in the coming years. It is eight degrees hotter inside the city than outside it. Last year the demand for cooling was about one and a half percent of the demand for heating, but by 2030 this will have increased to about five percent (two hundred GWh). The biggest demand for cooling is primarily in the city centre, the Stadshavens area and the area around Rotterdam Airport. Currently cooling in the city centre is provided by individual ground source heat pump systems and absorption cooling systems. By now there are so many of them that they interfere with each other and reduce each otherâ&#x20AC;&#x2122;s effectiveness. Furthermore, the capacity of the subsoil for storing heat and cold is not infinite. It is therefore better to use a communal system. For the time being it is not clear how the cooling will be provided. One option is to use water from the River Meuse in a Meuse cooling grid. Another possibility is to develop a communal ground source heat pump system.

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By 2030 half of all the homes in Rotterdam will be kept warm by residual heat from the port and industrial zone. The gas boiler will make way for a connection to the heat grid in a hundred and fifty thousand homes, which can result in a CO2 reduction of eighty percent by 2035. Fifteen parties are supporting this, and earlier this year they signed a joint statement of ambition. The plan is to open up the heat grid to different heat producers, who will compete in the ‘heat market’ under independent supervision.

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hy not keep homes and offices warm with heat from the port that would otherwise be lost to the water and the air? That is the idea behind the collaboration between fifteen parties, who seek a ‘futureproof and sustainable answer to the demand for heating and cooling’. Not every city in the Netherlands can choose this sustainable heating option just like that. In Rotterdam the substantial demand from the city coincides with a significant supply of heat from the port. The huge quantity of domestic refuse from the city and region is also used to generate heat and power. ‘We are killing two birds with one stone by utilising residual heat from the port to heat homes. The city will be cleaner and healthier, and we reuse heat from the port that is currently being lost,’ explains Rotterdam lead councillor Alexandra van Huffelen. The fifteen parties worked together on the report ‘Warmtekoudevoorziening 2030; gebouwde omgeving Rotterdam’ (heating and cooling of Rotterdam’s built environment in 2030), which describes the starting points and goals as well as a timeline with the steps involved. ‘I am proud that we have seized, together with the different parties involved from energy, property and port circles, the opportunities that this unique region offers and developed them into futureproof cooperation in heating and cooling,’ says Hamit Karakus, also a Rotterdam lead councillor. NORTH PIPELINE

District heating is not new to Rotterdam. The first district heating network was installed in the city centre as long

ago as the nineteenforties. Currently about fifty thousand homes are kept warm by two E.ON power stations: the Roca power station and the power station in Galileïstraat. Residual heat appeared on the scene as a more environmentally friendly alternative in 2000. This lead to the foundation of the Warmtebedrijf (heat company) and the construction of the Nieuwe Warmteweg pipeline. This is a 26kilometre pipeline between the AVI Rozenburg waste incineration plant to Rotterdam South. The construction is scheduled for completion later this year. Energy company Eneco is also working on preparations for the Leiding over Noord (north pipeline). The route, which is nearly seventeen kilometres long, goes from Rozenburg underneath the Nieuwe Waterweg, via Vlaardingen and Schiedam to Rotterdam North. Meanwhile the required soil survey has been completed and Eneco is now organising information meetings with residents and entrepreneurs. A HUNDRED AND FIFTY THOUSAND HOMES

The report describes a scenario in which the city has a communal heat supply by 2030. The heat comes from the chemical and waste industries in the Rotterdam port zone, but also other sources, for example geothermal energy and bioenergy. The target is to heat half of the three hundred thousand homes in the city and half of the other buildings. This means that over the next few years an additional hundred thousand homes will have to be connected to the communal heat supply. This concerns twenty thousand existing homes and eighty thousand that have yet to be built. By 2030 three-quarters of the stock of housing associations will be heated in this sustainable way. Newly-built houses will no longer be equipped with individual gas boilers and there will be fewer and fewer of them in existing dwellings. DEMAND FOR HEAT

The report describes the scope of the Rotterdam heating supply. Every year the three hundred thousand homes and the other property - including offices, shops, hospitals and schools - consume 6,600 GWh for heating. Homes account for six and a half percent (75,000 GWh) of the overall energy demand of Rotterdam end users. Seventy percent of this is used for heating, so 3,400 GWh. The other property uses eight and a half percent, of which about half (3,200 GWh) is for heating. One of the spearheads of the joint approach is to have better insulated buildings. It is expected that demand in 2030 will be Europoort Kringen • Review 2013

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Fifteen parties signed the statement of ambition in Rotterdam Town Hall.

forty percent lower as a result. When a hundred and fifty thousand homes are connected to the heat grid, a CO2 reduction of eighty percent in this part of the built environment is feasible. A similar reduction applies to the other buildings. The utilisation of residual heat also means that less NOx gets into the atmosphere than when gasfired heating systems are used. LEVEL PLAYING FIELD

According to the planners the reliability of the residual heat supply should be 99.99 percent because it uses several sources. The goal is to offer communal heating on a cost neutral basis when compared to normal prices and be able to create a system with an open structure to which several producers can supply their heat. Technical agreements will be necessary with regard to questions about the sequence in which, with what capacity and at which temperature sources can deliver their heat. Commercial agreements are also necessary with respect to the settlement of costs and proceeds. There will be independent supervision to ensure there is a level playing field. The sources that connect to the system first will also be the first to be used. After several producers have registered, the independent party will ensure that there are proper agreements about the supply to the grid and financial matters. This system of agreements and supervision shall make up the ‘heat market for production’.

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FIFTEEN SIGNATORIES E.ON Benelux Eneco Nuon Stedin Warmtebedrijf Rotterdam Havensteder Woonbron Marktgroep Duurzaam Ontwikkelen Rotterdam

Port of Rotterdam Authority Deltalinqs CleanTech Delta Province of South Holland DCMR Environmental Protection Agency Rijnmond Stichting Warmtenetwerk Rotterdam City Council

PRACTICAL APPROACH

The signatures are there, so what happens now? In the short term the City Council will take the initiative to form a management team, which will ‘stimulate, facilitate and organise’. In addition, implementation strategies will be developed, an Affordability business case will be completed in the summer, and at the end of this year agreements will be set down in a road map about the practical approach for the initial period up to 2020. <<


REVIEW 2013

Asset management as a cultural phenomenon Almost every professional is aware that asset management also has its soft sides. This can be seen primarily from the range of approaches that the different people involved in assets take. The designer has a goal that is different from that of the principal, and the operations manager has yet another. This creates the basis for conflict, but it is difficult to get to grips with and the effects are extremely hard to quantify. This makes the dissertation that Robert van Grunsven devoted to this subject particularly welcome.

W

ithout giving solutions for this dilemma, he outlines a broad perspective of this field and links it to the extensive literature and research about cultural organisational science. Increasing numbers of Dutch organisations are applying the principles of asset management. They attach value to integrated life cycle management and try to optimise the value of their physical assets throughout their entire service life, including the scrap value. Yet the fact that these principles are generally known and applied does not mean that there is no scope for improvement. Sometimes there seems to be a struggle inside organisations between different departments and groups that are engaged in those asset management activities. The theory of organisational culture indicates the possibility that this is caused by cultural differences between these groups and departments. By concentrating management attention expressly on this cultural aspect, in some cases organisations turn out to be

able to make a big step forwards in the way people do things and in the effectiveness of their activities. The attainment of objectives improves as a result. This cultural approach has proved to be well worth it, particularly in the areas of safety assurance and quality management. It emerges that safety levels and quality are improved if they are classified as corporate cultural phenomena. In fact a term like â&#x20AC;&#x2DC;safety cultureâ&#x20AC;&#x2122; has already become completely incorporated in normal management jargon. The question that doctoral student Van Grunsven now poses is whether it is possible that asset management can also be improved by means of a cultural approach. His research idea resulted in the following key research question: which characteristics of the organisational culture have an effect on achieving asset management objectives and how can they be assessed? Assets have no goal as such, observes Van Grunsven correctly. They serve business objectives. Asset management activities are related to performance during the life cycle, the creation of value through the relationship between performance, risks and costs, and through this achieving cost effectiveness. Asset management objectives are linked directly or indirectly to these objectives. Organisational culture is a phenomenon with many layers. The most accessible layer, the explicit culture, is concerned with artefacts that can be heard, seen and felt. The deepest layer contains unconscious fundamental underlying assumptions that are not negotiable, but contribute to determining the actions of individuals in an organisation. The organisational culture has a strong influence on the degree to which an employee makes an effort for the organisation, and the Europoort Kringen â&#x20AC;˘ Review 2013

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REVIEW 2013

THE MANAGEMENT’S ASSUMPTIONS

-T  here is no value for shareholders, or for society in general, without survival and growth - There is an ongoing war with competitors, and therefore you cannot trust anyone outside your company - The CEO must therefore be all-powerful, a lone hero, who has complete control - Data from lower levels in the organisation is by definition unreliable because subordinates only tell you what you want to hear. So every manager depends on his own observations and insights - Organisations are by their nature structured hierarchically - Although people are necessary, they are a necessary evil rather than a source of value in themselves - A well-lubricated organisation does not need people, but work that is done properly.

THE ENGINEER’S ASSUMPTIONS

-T  he ideal work is done by a perfect machine that does it without human intervention - People are problematic; they make mistakes and they should be eliminated as much as possible in the design - Nature can and must be controlled - Solutions must have a scientific and technological basis - The most important work is solving puzzles and problems - The goal of any work is to create useful products.

THE OPERATOR’S ASSUMPTIONS

- I n the end the action of the company is the action of people; they see to it that everything works - The success of the company is therefore founded on competences, learning, skill, knowledge and involvement - No matter how good the procedures and rules may be, you always get unexpected situations that people have to solve - This is why we have to learn how to deal with surprises - Most activities interfere with each other, so communication, mutual trust and openness are very important - The management must give us the right training, support and materials so that we can do our work well.

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degree to which he or she is satisfied when doing his or her job and is motivated to take action. The culture consists of a system of presuppositions among employees that have an impact on the different aspects of asset management. The cultural aspects have many dimensions. An example is the time span of the thinking of an employee or group of employees. Do they only think about tomorrow, or also about next week? Or do they consider much longer periods? This does not mean per se that the employees know about a long-term plan or budget, but they take the consequences in the longer term into account in their unconscious actions. Another dimension is known as SOLL versus IST (target versus actual). Some employees take what there already is as a benchmark. They cling to this and change is difficult for them. They will even oppose it. Others think in terms of SOLL, of how things should be or become. They, on the other hand, want to change the current situation, and in particular improve it of course. Thinking in terms of either SOLL or IST is not exclusively a property tied to the individual. It is also embedded in the organisational culture. There are thus different approaches. Van Grunsven contends that the choice of an approach has to depend on the goal that people have in mind. Naturally it starts with defining the status quo. What are the cultural aspects associated with asset management in my organisation? That calls for research


GM Fremont Plant 1982

GM NUMMI Plant 1986

Employees

5,000

2,500

Absenteeism

20%

2%

Unresolved Grievances

2,000

0

Total Annual Grievances

5,000

2

3-4

0

Comparison item

Wildcat Strikes

Assembly 30% over Japanese Cost per Car

Same as Japanese

Productivity

Worst in GM

Double GM Average

Quality

Worst in GM

Best in GM

Comparison between two car factories, both General Motors; the differences can be traced to cultural differences.

in oneâ&#x20AC;&#x2122;s own organisation that in the first instance is more exploratory than explanatory. Strangely enough an opinion inventory like this virtually never happens in companies. The inventory can clarify whether it is worth the effort - and that will nearly always be the case - to try to change the underlying opinions of the people involved and bring them more into harmony with one another. That would then create an explicit asset management culture for the company, just like there is generally already a very specifically formulated safety culture. In his research Van Grunsven has tried to identify, in the jungle of many hundreds of cultural dimensions, precisely which ones are important to asset management. In the context of this discussion it would be going too far to address them in detail (see also the nearby box). The results show that it is in any event possible and worthwhile to achieve consensus within a group about these assumptions, which are important in regard to asset management objectives. Robert van Grunsven: Describing and assessing characteristics of organisational culture that influence the achievement of asset management objectives. December 2012. Robert van Grunsven is a consultant with CMS Asset Management. <<

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REVIEW 2013

DOUBLING OF CHEMICAL INDUSTRY ENERGY DEMAND BY 2040

NEW TECHNOLOGIES STRENGTHEN DOMINANT ROLE OF OIL BY JIRI HARTOG

For more than thirty years into the future, oil will remain the primary fuel that we will be using worldwide. By 2025 natural gas will take over from coal as the second most important fuel. Global industry particularly the chemical sector - is expected to need much more energy in the future. This can be read in ExxonMobil’s ‘Energy Outlook’.

O

il giant ExxonMobil publishes the report ‘The Outlook for Energy - A View to 2040’ every year. The latest version of the scenario was published recently. It contains a few changes and new features compared with previous editions. The oil company says it considers it crucial to have access to the most accurate projections. That is indeed necessary because over the next five years ExxonMobil wants to invest some 142 billion euros in new projects. CONVENTIONAL OIL

Let one thing be clear: oil will still be around for a long time. In fact, we will continue to need it for many years to come. Over the next few years oil production from ‘unconventional fields’ will increase sharply thanks to a number of technological developments [see box, Ed.]. ExxonMobil expects the demand for oil to have grown 22

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by thirty percent by 2040. In the coming decades the production of ‘conventional’ crude oil will drop slightly in both OPEC and non-OPEC countries. However, greater production of oil from tar sands, crude oil from very deep water and tight oil will more than compensate for this. The last of these is oil that is extracted from source rock. OIL RESERVES

According to ExxonMobil the production of oil from these unconventional sources is crucial in order to meet the growing demand for this raw material. Ten years ago oil companies were a very long way from mastering the production of oil from tar sands and very deep water. It was the same story with tight oil. The technologies that are being used to get oil from source rock can also be used to extract natural gas. ExxonMobil says that oil reserves in 2040 will be nowhere near exhausted thanks to technolo-


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gical progress. By that time more than half of the existing oil reserves will still be in the ground. And as the years pass, oil reserves will only increase because knowledge and technology will continue to develop further. MIDDLE EAST

By 2040 only 55 percent of all oil will be produced in a conventional way. All other oil will be extracted by using unconventional technologies. Considerable growth is this area will occur in North America. By 2040 three quarters of all oil will come from tar sands (Canada), deep water (Gulf of Mexico) or source rock (North Dakota). As a result, overall North American oil production can increase by forty percent in the coming years. The extraction

ACCORDING TO EXXONMOBIL, THE CHEMICAL INDUSTRY WILL BE THE SECTOR WITH THE FASTEST RISING ENERGY DEMANDS

of oil in South America will almost double, thanks to Brazilian deep water and Venezuelan tar sands. Oil production in the Middle East will grow by 45 percent, primarily by extracting oil from source rock formations. Unconventional oil production will also become more important in Africa, particularly in Angola and Nigeria. If we look into the future, ‘unconventional’ will become more and more ‘conventional’ during the coming years. NATURAL GAS

Oil will continue to be the most important fuel by far in the years ahead, while by 2025 natural gas will take over from coal as number two. Unconventional production technologies will also be used to a greater extent in the extraction of natural gas. And that is certainly necessary, because by 2040 demand in North America, for example, will have grown by no less than eighty percent. ExxonMobil expects that by 2020 the United States will 24

Europoort Kringen • Review 2013

ONCE UNECONOMIC, BUT NOT ANYMORE ExxonMobil identifies two specific technologies that enable economically feasible production of oil and natural gas reserves that are difficult to access. For instance, nowadays drilling can be done horizontally. A distance of hundreds of metres can be covered and unconventional sources can be better utilised. An additional environmental benefit is that only one hole needs to be made in the ground in order to extract from multiple sources. Hydraulic fracturing is another technology that is being employed. A mixture of water, sand and chemicals is injected into the rock deep underground. It penetrates very small cracks, as a result of which oil and gas are released and rise to the surface from the source.

not only be able to meet its own needs but will also be in a position to export. Sixty percent of the additional natural gas that will be produced in the future will come from unconventional sources, primarily shale gas. In ExxonMobil’s opinion the greater importance of natural gas offers consumers and the environment some real benefits. It is affordable, reliable, efficient and available. Emissions of CO2 are also significantly lower than those from coal when it is used to generate electricity. There is more than enough natural gas available for the future. The International Energy Agency estimates that a further 28,000 billion cubic metres of natural gas are still in the ground. According to current yardsticks this is enough for over two hundred years. Forty percent of these reserves are unconventional natural gas. CHEMICAL INDUSTRY

The expectation is that industry’s energy needs will grow by thirty percent between now and 2040. The demand for energy in heavy industry - which includes the production of steel, iron and cement - will increase by 35 percent. According to ExxonMobil, the chemical industry will be the sector with the fastest rising energy demands. Twice as much energy will be needed by 2040, which can be explained primarily by the growing demand for plastics and other advanced products. Industry’s energy needs would be much greater if no major steps had been taken in improving efficiency. In the energy sector - an important branch of industry - for example, energy consumption will grow by only five percent. This is explained mainly by efficiency improvements and a reduction in the flaring of natural gas. <<


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REVIEW 2013

CITY DOES NOT BENEFIT ENOUGH FROM PORT

IT SUFFERS THE PAIN BUT GETS NO PLEASURE The port of Rotterdam has grown over the last few years, and future prospects are also bright thanks to the construction of the Second Maasvlakte. It is unfortunate that the city enjoys the associated economic benefits to only a relatively small degree. Yet Rotterdam does bear the full brunt of the negative effects of the port and associated industry, such as environmental pollution and traffic jams. This is the conclusion of Olaf Merk and Theo Notteboom in the OECD case study ‘The competitiveness of global port cities: The case of Rotterdam/Amsterdam - the Netherlands’.

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B

oth investigators argue that by definition the nature of the relationship between port and city is complex. The construction of a port is capital intensive and also occupies a huge area. This is space that a city needs itself so it can grow. The port of Rotterdam has grown substantially in recent years. For example, in the years between 2002 and 2011 volume increased by 4.4 percent, and the port grew its Northwest European container transshipment market share from 32.5 percent in 2006 to 35.1 percent in 2010. Rotterdam also confirmed its position as the second biggest cargo hub in the world and it is known as one of the most efficient ports when it comes to oil and containers. The port serves large parts of Germany, Switzerland, Northern Italy, and Central and Eastern Europe. The port is also well thought of because of its strategic planning, port optimisation and the development of the Second Maasvlakte.

ment was recorded in Rotterdam over the last ten years. A possible explanation for this is the specialisation in wet bulk, which has less effect on employment in Europe. The port of Rotterdam moreover generates relatively little indirect economic benefit. For every additional euro that is spent in the port, the demand for suppliers increases by thirteen cents. The fact that the Netherlands is a small country means that these indirect economic advantages filter through to other countries. German industry, for instance, benefits greatly from a port that works efficiently and is responsible for lower costs. BUSY ROAD NETWORK

It leaves a nasty taste in the mouth that the city has to cope with all the negative local effects of the port. For example air pollution is high in the west of the Netherlands, and certainly in Rotterdam. This is caused

THE FACT THAT THE NETHERLANDS IS A SMALL COUNTRY MEANS THAT INDIRECT ECONOMIC ADVANTAGES FILTER THROUGH TO OTHER COUNTRIES

EMPLOYMENT

Despite these positive developments, the city only shares in the benefits to a limited extent. There is a mathematical model that establishes a relationship between the transit volume in the port and the number of jobs this provides. Every extra million tonnes of freight should lead to the generation of 300 additional jobs. The report states that despite the upward trend in the port little extra employ-

by emissions from industry in the port zone and portrelated transport, the high population density and because Rotterdam is a densely populated urban area with only limited green spaces. Rotterdam residents also have to live with a very busy road network. The OECD raises doubts about whether the infrastructure can cope with the extra traffic flows when operations on the Second Maasvlakte start and gigantic vessels tie up there. Measures have been Europoort Kringen â&#x20AC;˘ Review 2013

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REVIEW 2013 ‘CONCLUSIONS IN LINE WITH HARBOUR VISION’ ‘The OECD’s conclusions and recommendations are in line with Harbour Vision 2030,’ declares Hans Smits, President and CEO of the Port of Rotterdam Authority. ‘In particular the environmental quality has improved in recent decades, environmental limits are not being exceeded anywhere, and the harbour vision is full of actions to enhance the quality of the living environment and accessibility. The harbour vision also contains a series of measures to make Rotterdam more inviting as a location for office activities. The City Council and the Port Authority are working closely together to get more international companies to come to Rotterdam.’ The focus is on port-related commercial services, head offices and shared service centres. Offices that have recently opened their doors include Shell Downstream, Petrobras and Lukoil Benelux. Overall the port has 85,000 jobs. ‘We are also making efforts to strengthen the ties between city and port in other areas. We spend a million euros a year on sponsoring Rotterdam organisations alone and two million euros on education

and knowledge institutes. A one-off project like the new screen in the concourse of Rotterdam’s central railway station costs three million euros and the overall spend on redeveloping the RDM site on Heijplaat will easily reach a hundred million euros. We are therefore working hard on links between the port and the city,’ continues Hans Smits. Growing the support base for the port in the city and the region is part and parcel of the Port Authority’s normal operations. ‘Above all this means raising awareness about the port and in so doing having a positive effect on people’s impressions. A positive image is important for our licence to operate and our licence to grow. We want the people of Rotterdam to be proud of the port,’ explains the Port Authority in a briefing. Activities developed by the Port Authority include the World Port Days, the ‘Havenkrant’ (Port Magazine, of which five hundred thousand copies are distributed in the region four times a year), the FutureLand information centre on the Second Maasvlakte, cycle routes through the port, information panels

taken to restrain the negative environmental effects, such as lower port charges for clean ships, providing shoreside electricity and, in the longer term, constructing LNG bunkering facilities. It remains to be seen whether this is enough, however. ICING ON THE CAKE

The report also expresses doubts about the ties that the people of Rotterdam have with the port. After all, the newest and most active port terminals are located some way from the city centre and part of the port activities take place in inland terminals, such as near Moerdijk. Residents suffer the inconvenience caused by traffic jams, but get too little of the icing on the cake. Most of the jobs in the port are taken by people who do not live in the city. The Stadshavens project was started in 2007 in Rotterdam in order to strengthen the ties between city and port. Efforts are also being made to get young people interested in and enthusiastic about the port. EUROPEAN HEAD OFFICES

What can be done about it? The report suggests two approaches. Firstly Rotterdam can work on developing into a ‘leading international maritime centre’. Unlike port cities such as London and Singapore, the city is not one at the moment. This would make Rotterdam more attractive for industry that has not yet located there. The city is already strong in a number of sectors, such as dredging 28

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in the port, and every two years the Port Authority Tour, during which information meetings take place in ten districts. The targeted investment in the public spaces in the port and, for example, a facelift for Parkkade at the request of the City Council are other examples. The City Council and the Port Authority recently developed the World Port City programme with the aim of giving Rotterdam’s city centre the image of a port city. Part of it involves more collaboration with such organisations as the International Film Festival Rotterdam, the Rotterdam Museum Night and the Power of Rotterdam photography project - port-related images in empty shop windows and films about the port on screens in the city. There is also an ambition to give a significant impulse, together with the City Council, the Maritime Museum and the Port Museum, to developing the Leuvehaven zone into the place where the port’s past, present and future are clearly visible for the city’s residents and visitors.

and salvage work. It is key to retain these specialisms and to focus on clusters that are still missing. It could, for example, try to attract ship owners and the European head offices of carriers, and offer such maritime services as finance and consulting. Attracting such players should be a priority in trade missions. The bio-based economy also needs to be stimulated and the port must play a more central role in the current top sector policy. SYNERGY ADVANTAGES

A second recommendation for Rotterdam is to intensify cooperation with other ports. Amsterdam - the other port that was included in this study - is referred to by name in this connection. Both ports could utilise synergy advantages, such as the joint use of information systems, marketing efforts and lobbying. Amsterdam and Rotterdam can also invest together in the development of inland ports. In the longer term shares could even be exchanged, as ports in the Chinese Yangtze Delta have done. Rotterdam can also strengthen ties with Antwerp by working on a joint petrochemical cluster in the longer term. Finally, the investigators express their view that the three port cities of Rotterdam, Antwerp and Amsterdam - which are different, but are also located close to each other - could reinforce one another and could jointly attract maritime services and new industries. <<


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REVIEW 2013

PLANS IN ROTTERDAM TO DEVELOP BIOMASS HUB

THE HARMONISATION OF SUSTAINABILITY CRITERIA IS DESIRABLE The Port of Rotterdam Authority would very much like to develop into a European hub for biomass. The port sees a future in this field by becoming a focal point for bio-fuels, bio-energy and biochemicals. Storage facilities, for instance, could be used jointly by several companies in order to save costs. But if there is only one, there have to be uniform sustainability criteria in order to increase the exchangeability of biomass and - also not unimportant to drive the costs down. The Port Authority, energy companies and biomass suppliers are aiming to do this.

N

icole van Klaveren, the Port of Rotterdam Authority’s business manager for dry bulk & energy, sees opportunities for the port to develop into a European hub for biomass. According to her, Rotterdam is highly suitable because biomass is already being transported to the port and being used in the industrial complex. Last year about one million tonnes of biomass were landed in the port, mostly to be co-fired in Dutch coal fired power stations. The goal is to welcome eight to ten million tonnes of biomass in 2020. Biomass is important to the port in two ways - to increase sustainability and as cargo. ‘As far as the former is concerned, the Rotterdam Climate Initiative has given us the tough target of halving CO2 emissions by 2025,’ explains Van Klaveren. ‘Biomass and CO2 capture are two important instruments for achieving this, primarily in

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power stations. The fuels cluster is also important in this context. There are already biofuel plants, and biodiesel and bioethanol are being imported. One can see that a start is being made on the transition to biomass. This trend can also be observed in the chemical industry. By linking these three sectors - biofuels, bio-energy and biobased chemicals - to each other, long-term prospects are created for Rotterdam as a European hub for biomass.’ MAKING IT MORE ATTRACTIVE

The second way in which biomass is important to the port of Rotterdam is as cargo. Van Klaveren is expecting the imports of wood pellets and chips to grow substantially over the next few years. ‘For the first ten years this growth will come from imports because European production capacity is close to its limits. Pellets are now being


imported, mainly from North America. After about 2020 more pellets will be imported from Eastern Europe, particularly from Ukraine. However, there are still challenges as regards transport and sustainability. Biomass is more expensive than fossil fuels,â&#x20AC;&#x2122; continues Van Klaveren. â&#x20AC;&#x2DC;It is therefore important to make biomass more attractive. Transport accounts for one third of the costs. There is scope to improve this. The scale of ships is a significant factor in reducing the costs. Sharing storage facilities can also offer benefits instead of individual companies investing in them. It can save a few cents per tonne per day, and the savings can really mount up. However, to achieve this it is crucial that sustainability criteria are harmonised. The first steps have already been taken. We are really focussing on this together with energy companies and pellet producers. It is also not good for the

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economics to use separate criteria. The exchangeability of biomass gives the purchasing parties the benefit of joint orders and economies of scale.’ GUARANTEE CONDITIONS

The energy company E.ON is constructing the new MPP 3 power station on the Maasvlakte, close to the 32

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existing power station MPP 1&2. E.ON would also benefit from an unambiguous sustainability criterion for biomass because the new power station can have up to thirty percent biomass in its fuel. The old installation could not mix in more than ten percent biomass. ‘We have over fifteen years’ experience with co-firing biomass, which is already mixed with the coal before combustion,’


says E.ON’s Marc van der Velden. ‘Different types of biomass can be used, such as cocoa shells, wood chips, abattoir waste and residues from the paper and biodiesel industries,’ he continues. It is notable that the power station cannot co-fire any biomass during the first two years. This is connected to the guarantee conditions of the boiler manufacturer, Hitachi Power Europe. ‘A coal fired boiler is ideal for combusting biomass,’ adds Van der Velden. ‘Co-firing in a coal fired power station results in a much higher efficiency than combustion in a biomass fired power station.’ According to the energy company, the new power station is significantly more efficient than the existing ones. Thanks to the higher steam temperature and pressure, approximately twenty percent more power can be generated from the same quantity of coal. And over twenty percent less CO2 is emitted. SIX ROWS OF ELECTROSTATIC PRECIPITATORS

The new power station is scheduled to start operation at the end of this year. ‘It’s a hypermodern power station, and it can start up just as quickly as a gas fired one. In practice this means it can be started up and shut down in less than an hour,’ explains Van der Velden. MPP 3 has a capacity of eleven hundred megawatts. He describes how the power station works. ‘The coal is pulverised to produce very fine particles, which are blown into the boiler by preheated air. The boiler is at a height of a hundred and fifteen metres. A great deal has been done to protect the environment. Ammonia is used to remove NOx from the flue gas. The fly ash is captured by six rows of electrostatic precipitators, which are connected in series. Each of them removes ninety percent of the fly ash. Finally SO2 is absorbed using lime. There are also detailed plans to capture CO2. A test unit is already in place and the new power station is fully prepared to capture CO2. There’s a demonstration project in the pipeline to capture 25 percent of all the CO2 produced and to store it in an empty natural gas field under the North Sea. Unfortunately, this will reduce the efficiency by two percent.’ MODIFICATION

Max Green in Ghent is another power generator that consumes biomass. Two and a half years ago a coal fired power station was modified to run on 100% biomass. Electrabel GDF Suez and Ackermans & van Haaren invested a total of 125 million euros. Electrabel managing director Philip Pouillie describes it as a major investment for a power station with a service life of seven to ten years. ‘The modification of this power station was a world scoop,’ says Pouillie. ‘We now comply with the strictest European environmental rules, which will apply starting in 2016. We have developed burners that produce very little NOx. This is achieved by using the right quantity

of biomass and air. Pellets are cleaned and pulverised to form very fine particles. Each burner has a blower to transport the pulverised fuel.’ The installation consumes 840,000 tonnes of pellets a year for the generation of two hundred megawatts. This is sufficient to supply 350,000 households with electricity. Compared with the old coal fired power station, the new installation saves the emission of 1.25 million tonnes of CO2 a year. SUPPORT NECESSARY

The lion’s share of the pellets come by sea from Canada and the United States to Ghent in a ship that has been chartered for seven years. In Ghent there is storage capacity for 140,000 tonnes of biomass, which according to Pouillie makes it the biggest biomass storage facility in Europe. In his opinion this modification technology can also be applied in the Netherlands, even in power stations with a bigger capacity. However, he also advocates support. ‘Biomass is expensive, so support is necessary. Also uniformity in certification is very necessary.’ As mentioned earlier, the biomass power station has been operating for over two years. ‘At first it was profitable, and this year we are breaking even. This is not the fault of our project. It is caused by the general malaise in the power generation industry. Power prices no longer cover our costs. We will start making a loss next year, and the losses will increase in 2015. But that is a problem that is much bigger than this story. It is simply extremely difficult.’ BIGGER SHIPS

Seth Ginther, executive director of the U.S. Industrial Pellet Association (USIPA), stands shoulder to shoulder with the lobby for uniform sustainability criteria for wood pellets. The United States and Canada are leading producers of wood pellets. ‘We see harmonisation of sustainability criteria as a means to enable reducing the price of pellets. After all, it’s cheaper if we need to comply with just one sustainability criterion in Europe instead of three. How much could the price be cut? That’s difficult to say. Suffice to say that that during the next five to seven years we want to cut unnecessary costs out of the supply chain. Ways to do this include having bigger ships and using bigger farms.’ According to Ginther last year the USA produced one and a half million tonnes of biomass. This is expected to double in 2013. His organisation represents all the major pellet producers. Pellets come mainly from the south-east of the country. The wood is taken from ‘by-products’ in forests. ‘It’s absolutely not the case that we manage energy plantations. We cut down timber that grows in between the big trees. We also continuously plant new trees, with the result that our forests are getting bigger and bigger. Over the last sixty years the forests in the south-eastern USA have doubled in size.’<< Europoort Kringen • Review 2013

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REVIEW 2013

‘IN 2042 ROTTERDAM WILL BE A BUSTLING METROPOLIS WHERE CLEAN PRODUCTION AND HEALTHY LIVING GO HAND IN HAND’ Rotterdam is unrelenting in fostering its ambition to be the most sustainable port city in the world in its class. This is clear to see in the ‘Programma Duurzaam’ (sustainability programme) and the recent appointment of a heavyweight like Jeroen van der Veer (former Shell CEO) as chairman of the council (the advisory body) of the Rotterdam Climate Initiative (RCI). He succeeds former Dutch prime minister Ruud Lubbers. By 2025 at the latest, the RCI wants the emissions of greenhouse gases in the city to be reduced by fifty percent compared with 1990 to a maximum of twelve million tonnes. In that same year Rotterdam should be a hundred percent ‘climate-proof’.

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T

he RCI was set up a few years ago by Rotterdam City Council, the Rotterdam Port Authority, the DCMR Rijnmond Environmental Protection Agency, and the logistics and industrial companies association Deltalinqs. Some important milestones have already been reached over the last few years. Despite all the region’s efforts to become more sustainable, it leaves a bitter taste in the mouth that energy research institute ECN recently announced that Rotterdam is failing to meet the environmental requirements for the time being. ECN contends that many sustainable steps still have to be taken because otherwise CO2 emissions will not drop by fifty percent, but on the contrary will rise sharply to about 30.8 million tonnes. Incidentally, this scenario is based on the explicit assumption that the RCI takes no further measures from now on. According to ECN, the possible negative scenario is caused primarily by the energy production and industry sectors. All in all not a nice welcome for Van der Veer. On the other hand the DCMR Rijnmond Environmental Protection Agency, acting as the expert partner in the RCI, asserts that the ECN study contains no judgements about the ‘feasibility’ of the ultimate objective. The DCMR emphasises that there is currently no reason to change the RCI’s objective and says, ‘In order to achieve the intended ultimate CO2 reduction, the RCI continues to push for measures in the areas of energy efficiency in the city and port industries, renewable energy, CCS (Carbon Capture and Storage) and sustainable mobility.’ In any event, every three years the RCI makes it own calculations about whether the planned approach is producing the desired results or whether some fine-tuning is necessary. New calculations are currently being made and the results will be available shortly. EXTRA EFFORTS

That evaluation will without doubt also address the very recent news that Amsterdam, Rotterdam, Utrecht and Arnhem will not comply with the obligatory EU standard for nitrogen in 2015. In that case Brussels can impose large fines. The four local authorities immediately pressed State Secretary Wilma Mansveld (Infrastructure and Environment) for additional measures by the central government because, as the cities themselves put it, ‘Air pollution is a phenomenon that crosses borders.’ The local authorities moreover think that the measures they have taken themselves in recent years to make the air cleaner and healthier have had an effect, but it turns out not to have been enough. ‘Unless there are extra efforts, we are in danger of not being able to comply with the standards in time. The situation in our cities is beginning to become critical.’ According to the cities it is now time for action by the central government. Also, at the end of last year the environmental organisation Milieudefensie was already urging the State Secretary to get to grips quickly with the nitrogen problem, which is a threat

to public health. According to them, air pollution in densely populated areas creates many health problems. Nitrogen emissions are currently caused primarily by traffic because industry has already dramatically reduced its nitrogen emissions. Compared with the problems associated with nitrogen and the reports from ECN that the environmental indicators are still on red, the critical response from the green political party Groen Links Rotterdam to the appointment of Van der Veer as the RCI’s figurehead seems pretty trivial. The party wonders whether Van der Veer, in view of his Shell background, is the right person to give substance to the ambition to halve Rotterdam’s CO2 emissions. Rotterdam City Council reacted to this by pointing out that with his background, his knowledge of the industry and energy sectors, and his international profile, Van der Veer is just the person to help the RCI move towards achieving its goals.’ The message coming from the RCI offices is that in any event it is better as far as this point is concerned to focus all possible attention on the initiatives that have been developed and the many plans that are being implemented. This position is understandable if you consider the quantity of energy that has already been devoted to the project and the fine results that have already been achieved. People have furthermore rolled up their sleeves and are buckling down to actually achieving all ambitions in the years ahead. The starting points for these ambitions are clearly spelled out in the ‘Programma Duurzaam’ sustainability programme drawn up by Rotterdam, which is a very major player in the RCI. This programme, with about a hundred pages, is an impressive document. Almost poetical texts make it clear that the authors are not interested in thinking on a small scale. What follows is a good example. ‘In 2042 Rotterdam will be a bustling metropolis where the port and the city are interwoven. Clean production and healthy living will then be two sides of the same coin, and residual heat from companies will create a comfortable climate in the city. Knowledge and skill will create a prosperous economy. The city and the port will let each other grow. What we now call the “city on the river” will then be a fabric of flows and recycles of water, energy, raw materials, goods and waste. A network of information and knowledge, of synergy and vigour. At that time Rotterdam will be the classic example of “the good life”: in balance with the environment, a sociable atmosphere, with respect for diversity, in good health and permanently developing.’ DO NOT SQUANDER THE WORLD

The sustainability programme was signed by Ahmed Aboutaleb, mayor of Rotterdam and also chairman of the board of the RCI and lead councillor Alexandra van Huffelen (Sustainability), who moreover chairs the RCI management team. They sum up on behalf of all the participants in the RCI as follows: ‘In this document we are deliberately looking thirty years into the future. That is one generation away and Europoort Kringen • Review 2013

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REVIEW 2013 it resonates with what many people in Rotterdam see as the most important driver in their lives: a better future for their children and grandchildren or future generations. The current generation must not squander the world, but hand it over in good condition to following generations. We can only carry out this task if we all put our shoulders to the wheel. We can set ourselves far-reaching ambitions by working together. And that is essential because a really sustainable policy is not a little less of everything, but choosing the very best.’ Further on in the programme it is once more underlined that Rotterdam has to become an economically strong city, where companies want to have their place of business, where entrepreneurs are given scope, and where there is attractive and high quality work to be found. A healthy city with good air quality and little noise nuisance.’ Sounds ambitious enough. However, everyone knows that there is a long and winding road and many, many euros between this pipe dream and reality. So far the RCI’s direct annual budget has been about six million euros. This has been and is being used to initiate public and private investments that are many times bigger. In the last three years alone over 360 million euros has been invested in sustainability. This shows that there is real determination to have sustainability deeds to match the sustainability words. For any of our readers who may be critical, it is fitting to remember the fine Chinese proverb that says, ‘Even a journey of a thousand miles starts with one step.’ MAXIMUM EFFORTS

In any event, current reality - thanks to the RCI - is that many useful steps have already taken in the region, which dyed-in-the-wool critics should also take heed of. The sustainability programme gives an overview of the results once more and new plans are not just identified but underpinned as well. The RCI board does not pull its punches when it says that, ‘Sustainability will only lead to prosperous economic conditions if the port and industry really work together and pull out all the stops in order to implement the necessary ecological long-term solutions. Sustainability offers the prospect of significant economic opportunities for industry and the port. To achieve this, though, it is necessary to have economic activities go hand in hand with smaller quantities of raw materials, less waste and lower emissions

of harmful substances.’ There is a positive mood about this point. It is pointed out, for example, that the port and industry are already collaborating on many things and therefore have a good reputation to maintain for achieving objectives. Looking at it from a down-to-earth point of view, it is also crucial. The Rijnmond economy, which contributes about 8.5 percent of Dutch gross domestic product, is of national significance. On the other hand the region is responsible for some sixteen percent of the CO2 emissions in the Netherlands. This percentage will get even higher if there is no success in reducing these emissions. That is, incidentally, easier said than done, because many of the activities of profitable concerns in the region are energy intensive. A positive aspect, however, is that companies in the region, individually and through the RCI, are going to great lengths to cut CO2 emissions. For example, the Rotterdam Port Authority and Deltalinqs recently announced that they will jointly be providing five million euros for additional sustainable initiatives in the port. The RCI heartily applauds all initiatives because, ‘Further growth, a doubling of economic activity in the port and industry, and more intensive use of space will only be possible if the port and industry use their very best efforts to make all their activities sustainable.’  <<

THE RCI’S TEN SUSTAINABILITY TASKS BETWEEN NOW AND THE END OF 2014 - Be in the lead in reducing CO2 emissions; - Improve energy efficiency; - Switch to renewable energy and biomass as raw material; - Promote sustainable mobility and transport; - Reduce noise nuisance and promote clean air; - Make the city greener; - Increase sustainable investments and promote sustainable products and services; - Increase the support base for sustainability and the embedment of sustainability in education and research; - Prepare for the consequences of climate change; - Promote sustainable area development.

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REVIEW 2013

SECTOR FACING ‘CHALLENGING YEARS’

COMPETITIVENESS UNDER SERIOUS PRESSURE The Dutch chemical sector is doing extremely well in Europe. In recent years its share of the European chemicals market has grown and it is certainly not out of the question that it will increase further. However, the European chemical industry as a whole is having a difficult time because the American industry is using cheap shale gas. Over the next few years the smaller plants that are not in a cluster and have relatively high material transport costs to and from their sites will be the most vulnerable in this unequal competitive struggle. Yet there are also highlights.

I

NG Bank’s Economic Bureau analysed the chemical sector in its Sectorvisie (Sector Vision) report. 2012 was a good year for the Dutch chemical sector. While the output of the European chemical sector dropped by one and a half percent, in the Netherlands it actually increased by over five percent. Base chemicals, such as petrochemicals, artificial fertilisers and polymers, account for the lion’s share of production in the Netherlands. Base chemicals represent over eighty percent of the total value of chemicals production. In 2012 Dutch production amounted to about 59 billion euros. This represents a growth of nearly nine percent compared with the previous year. This growth in turnover can be explained not only by oil-related price increases but also by a substantial increase in volume.

CHINA

Over the last ten years the Dutch share in the Northwestern European chemicals market has risen from eleven to fourteen percent. But the role of Europe in the global force field is being eroded more and more. In 2012 the total production of the chemical industry worldwide amounted to 2,750 billion euros. China is the most important producer, with a turnover of 570 billion euros. With a production 38

Europoort Kringen • Review 2013

value of 680 billion euros, Europe is still bigger but it is clear that it is going to lose more and more ground. It is, incidentally, certainly not the case that production is shifting en masse from Europe to China, because this is only happening to a limited extent. The growth that the Chinese chemical industry is experiencing can be explained primarily by the growth in investment and consumption there. CHEAP SHALE GAS

The report mentions the ‘challenging years’ awaiting the Dutch chemical sector in the future. First of all the economic forecasts for Europe are not rosy. On top of this, the impact of cheap shale gas is manifesting itself in the cost prices in the American chemical sector. In 2000 a paltry one percent of all the natural gas produced was shale gas. In the meantime this has climbed to over 35 percent. As a result of this, since 2010 American gas prices have been clearly lower than prices in Europe. American producers can use cheap shale gas as a source of energy and also in many cases as a feedstock too. Shale gas is a raw material for manufacturing ethylene, for example, which in turn is used for resins, shampoos, coatings, solvents and plastics. The production prices of ethylene in the United States


Figuur 5 Gasprijzen Europa en VS lopen vanaf medio 2010 uiteen index, $ per eenheid

Diverging gas prices USA and Europe since 2010 (index $ per unit)

200 180 160 140 120 100 80 60 40 20 0

08

09

10 Europa

11 12 VS Henry Hub

13

Source: Sectorvisie Chemie, ING Economic Bureau

Bron: EcoWin

oplossingsmiddelen en diverse kunststoffen/polymeren. De percent. A third ‘mitigating factor’ is the extraction of shale are about five hundred dollars per tonne, which is some gas in Europe. Steps are beingin taken to extract gas seven hundred dollars (!) cheaper than the current prices productiekosten van ethyleen bedragen de VSshaleinmiddels in Spain and Poland, although according to ING this is in Europe. The result of these developments is that happening at a ‘very slow pace’. It is also expected that the chemicals business are looking to the ca.major $ players 500in theper ton en komt daarbij in de buurt van de prijzen in maximum production capacity of the American chemical USA more and more when making major investments. industry will not be enough to satisfy the further growth such as Shell, Dow, Chevron, ExxonMobil and hetCompanies Midden-Oosten. Voor West-Europa geldt een kostprijs in global demand. The last comment in this context is the Lyondell Basell are reopening plants and making plans for advantage that clustered companies have. Competitiveness significant expansions. Between them American chemical van circa $ 1200. Ook voor de productie van stikstof dat tecan be enhanced as a result of efficiency improvements that companies have investment plans amounting to some forty billion dollars ready to go. The completion of these plants is can be made by utilising each other’s residual heat or CO rugkomt kunstmest vormt emissions. gas een zeer belangrijke comexpected betweenin 2016 and 2018. ponent (circa 70% van de verkoopprijs). Productie van bijA doom scenario for the Dutch and European chemical None of this alters the prospect that the European chevoorbeeld (box 2)thisis goedkoper gesectors appears to be ureum emerging. Yet according to ING is hierdoor mical sector has someveel difficult years ahead of it, with low certainly not the case because there are ‘mitigating factors’. margins, very limited turnover growth and restructuring. worden in ofde VScheap dan incountries Europa. Firstly, the imports LNG from producing The position of the Netherlands chemical sector within 2

MITIGATING FACTORS

MODEST GROWTH

like Qatar and Nigeria will increase. Less will be exported to the USA because there they have their own cheap shale gas. In addition, the European oil-based chemical industry has the advantage that - although the future is uncertain no sharp increases in the oil price are expected. In recent months the crude oil price has dropped by seventeen

Europe is strong, thanks to the geographical position of clusters with plenty of capacity. A further increase in the Dutch share of European chemicals production is therefore probable. A drop in production of three percent is expected this year, with stabilisation in 2014 followed by modest growth.  <<

Investeringen chemie nu vooral gericht op VS De realiteit is dat de grote chemiebedrijven hierdoor hun pijlen veel meer richten op de VS dan op Europa, zeker als Europoort Kringen • Review 2013

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Column JAAP LUIKENAAR

Jaap Luikenaar, communication advisor for ports and hinterland

‘MAINPORT’ EUROPE?

E

urope has over twelve hundred sea ports along its seventy thousand kilometres of coastline. More than three hundred (!) of these ports are of vital importance. So anyone who thinks that there are only three ports of any significance - Rotterdam, Antwerp and Hamburg - is mistaken. At least this is the reasoning of European Union transport commissioner Siim Kallas. He published his new vision on sea ports this spring. The term ‘Rotterdam Mainport Europe’ appears to be old hat. It can be dumped in the waste paper basket. In the perception of Brussels, ‘mainports’ (i.e. major transport hubs) are responsible primarily for road congestion and environmental pollution. Spreading out all those port activities a little bit better improves the quality of life in port zones in ‘saturated regions‘. And furthermore, is it not fairer to let smaller ports also profit from the growth that the big boys are experiencing? Currently no less than twenty percent of European sea commerce passes through the three giants, and this volume will have to be better distributed among more ports. Three hundred. They moreover have spare capacity and it would also stimulate them to adopt a somewhat more efficient and competitive way of working. So we, as Europe, would all benefit from this and we would be able to handle the expected growth in transport efficiently in the coming decades. So says Kallas. Divide and rule, social engineering by government, levelling down - these are the thoughts that immediately come to mind when reading his latest port plans. And oh yes, the concept of a planned economy also went through my mind. Kallas, didn’t he come from Estonia … a touch of the Brezhnev or Khrushchev approach perhaps? The packaging was nice. ‘Commission proposes upgrade for 300 key ports’ said the heading of the European Union press release. An upgrade, so more competition, that sounds good. So there is nothing wrong, right? The heading was gratefully adopted by many media. By 2030 the plans should generate no less than ten billion. Obviously it’s going to cost money, but Kallas mentioned nothing about that.

I’m trying to imagine how these three hundred (318 to be precise) other ‘important’ ports can take over part of Rotterdam’s role as a ‘mainport’. How do you persuade BP, Shell and Exxon Mobil to exchange the Botlek for a sunny (that’s one advantage anyway) spot on the Spanish, Portuguese or Greek coast? Does the chemicals cluster have such little added value? And would ECT or APM, let alone RWG, want to abandon its site on the First or Second Maasvlakte for a terminal on the Italian Riviera. And once the containers are on the quayside there, how do you get them to the German or Central European hinterland? Is it not so that ‘mainports’ are intended primarily to service the European hinterland? Are we going to dig some extra inland waterways or extend the Rhine and the Meuse towards the Mediterranean? Construct a new Betuwelijn rail link … straight through the Alps? A ‘spaghetti junction’ in Livorno? Or shall we go to Kallas’s Estonian home ports of Tallin, Rohuküla and Kuvastu and give friendly Baltic neighbouring ports like Klaipeda and Riga a helping hand by dredging them to a depth of 25 metres using euros from Brussels (so therefore also from the Netherlands/Rotterdam)? Because good access by means of deep water right up to the front door and a comprehensive network of hinterland connections are the crucial competitiveness factors for a sea port. Every port manager will tell us that. Mr Kallas has spoken. In the near future his plans - they contain much more about equality and transparency between ports - will have to go through a long political process before they are done and dusted. Rotterdam, Europe’s ‘mainport’ with its Europoort, Eurogeul and Euromast, can start whetting its knives. Shoulder to shoulder with Antwerp and Hamburg - it is time to lock horns with Brussels. Writing a position paper for Kallas is not difficult. Take any secondary school geography text book and copy the list of advantages that a ‘mainport’ has: substantial commercial flows, concentration, cluster forming, versatility, economy of scale. Good luck!

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REVIEW 2013

PORT OF ROTTERDAM AUTHORITY CRITICAL ABOUT PLAN TO UPGRADE EUROPEAN PORTS

‘YOU SHOULD NOT WANT TO CHANGE THAT’ BY JIRI HARTOG

The European Commission has pointed out major differences in the performance of the different ports in Europe and, mindful of the growing flows of freight, it wants to upgrade the most important sea ports, of which there are over three hundred. Currently a significant share of the transshipment takes place in the ports of Rotterdam, Antwerp and Hamburg. The EC hopes to correct this ‘lopsided growth’ and prevent congestion by improving the other ports in Europe. It believes a saving of ten billion euros can be achieved. The Port of Rotterdam Authority has its doubts about the plans, which were presented in Brussels this spring.

E

urope has about seventy thousand kilometres of coastline and some twelve hundred ports. The region has a port density that is of the highest in the world. They are of great importance to European countries because 74 percent of the imports and exports pass through sea ports. The volume of freight in European ports is expected to rise by fifty percent by 2030. This increase will have a positive impact on economic growth and employment. The European Commission (EC) has calculated that over the next few years 165,000 new jobs can be created in European ports. Another development that European ports will have to contend with is the advent of the latest generation of container carriers, which will have a capacity of up to eighteen thousand containers. That is the equivalent of a traffic jam stretching from Rotterdam to Paris. In addition, there are different trends in the pipeline in inland shipping to which ports will have to adapt. There is greater demand for shore-side electricity, LNG as a fuel is imminent, and there is a shift in the energy trade from oil to gas. There is a need for large gasification installations in ports and also for potential volumes of dry biomass. REDUCING THE GAP

The EC expects there will be problems if European ports do not adapt to cope with the expected growth. And 42

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performance varies greatly between one port and another. The three ports of Rotterdam, Antwerp and Hamburg currently account for a fifth of all goods that are imported into Europe by sea. The EC’s reasoning is that differences in performance between ports are at the expense of efficiency. There are greater distances, major detours, longer routes by sea and land, and ultimately higher emissions as a result of transport, and more traffic congestion. ‘Brussels’ is concerned that these problems will only get worse if nothing is done. The gap between the best and worst performing ports therefore needs to be reduced. Ports that have not adapted to the new economic and logistics requirements should team up with ports that have already got their house in order. According to the EC, performance differences undermine the efficiency and sustainability of the trans-European transport network and the competitiveness of the European economy. SHORT SEA SHIPPING

One of the proposals being made by the EC to get ports to be more efficient is the application of transparent and open procedures for selecting port service providers. Excessive prices charged by operators with exclusivity rights can be combated by establishing rules. The EC believes that an open and competitive environment for port services increases competitive pressure and encoura-


ges operators to provide better and more reliable services. What is more, European ports should have better connections to the general transport network. For example, it is advisable to stimulate short sea shipping, particularly in the region around the Mediterranean Sea, as an alternative to land transport. Short sea shipping will benefit

‘BUT COMPETITION WILL ALWAYS REMAIN IN COMMERCIAL MATTERS’ from this with expected growth of between four and eight percent, and new jobs will also be created in this industry. A third measure is to create a more attractive investment climate. Ports will be given greater freedom to set charges and collect them. The EC thinks that the performance of ports can be improved by giving port authorities greater autonomy.

NO FEARS

The Port of Rotterdam Authority is referred to in the EC’s plans as one of the three ports that have become front runners in the European port sector as a result of ‘lopsided growth’. Through its spokesman Sjaak Poppe, the Port of Rotterdam Authority has let it be known that it is not fearful about congestion that can occur in the years ahead on roads from the ports to the hinterland. ‘We do not share these fears,’ he says. ‘In Harbour Vision 2030 we have analysed the trends in freight transshipment over the next twenty years and what they imply for the infrastructure. Through a combination of modal shift, namely relatively more cargo by rail and inland shipping, and removing a number of bottlenecks in the hinterland, for example by constructing the highly publicised third railway line between Emmerich and Oberhausen (in Germany). This last project obviously has to go ahead.’ PRICE-QUALITY RATIO

The EC wants to reduce the differences in performance between the good and the bad ports. What does the port of Rotterdam think about this intention? Poppe has the following to say. ‘The performance differences arise largely from the geography and the distribution of the population across Europe. The Northern European ports are doing well because this part of Europe has easily navigable Europoort Kringen • Review 2013

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REVIEW 2013 TOP 20 EUROPEAN PORTS PORT

COUNTRY

2012

2011

2010

1. Rotterdam 2. Antwerp 3. Hamburg 4. Novorossiysk 5. Amsterdam 6. Marseille 7. Bremerhaven 8. Algeciras 9. Primorsk 10. Valencia 11. Le Havre 12. Grimsby/Immingham 13. St. Petersburg 14. Constantza 15. Genoa 16. Trieste 17. Dunkirk 18. London 19. Zeebrugge 20. Gothenburg

Netherlands Belgium Germany Russia Netherlands France Germany Spain Russia Spain France UK Russia Romania Italy Italy France UK Belgium Sweden

441.5 184.1 130.9 117.4 94.3 85.6 84.0 83.0 74.8 65.7 63.5 60.1 57.8 50.6 50.2 49.2 47.6 43.7 43.5 41.7

434.6 187.2 132.2 116.2 93.0 88.1 80.6 76.9 75.1 65.8 67.6 57.2 60.0 46.0 50.4 48.2 47.5 48.8 47.0 41.3

430.2 178.2 121.2 117.1 90.8 86.0 68.7 65.7 77.6 63.7 70.2 54.0 58.0 47.5 50.7 47.6 42.7 48.1 49.6 44.3

Source: Haven in Cijfers, Port of Rotterdam Authority.

port authorities are government-owned. Collaboration in areas where you should not be competing, such as safety and the environment, is fine. But competition will always remain in commercial matters. This results in the best price-quality ratio and that’s in the interests of consumers and producers.’ SEVERAL INTERESTED PARTIES

rivers, an extensive railway network - thanks in part to the fact that the land is flat - and there is a great deal of shipping traffic to and from the other side of the North Sea (Great Britain, Scandinavia and the Baltic). Furthermore, the biggest concentrations of industry and inhabitants are to the north of the Alps. You should not want to change that.’ According to Poppe, knowledge and experience are already being shared among European ports through the ESPO, the European Sea Ports Organisation. ‘Virtually all 44

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The EC’s plan to select port service providers in a transparent and open way ignores the fact that this already often happens in Rotterdam. ‘Space is scarce and so we often issue land on the basis of an open assessment procedure,’ explains Poppe. ‘Take the issue of land for RWG’s container terminal and the Shtandart tank terminal. There is already competition among different service providers because there are several offerors, such as tugboat and bunker companies. If several parties are interested in doing certain work, you have the responsibility as a port authority to make sure the selection is transparent and objective.’ Poppe thinks that the EU proposal to give ports greater autonomy in setting charges applies primarily to Southern European ports. He explains his reasons as follows. ‘We have had a covenant with Deltalinqs for years, for example, about the way in which the business sector is involved in setting port charges. That is done differently in some cases, particularly in Southern European ports. If port authorities there also set port charges on the basis of proper consultation and in a transparent way, it will lead to improvement of the “port product” in the long run. This is important in order to let coastal shipping grow. This, in turn, reduces the pressure on the roads and railways.’ <<


LIBBENGA BV KONSTRUKTIEBEDRIJF Kotterstraat 20, 3133 KW Vlaardingen Postbus 119, 3130 AC Vlaardingen Telefoon 010 - 434 39 91 010 - 435 90 35 Fax 010 - 434 61 23 http://www.libbenga.nl e-mail: libbenga@wxs.nl

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REVIEW 2013

IMPROVING THE SAFETY CULTURE IN REFINERIES

LOCATION MANAGER MUST SET A GOOD EXAMPLE

Generally speaking the standard of safety in Dutch refineries is good. In recent years there have been systematically fewer personal accidents as compared to American and other European refineries. But every incident is one too many. So says the VNPI (Netherlands Petroleum Industry Association). The best way to prevent them from taking place is for a refinery’s top management to demonstrate that it makes efforts for, and is committed to, a good safety culture.

T

his summer the VNPI published the status of safety in refineries in a communication paper. In the Veiligheid Voorop (Safety First) action plan developed by the VNO-NCW (Confederation of Netherlands Industry and Employers), a number of industries with companies that come within the scope of the Major Accidents (Risks) Decree (BRZO) commit themselves to improve safety performance on the basis of a number of action items. The underlying principle is that more is needed than statutory compulsion to achieve a better safety culture. It is also important to apply procedures logically and consistently and to disseminate safety policy. In other words, the work attitude and the behaviour of everyone working in the company.

INVOLVED LEADERSHIP

Anyone who has worked in a refinery or has visited one on occasion knows that concern for safety has dominated in these installations for years. According to the VNPI the cornerstone of policy is based on the systematic recognition of risks and risk awareness. In practice this can only be applied properly if there is a good safety culture, which in turn calls for involved leadership, ongoing improvement of the safety management systems, and active cooperation with the local safety networks. The association contends that it is necessary to investigate every incident - without 46

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asking questions about culpability - and to learn lessons in order to prevent repetition. RISK OF ERRORS

The VNPI has a number of working groups in which representatives from the different refineries hold discussions with one another. One of them is the personal safety working group, in which safety managers share their knowledge, experience and good practices. The working group collects all personal accidents in a database. These are accidents involving refinery employees and/or contractor personnel. Injuries to hands or arms (44 percent) or the head (33 percent) account for the lion’s share of the accidents. A detailed analysis of the information led to the conclusion that no fewer than three-quarters of the accidents can be traced back to factors related to the safety culture, such as how the work is organised, incorrect use of protective equipment or accepting situations associated with a higher risk of errors. With this information in mind, the VNPI undertook a number of actions, for example the development of the leaflet ‘What do you do with your hands?’. It explains how injury accidents involving hands can be avoided. According to the VNPI, the leaflet has been so successful that it is available as good practice for other industries too. The VNCI (Association of the Dutch Chemical Industry) is already offering it to its members.


VNPI The VNPI is an association of nine oil companies in the Netherlands that refine oil, market petroleum products and sell them at service stations. The association has the following members: Argos, BP, Esso, Kuwait Petroleum, Lukoil, Shell, Delek, Total, Gulf and Tamoil.

CHANGE PROCESS

Besides personal accidents there can also be leaks, which might result, for example, in the release of a gas cloud, a fire, an explosion or air pollution. In the industry this is called loss of containment. The VNPI has set up a consultative body for this subject too - the process safety working group. In its meetings, safety engineers from Dutch refineries share their experiences with these types of events. It emerges from the information that has been compiled that a quarter of the incidents have a technical cause and a quarter have a direct operational background. More detailed investigation revealed that in many cases incidents are caused by a departure from a change process that has been mapped out beforehand. Dutch refineries have a good score for process safety compared with other European refineries. GENERIC STANDARDS

Like other establishments covered by the BRZO, refineries are also subjected to inspections by the competent authorities. Dutch refineries have each had their own safety management systems for a long time. Most of these systems came from their parent companies. They have not been certified as being compliant with generic standards, but they do contain comparable elements, and they consequently compare well with the system used by the Dutch government. The results of all inspections are collected

and analysed in the VNPI working groups. On average Dutch refineries have a score of 3.3, where three is ‘reasonable’ and four is ‘good’. The safety level is therefore better than reasonable. Refineries get the lowest score for their management of change. It is less than three. NEAR MISSES

The VNPI has established that the findings of the competent authorities and their own analyses agree well. It says it considers the efforts and involvement of the top level of management to be the most important factor for a good safety culture. The top refinery bosses also meet one another regularly in a VNPI working group. The Refinery Committee consists of the location managers of all refineries. They meet monthly to go through incidents and near misses, discuss analyses of trends and review improvement plans. In order to improve the safety culture, the VNPI decided - as part of the Safety First initiative - to use the number of senior management inspections as a yardstick for leadership. One of the most important goals that the VNPI wants to achieve this year is a detailed specification of what exactly a management inspection at the working level involves. This is because Dutch refineries may be doing well compared with their European colleagues, but this gives the association no entitlement to be satisfied. Or, as the VNPI says, ‘Every accident is one too many.’<< Europoort Kringen • Review 2013

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REVIEW 2013

BIOMASS SOURCES PUT ON THE MAP BY JIRI HARTOG

The Centre for Research on Multinational Corporations (SOMO) has investigated the sources of the biomass that energy companies use to generate electricity. The Netherlands is a major consumer of biomass and it emerges that the imports mainly come from the United States, Canada and Russia. Increasingly, however, biomass is also coming from developing countries. SOMO believes that energy companies should be more open about this. The companies are particularly secretive about who exactly supplies them with the biomass. According to SOMO it is consequently not possible to establish with certainty that the production of wood pellets does not lead to environmental damage and violations of human rights.

T

he Netherlands is a leading buyer of biomass - primarily wood pellets - in Europe. One of the reasons for this is that the EU has set itself the target that by 2020 twenty percent of the energy consumed must come from renewable sources. On top of that, in recent years the Dutch government has strongly encouraged the use of biomass to generate power through various measures. Wood pellets account for 99 percent of the biomass that is consumed by energy companies in the Netherlands. They are made from sawdust, twigs and branches from forests, timber from specialised plantations and even whole trees if timber prices are low. Europe is the worldâ&#x20AC;&#x2122;s biggest buyer of wood pellets, with Denmark, the Netherlands, the United Kingdom and Italy as the biggest consumers.

OLIVE RESIDUES

In 2011 renewable energy had a 10.9 percent share of the total energy mix. Six percent of the energy was generated through the combustion of biomass. Natural gas was the primary feedstock for generating power, with a share of sixty percent. In second place was coal, which accounted for eighteen percent. The Netherlands is not big enough to produce the biomass needed to generate power itself. 48

Europoort Kringen â&#x20AC;˘ Review 2013

The country simply does not cover a big enough area. If the Dutch wanted to achieve the climate objective solely by co-firing biomass, a plantation would be needed that is fifteen to twenty percent bigger than the Netherlands. In 2011, 21 percent of the biomass combusted in the country was produced here. There are four categories: wood pellets, wood chips, wood waste and nonwood residue from the agricultural sector. The last of these has the biggest share. In addition, cocoa and olive residue, rejected animal feed, fruit pulp and ground bones are used as biomass. Many of these products do not originally come from the Netherlands but are produced by industries present in the country. DOUBLING

The most important suppliers of biomass to the Netherlands are to be found in the United States (21 percent), Canada (eighteen percent), Russia and the Baltic states (eleven percent), Southern Europe (ten percent), other Western European countries (five percent), Oceania (two percent) and South Africa (one percent). It is interesting to report that the total estimated value of co-fired biomass in 2011 was 182 million euros. By comparison, coal cost 943 million euros and the cost of


natural gas to generate power was 1.1 billion euros. In 2011 the power companies in the country combusted a total of 1.6 million tonnes of biomass. In the reasonably short term GDF Suez, E.ON and RWE will open three new coal-fired power stations, which have the option to co-fire biomass. Nuon is also busy making a coal-fired power station suitable for co-firing biomass and Eneco has recently commissioned a power station that runs exclusively on biomass. In view of these developments SOMO expects that when all these power stations are operational, the demand for biomass will at least double.

DUTCH DEMAND FOR BIOMASS WILL PROBABLY DOUBLE IN THE SHORT TERM ENECO: ‘NO BIOMASS FROM DEVELOPING COUNTRIES’

SPECIFYING

As can be seen in table 1, RWE (727,000 tonnes) is the biggest consumer of biomass. It is followed by GDF Suez (452,000 tonnes), Eneco (319,000 tonnes), E.ON (200,000 tonnes), Delta (191,000 tonnes) and Nuon is at the bottom with almost 57,000 tonnes of biomass. Of these six energy companies, Eneco emerges as the most transparent, followed by RWE and GDF Suez. Delta was the least cooperative. As a rule the companies are not prepared to provide information about specific suppliers of biomass, or the forests, plantations or industrial locations where it comes from. Also the companies do not want

Eneco spokesman Marcel van Dun said he was content with the report’s conclusions. ‘Eneco emerges as one of the best, and we are described as using best practice,’ says Van Dun. He says he provided researchers with all the requested information. Currently the energy company is conducting tests in its new ‘Golden Raand’ biomass fired power station in Delfzijl. ‘It runs on wood chips from waste wood sourced in the Netherlands, Belgium and the United Kingdom. We do not buy any biomass from developing countries,’ concludes Van Dun.

Europoort Kringen • Review 2013

49


REVIEW 2013

COUNTRY OF ORIGIN

NUON

GDF SUEZ

RWE

E.ON

DELTA

ENECO

TOTAL

USA

8.960

53.158

288.092

Netherlands

5.788

25.609

72.319

Canada

7.789

41.962

248.807

298.558

Portugal

3.841

107.727

45.833

157.401w

Latvia

64.847

13.095

77.942

Estonia

54.135

Russia

31.631

Germany

37.666

Australia

7.788

France

350.210 200.000

19.000

54.135 19.643

51.274 37.666

26.190

33.978

22.653

South Africa

22.653 6.313

Spain

3.275

321.716

13.095

19.408

5.919

9.194

Belgium

8.697

8.697

Lithuania

6.716

6.716 6.548

United Kingdom New Zealand

1.691

Norway

1.497

Others/unknown

1.170

Total

56.664

6.548 1.691 1.497 191.000

452.168

727.073

200.000

191.000

192.170 19.000

1.645.905

Table 1: Origin of biomass for generating power in the Netherlands. • Source: SOMO

to specify in more detail rather general concepts such as ‘wood pellets’ and ‘wood chips’ by stating the type of wood that is used. According to SOMO this is important information and SOMO therefore wonders whether the power generators are being somewhat casual about complying with the international guidelines for supply chain transparency and responsibility. CARBON EMISSIONS

According to the authors of the report it is important to show as much openness as possible about the origin of

DELTA: ‘AN ERROR OF JUDGEMENT’

According to company spokesperson Manon Ostendorf, Delta did not cooperate in the investigation because of an error of judgement. ‘We would have liked to collaborate in the investigation. The colleague who received the e-mail suspected that SOMO wanted to conduct a commercial survey and was asking for our cooperation in it. We have meanwhile altered the internal process and seen to it that participation in comparable requests in the future will be considered in a proper fashion by the right people.’ Delta also said it was not expecting to purchase biomass from developing countries.

50

Europoort Kringen • Review 2013

the biomass. After all, the biomass is used to generate power in order to achieve sustainability targets. If it emerges, however, that the biomass being used for this is being produced in a non-sustainable way, employing this source could in fact result in an increase in CO2 emissions. Furthermore, environmental damage and violations of human rights cannot currently be excluded. Environmental organisations including Greenpeace maintain that complete trees and even whole areas of forest are being felled in order to be utilised in the energy sector. There is a risk of problems because developing countries in Latin America and Africa are supplying more and more biomass to Europe. In these countries there is usually a lack of satisfactory regulation and enforcement. A growing biomass industry has positive consequences, of course, such as more employment, better access to renewable energy and lower carbon emissions. There is as danger, however, that governments will look on natural forests in their countries as a source for a flourishing business. The two deliveries of biomass from Brazil (seven hundred tonnes) and Ghana (four hundred tonnes) to the Netherlands are a portent that these countries are emerging as suppliers. According to SOMO it is an indication that these wood pellets were tested for possible larger deliveries in the future. <<


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Europoort Kringen Review 2013