North Sea Port promotes European cooperation with annual conference

Cas König, who has been at the helm of North Sea Port as CEO for more than a year, is speaking. He is working to further improve the port’s sustainability and strengthen its economy. “In recent years, energy security and sustainability have moved increasingly higher up the agenda. Industry in particular faces a major challenge. As a port, we play an important role in energy infrastructure, production, supply and transit. Thanks to our strategic location on the North Sea, where deep-draught vessels can berth, offshore wind farms can come ashore, and where we have onshore wind and solar farms, several major battery projects and power plants, we are an important energy hub. We supply energy to companies in our port, as well as further afield in Europe, including the Ruhr region and Chemelot. Hydrogen plays an important role here as part of the broader energy mix and raw materials transition.”

Making a difference

This year’s conference is themed “Making a difference for industry and society.” Why this theme? König explains: “The public image of industry does not reflect the efforts being made today in the fields of the energy transition and sustainability. Yet we need industry in our society to remain resilient, independent and competitive. Innovation, infrastructure development and international competition are also major challenges. In addition, cooperation with companies and governments remains essential for the port’s continued growth, at regional, national and international level. That is why it is important to meet and talk to one another.”

A shared challenge

“We need to become more sustainable,” König continues. “This is a challenge we all face together. Hydrogen is part of the transition, particularly for industries that are difficult to electrify, for transport and as a building block for new products. That is why it is an important part of our plans and vision for the future. In fact, with annual production and consumption of 600 kilotonnes, we are the largest hydrogen cluster in the Benelux. Establishing a hydrogen value chain is not something you can do alone. You need importers, producers, transport, off-takers and infrastructure. We are working on the infrastructure in the port and on connecting the partners required.”

Ninth-largest port

North Sea Port is, unjustly, somewhat less well known to the general public. As the ninth-largest seaport, it is one of Europe’s most important ports in terms of seaborne throughput. More importantly, it is Europe’s third-largest port in terms of added value, in other words, employment and wealth creation. As a cross-border port, since the merger on January 1, 2018, it stretches for 60 kilometres from Vlissingen in the Netherlands on the North Sea, through Terneuzen, to Ghent in Belgium, 32 kilometres inland. North Sea Port therefore covers approximately 9,100 hectares. The port is home to 550 companies, which together provide 106,000 direct and indirect jobs.

Energy hub

“What makes North Sea Port special is that we are an energy hub,” confirms programme manager Charlotte Herman. “Because of our location in the Netherlands and Belgium, we have access to the hydrogen and CO2 infrastructure of both countries. And because we are located on the coast, close to major wind farms, we can transport substantial volumes of energy.”

The ambitions are high. North Sea Port aims to grow sustainably to 1.2 million tonnes of hydrogen. It is switching from natural gas to green and low-carbon hydrogen. There is every reason, therefore, to organise an annual conference on this subject. König says: “We want to create a robust energy system together.”

Business case

“The difficulty with hydrogen lies in demand, which is currently lagging behind,” he continues. “It is difficult to build a viable business case. We expected the price of hydrogen to have fallen by now as a result of economies of scale. But because other costs, such as electricity prices, have risen, that has not happened. Progress is slow. The permitting process and the lack of off-takers are currently creating particular difficulties for investors.”

“Together with the network operators, we are providing the infrastructure. Politics must then establish the framework conditions that allow demand to grow,” Herman explains. “Completing the business case is a long-running chicken-and-egg discussion.”

König adds: “The port can be the warm nest where this chicken-and-egg discussion comes to an end.”

European framework

European regulations and framework conditions play an important role here. König says: “If, for example, Brussels decides that only steel processed using green, sustainable energy may be used in cars, companies will have to change. They can then pass on the limited increase in costs to their customers, and it will not create unfair competition. However, government direction is needed to get this properly off the ground.”

Thinking European

“We need to think European, because value chains are often organised at European level, while new markets such as hydrogen, CCS and alternative molecules need scale in order to create a positive business case,” says Herman. “As a Dutch-Belgian port, North Sea Port is accustomed to looking beyond national borders. I want to urge politicians to recognise that European thinking is essential for the energy transition. This will enable well-considered system integration and allow us to retain our industries in Belgium, the Netherlands and, more broadly, across Europe. It is not only about supplying the port itself and established companies with energy, but also about supplying industries in the hinterland.”

“In that respect, I do not envy those companies,” König adds. “The opportunities here are substantial. Further inland, you depend on other parties for sustainable energy.”

Growing pains

“The government is not solely responsible, however. Companies must also have the courage to take risks. And they are doing so,” Herman qualifies. “The market is experiencing growing pains, as every innovative market does. At first, there were golden promises, but now there is a greater sense of realism. Yes, projects have been cancelled or delayed as a result of developments, but serious projects are continuing. That demonstrates the complexity of these developments. We must all continue to press ahead and persevere wherever hydrogen is most useful. Because we have to do this together, progress can sometimes be slower. But ultimately, that is how we move forward and become more resilient.”

Advocates

Ports such as North Sea Port, the Port of Rotterdam, the Port of Antwerp-Bruges, the Port of Amsterdam and Groningen Seaports are joining forces to spread the message.

“We are competitors and advocates at the same time, and we need one another,” says Herman. “For example, we need each other to communicate the message and in areas such as standardising processes, including bunkering. Change is needed at system level, along with a significant increase in scale. It is an all-of-the-above approach in which molecules exist alongside electrons. At the same time, every port is unique and we each have our own strengths.”

König adds: “Because we occupy a somewhat more independent position, we can communicate the message more effectively than, for example, off-takers located further away from the port. Of course, we also have an interest in this, because the hydrogen pipelines run through the port.”

Hydrogen

“Nederland Waterstofland is also helping,” the CEO says. “Nederland Waterstofland has increased public awareness that hydrogen is part of the solution to the energy transition. I think that is a positive development. It is now focusing more on regulation and framework conditions, and therefore on reaching policymakers.”

Believer

König is convinced that North Sea Port can achieve its ambitions. “We will continue to persevere. We believe in hydrogen. A Contract for Difference, or CfD, could help in this regard.”

This financial agreement sets out how the supplier and off-taker settle the difference in the price of hydrogen between the time of purchase and the time of sale. “And we know it can be done. A good example is Neste’s refinery in Rotterdam. Within the North Sea Port area itself, we also have a strong portfolio of production and import projects, including Zeeland Refinery, LCB Tank Terminals, VESTA, H2BE and VOLTH2, to name just a few.

“Moreover, we have seen in the past that regulation also played an important role in the development and expansion of offshore wind. Before long, hydrogen will be just as commonplace as wind farms on the horizon.”

“We need to think and act across borders to accelerate the energy transition.”