Europe’s largest port, Rotterdam, is grappling with a dilemma of whether to continue its strong dependence on fossil fuels or to aggressively pursue a transition to renewables.
Tim de Knegt, manager, strategic finance and treasury at the Port of Rotterdam, told attendees at the IPE Real Assets Infrastructure & Natural Capital Global Conference in Rotterdam this week, that the port, once the world’s largest, is home to five oil refineries and has Europe’s largest fossil-fuel storage capacity. It also serves as a major hub for transferring commodities for Europe’s declining industrial base.
The port now faces the question of whether to continue to support ‘old economy’ fossil fuel activities or to speed up the switch to renewables which could cost jobs in the short term but would improve the port’s competitiveness in the future. “Do we want to be aggressive on from an ecological standpoint or choose to be the last man standing in fossil fuels? This is not an easy topic and there are conflicting views about this,” he said.
The port has faced major setbacks on both fronts this year. Several chemical factories closed their doors after rising energy costs, while renewable energy investments have been scaled back or are facing long delays.
Foreign ownership
“One of the major upsides of the port was always its collaborative nature,” said de Knegt. “But now most facilities in the harbour are part of multinational corporations that have little interest in what happens locally in Rotterdam.”
Dutch financial daily Het Financieele Dagblad, part of the same company as IPE, recently calculated that 80% of Rotterdam’s port facilities are operated by foreign players. This makes it harder to secure investments to power the energy transition, de Knegt acknowledged.
The port of Rotterdam has ambitious plans to become Europe’s largest hub for green hydrogen which is to be produced with wind energy generated on the North Sea. “There is no space to bring 25GW of electricity to the hinterland of the port. That’s why we have to convert into hydrogen first,” de Knegt explained.
Shell is currently building a first hydrogen conversion plant in the port of Rotterdam with a 200MW capacity, but more investments are needed.
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