Scaling up biobased industry stalls due to missing infrastructure

The chemical industry in the Netherlands is undergoing a major transition from fossil to renewable and biobased raw materials. This must counter environmental pollution and work toward a circular economy.

Yet this transition is getting off the ground with difficulty. Especially the step from test installation to an actual factory is hardly taken. The Netherlands is good at laboratories, pilots, and demos, but after that, scaling up to a first factory stalls due to a lack of biobased infrastructure.

Regulations, permits, the end-of-waste status, and nitrogen space also make it difficult. Waste is still too often seen as a residual product, while it can also be a valuable raw material. Government and companies must change this mindset in order to make use of circular opportunities.

At the same time, the existing fossil industry must be converted to make room for alternatives. The process is urgent because European rules such as the Packaging and Packaging Waste Regulation and Circular Economy Act oblige companies to become sustainable quickly. From 2030 onward, thirty percent of all plastics must consist of biobased or recycled material. Without scaling up, these goals threaten to become unattainable.

Financing

Financing forms a second bottleneck. New factories are capital-intensive and banks often estimate the risks too highly. They are afraid to invest in a factory that will not be profitable over the next 10 years. Invest-NL works with guarantees and risk-sharing to make financing possible.

Shared facilities can help startups grow faster, without first having to build a full factory. They offer cost-effective access to expertise and equipment, though large companies are reluctant due to competition-sensitive information and safety requirements.

Meanwhile, the traditional chemical sector is under pressure due to high energy prices and competition from China. If factories close, crucial infrastructure for the biobased industry disappears. Without pipelines, energy and water supply, scaling up becomes even more difficult. The Netherlands must quickly invest in biobased infrastructure, chain cooperation and policy aimed at market creation, otherwise it risks falling behind other European countries.