Position, Situation and Requirements Paper

TRILATERAL STRATEGY FOR THE CHEMICAL INDUSTRY WORKING GROUP ON INFRASTRUCTURE

20.02.2019 by Working Group on Infrastructure GERD DEIMEL, C2I, CHAIR Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Content

PART I Introduction

1. The Trilateral Strategy for the Chemical Industry in the Flemish region, the and North Rhine Westphalia

2. Prognos-Analysis: Trilateral Chemical Infrastructure – main findings

3. Working Group on Infrastructure in the Trilateral Region

What was the approach with regard to this paper?

Framework Conditions

PART II Food for Thought

1. Ideas on Interconnectivity - Logistics, Multimodal Transport and Infrastructure

a. Intermodality

b. Horizontal aspects

c. Road

d. Rail

e. Waterway

2. Two infrastructure priority topics for the trilateral region in detail

a. Logistical access to feedstock / pipelines

b. Initiate and facilitate data exchange and digitalization

PART III The Way Ahead

1. Key Conclusions

2. Closing Statement

PART IV Annex

1 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

PART I Introduction

1. The Trilateral Strategy for the Chemical Industry in the Flemish region, the Netherlands and North Rhine Westphalia

As one of the largest sectors globally, the chemical industry is a key supplier for numerous sectors of the economy, providing innovative solutions to today’s economic and environmental challenges.

The chemical industry also faces some fundamental challenges if it is to prosper and grow. The global competitive environment is changing drastically and the European chemical industry is facing strong headwinds from several competing regions, particularly China, India, Saudi Arabia and the US, leading to a slower projected growth through 2030.

Responding to these challenges and preparing for the future, the Flemish region, the Netherlands, and the federal state of North Rhine Westphalia presented a joint Trilateral Strategy “TRILOG” for the Chemical Industry in September 2017 containing in total 21 measures over three vertical policy fields and several options for concrete steps and actions to support a future growth of this flagship industry.

The three policy fields are

(1) Research and Innovation (2) Energy and Feedstocks (3) Trilateral Chemical Infrastructure

Each policy field is being followed-up in working groups under the TRILOG umbrella under the auspices of a lead region. The Netherlands in the case of “Research and Innovation”, Flanders for “Energy and Feedstocks” and North Rhine-Westphalia for “Trilateral Chemical Infrastructure”.

The start of the Strategy was supported by a Prognos study called “Trilateral strategy for the chemical industry. Striving to become the world’s engine for the transition towards a sustainable and competitive chemical industry cluster in 2030”1. It focuses on the mentioned policy fields. References to pages and figures below refer to this document.

The Prognos study was based on interviews with experts from companies located in the trilateral region.

1 https://www.wirtschaft.nrw/sites/default/files/asset/document/trilateral_strategy_chemical_industry.pdf

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2. Prognos-Analysis: Trilateral Chemical Infrastructure – main findings

Resilient infrastructure is increasingly becoming a key component of competitiveness for the transport intensive chemical industry. This is one of the key results of the interviews with experts conducted by Prognos. A reliable infrastructure will be even more important in the future, as Prognos expects heavy increases in transport volumes over the next years for in- and outbound volumes.

Forecasts for the future annual transport volumes in the region indicate a significant increase of almost 30% through 2030 for all transport modes, excluding pipelines. Approximately half of this annual growth is generated by the major seaports of Antwerp and Rotterdam.

A trend of increasing volumes (for in- and outbound) being transported by more flexible modes of transport is also reflected in the 2030 forecast when differentiated by transport mode.

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Prognos has identified a number of important predetermined drivers as well as uncertainties and weaknesses for the development of the trilateral chemical industry. Some of them, such as the development of feedstock prices in other world regions, have a high impact on the chemical industry in the trilateral region, however, they are beyond its control.

Therefore, it is in Prognos’ view important to prepare for the trends, drivers and uncertainties that have a high impact and that are within in the influence of actors in the trilateral region.

With regard to predetermined drivers that will shape the development of the trilateral chemical infrastructure Prognos has identified the following during their interviews and study (Figure 22 partly):

• Security and volatility of supply are issues that must be tackled by further investments in (energy / feedstock) infrastructure • The trend towards smaller volumes of more sophisticated products is also reflected in the freight traffic trends • On the input side, energy and resource efficiency will be increased by capturing industrial symbiosis opportunities (e.g. CO2 or heat exchange)

In addition to that huge expected increases of transport volumes towards / from ports and changes in the modal split to reach the climate targets will be key variables for stakeholders dealing with transport issues.

When it comes to uncertainties Prognos lists the following factors (Figure 23):

Digitization / modularization & distributed production • Big data analysis and data mining (real-time monitoring and optimization of production processes) • Flexibilization and modularization of production, e.g. through connected container-sized production units

Renewable feedstocks / Bio-based chemicals • Present unknowns: sufficient availability, supply logistics, unclear environmental aspects of products, state regulation, development of fossil feedstocks prices

Finally, Prognos and the interviewed companies identified amongst others the following weaknesses of the trilateral chemical industry (Table 4): • Difficult planning and approval of infrastructure projects (‘not in my backyard mentality’) • Need for more policy co-ordination in infrastructure policy • Lack of long-term funding

Factors, drivers and trends such as these shape the global competitive environment of the chemical industry. Preparing to meet these challenges is of utmost importance to sustain the competitiveness of the chemical industry in the trilateral region. In a volatile global environment fast and smart reactions to unexpected changes will remain pivotal.

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In the strategy, three key strategic objectives with two concrete proposed measures each are identified for the trilateral chemical infrastructure (#):

1. Increase the resilience of the trilateral transportation infrastructure through coordinated planning involving the relevant stakeholders. • #13 Develop a trilateral masterplan for chemical logistics and infrastructure • #14 Accelerate approval processes of infrastructure and construction projects

2. Upgrade logistics to the next level by capitalizing on the opportunities of digitization towards Logistics 4.0 • #15 Initiate a trilateral telematics system of transport and logistics undertakings

• #16 Establish a trilateral dialogue platform for Logistics 4.0

3. Enable future investments in the trilateral region (which is strongly based on the “Verbund” structure, i.e. the tight physical integration of chemical plants in the trilateral cluster) by reserving sufficient space for key infrastructures. • #17 Plan and reserve space around chemical industry locations • #18 Plan and reserve space for new pipelines and speed up the permitting process

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3. Working Group on Infrastructure in the Trilateral Region

The kickoff meeting of the trilateral working group on infrastructure took place on Dec 1st 2017 at the invitation of North Rhine Westphalia. As a follow-up to the kickoff meeting three priority topics in the field of infrastructure were identified in a survey conducted among participating companies: • Logistical access to feedstock / pipelines • Telematics / data exchange

• Interconnectivity After a strategy meeting in April 2018 the priority topics were assigned to the three chemical industry association in the trilateral region VCI NRW (North Rhine Westphalia), VNCI (Netherlands) and essenscia Vlaanderen (Flanders) with the aim of producing a draft position, situation and requirement paper focusing on the three priorities. In a second step this draft was the basis for discussions in a workshop with companies in September 2018. At the workshop the participants discussed, amended and approved the paper. Due to the sheer size and range of project ideas in chapter II of this paper it was decided to reduce the list to a manageable size, undertaking a prioritization exercise. The exercise to draft a “priority action list” was performed by a small team with representatives from Covestro, essenscia, the Port of Rotterdam, VCI NRW and VIL. After the approval by the entire working group the “priority action list” is a starting point for an agreement on next concrete steps undertaken by companies, chemical industry associations and – depending on the individual action – in collaboration with public authorities and relevant stakeholders such as logistics service providers. With regard to feedstock, a close coordination with the TRILOG working group on energy is advisable to avoid redundancies. The coordination will be safeguarded by regular meetings of the chairpersons of the three working groups in the trilateral strategy as provided for in the governance structure of the strategy. The whole process is coordinated by NRW for the trilateral chemical infrastructure part.

What was the approach with regard to this paper? Firstly, we are describing the framework conditions in the trilateral region when it comes to infrastructure. Secondly, we are concentrating on concrete proposals for projects and initiatives in the three priority areas with a clear cross-border benefit. Due to the broadness of the topic “interconnectivity” we decided to structure it in five sub categories and to draft it as an idea catalogue. Thirdly, we identified priority projects out of the “idea catalogue” (see separate “priority action list”). With regard to the topics “Logistical access to feedstock / pipelines” and “telematics / data exchange” we chose a case-study-approach analyzing them in a comprehensive manner and building on projects already carried out in the past. To be able to follow an open approach regarding the second topic – not restricting ourselves towards a specific option such as a trilateral telematics system – we chose to change the title to ‘Initiate and facilitate data exchange and digitalization’. Finally, we are developing demands to political decision makers.

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Framework Conditions The chemical industry in the trilateral region is strong. Its turnover reaches 180 billion Euro (17 % of the EU chemical industry) and it employs 350.000 people (11 % of the EU chemical industry). When we look at growth rates it is striking that the TRILOG region outperforms the rest of the EU (with the exception of pharmaceuticals). The chemical industry in the trilateral region was an anchor of stability during the recession following the financial crisis in 2009 and it is a key sector for future growth. Growth Rates 2010-2014 Europe (in %) TRILOG (in %) Chemical Industry -2.1 -0.3 Pharmaceutical Industry 2.4 -8.4 Rubber & Plastics Industry 1.6 4.1

(New) Growth in the chemical industry must not be prevented by crumbling infrastructure!

The urgency to improve the capacity and robustness of the infrastructure in the trilateral region is very well illustrated by the following snapshots of traffic congestions in the Netherlands (Rotterdam), Flanders (Antwerp) and North Rhine Westphalia (Duisburg).

Netherlands - Rotterdam (04.06.18, 08h30)

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Belgium - Antwerp (04.06.18, 08h30)

North Rhine Westphalia - Duisburg (04.06.18, 08h30)

We chose to highlight the traffic crisis in these three cities as they are among the main logistics hubs in the trilateral region. This illustration only focusses on traffic congestions on the road, while of course the other modes are affected as well, e.g. a particularly critical situation when it comes to waterways (barges) in the case of Rotterdam and Antwerp. Close cooperation is necessary to overcome the challenges that all three regions face. The Netherlands, Flanders and NRW can learn from each other and are able to bring their forces together to develop innovative solutions in the field of infrastructure jointly.

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The already existing long-standing infrastructure connections between the three regions as well as the concentration of industrial sites create potentials for synergies that have not been tapped yet. The entire region offers a unique composition of customer industries and markets, which is especially important for a cross-sector industry such as the chemical industry. To highlight the latter: 80 % of chemical products are being processed in a sector other than the chemical industry. This illustrates the significance of the chemical industry for the economy as a whole.

When it comes to logistics it is important to note that only appr. 25 % of the chemical industry are larger players. The sector is mainly composed of small and medium-sized enterprises. This leads to generally smaller transport units. As the need for bulk transports decreases, an increasing share of transports leaves the chemical production sites on the road. In addition to that, 'working capital' gained importance in logistics strategies after the crisis, therefore, smaller quantities are being ordered – with the respective consequences (surging amount of transports and additional bureaucratic obligations). These framework conditions are important to have in mind when developing an infrastructure strategy or concrete projects aimed at an improved interconnectivity for the trilateral region. Generally speaking it has to be our overarching ambition to think of infrastructure in a holistic manner including all transport modes and concentrating on optimizations of interlinkages. Silo approaches dealing with each transport mode individually are outdated. (Future) digital solutions give us the possibility to strive for the ideal delivery from A to B at each time of the day with a maximum of flexibility concerning the exact route and mode.

We need to improve and sustain the robustness and capacity of the transport infrastructure in the trilateral region

• by thinking and acting in supply chain networks to use existing capacities in the best possible way,

• by involving a new 100% EU funding (to establish) to modernize and improve the cross- border infrastructure in the trilateral region to the benefit also of the larger European transport network,

• by following a long-term approach when it comes to continuing funding and controlling processes,

• by defining priorities according to the need for overhaul, traffic volume and economic potential,

• by creating bypasses to avoid crisis situations such as in Rastatt that lead to a blockade of entire transport corridors.

To implement such a holistic approach and to efficiently use the financial means available this approach has to be accompanied by ……a coordinated campaign for skilled workers in construction and infrastructure authorities according to comparable standards to allow for cross-border assignments in the trilateral region …by a genuine effort for a simplification, harmonization and acceleration of planning processes.

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…projects that follow clear priorities to reduce bottlenecks and to support the EU climate goals instead of being triggered by particularistic interests.

…a thorough monitoring process of the implementation of projects, e.g. by installing a controlling entity for that purpose in each region and linking those controlling entities in the case of cross- border transport corridors – in that case the definition of common monitoring criteria is highly advisable. …a focus on and an incentivization of multi modal transport concepts against the background of the Paris climate targets, which means that especially the long-neglected modes waterway and rail transport need to be promoted. …additional nodes to link the different modes in a more efficient way and to simplify the shift to multi modal transport solutions for the chemical and pharmaceutical industry.

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PART II Food for Thought 1. Ideas on Interconnectivity - Logistics, Multimodal Transport and Infrastructure a) Intermodality

• against the background of the climate targets the ambition should be to balance out the modal split road-rail-waterway, which currently stands at 55 % / 30 % / 15 % to move towards 40 % / 35 % / 25 % by 2030; pipelines should be recognized as an increasingly important additional mode (see chapter II 2. a.)

• more efforts need to go into the development of intelligent transshipment solutions and technologies to enable an easier cargo handling (such as 'Rail Runner' etc.) using less space for transport mode changes compared to existing modal hubs for road to rail and rail to road • development of autonomous transport solutions and, in a second step, concepts of automated mode switches triggered by the requested delivery time, the kind of product and the accepted transport total cost of ownership (TCO) and total time of ownership (TTO) by the customer; consideration of social consequences of autonomous truck driving; the development of autonomous transport solutions should also cover the loading / unloading and storage of goods in warehouses and terminals - this goes for all three transport modes (rail, barge and road)

• in the case of multi modal transport, tax incentives should be aligned for bulk and packaged goods across all transport modes; today e.g. in tax incentives are only in place for packaged goods to increase the usage • there is a need to incentivize and to speed up the transition to multi modal transport by ◦ introducing a right for 24/7 multi modal transportmaking multi modal transport more cost efficient – even on short distances (e.g. reduction of transshipment costs); ◦ analyzing the feasibility of an increase of load for multi modal transport to 46 tons • construction of multi modal terminals located in the Hinterland collecting and sorting all oversea shiploads and managing a synchronized delivery to the port to use the rare storage facilities at the port more efficiently

• With regard to inbound and outbound we are facing an increase in tank and box container per order w/o enough storage possibilities throughout the supply chain. Therefore, transport and storage for in- and outbound must be looked at together during the infrastructure planning in Europe. • transports with an exclusive transit purpose should obligatorily be handled via rail or waterway (supplier / customer locations close to a waterway should get easy access to barge transports)

11 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper b) Horizontal aspects

• campaign for skilled workers in collaboration with universities, technical schools active in public construction • cross-border connection and linkage of transport and infrastructure R&D activities in the trilateral region and start of regular best practice exchanges and congresses between universities and institutes

• development of new construction materials and quick repair products - best practice approaches • cross-border approach to systematically involve the public in infrastructure projects (such as the ‘Bündnis für Mobilität’ in NRW) • cross-border study to explore expectations of citizens regarding future mobility and infrastructure solutions

• harmonization of truck check in/out procedures → real time planning of truck loading • standardization, modularization of infrastructure buildings (bridges, terminals, sluices) to reduce planning and delivery time, to enable continuous improvement and to use prebuilding techniques via modules more efficiently and, thus, to reducing the construction time and negative consequences for individual and freight traffic; harmonization of permission regulations • solar powered LED highway striping with guidance functionality (e.g. highlighting alternative routes) • bridges with heat-resistant substructure to prevent total blockade of transport routes due to fire damages

• priority areas for logistics, ChemParks and transport routes alongside a dedicated “Trilateral Region Transport Network (TRTN)” to avoid conflicts against the backdrop of urbanization trends complementing or expanding the TEN-T corridors • commissioned individuals for logistics with a respective professional background and know- how in public authorities alongside “TRTN” as contact persons for infrastructure and logistics projects and as liaison officers for requests from citizens, companies and public authorities • financial support for initiatives to avoid no-load transports through collaborations

• setting up of additional facilities for special transports (such as heating / cooling systems) • reform of EU funding regarding infrastructure by strengthening the incentives for climate friendly transport (reduction of share of private investors up to 100% funding to accelerate the toughening up of the infrastructure) • development of new funding instruments (public private partnerships; federal infrastructure ‘notes‘)

• promotion of eMobility in ChemParks to install a low-emission vehicle fleet; consideration of the needed charging infrastructure • reduction of unnecessary bureaucracy and establishment of digital solutions in logistics processes

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A look at the Transport Modes: Road – Rail – Waterway

c) Road

• set-up of a cross-border road construction management to avoid traffic jams; construction projects on routes with trans-regional importance need to be aligned by the building authorities; well-suited alternative routes need to be designated and communicated in due time • by means of steadying a sufficient level of investments the maintenance of infrastructure needs to be ensured permanently and across borders – this way a renewed backlog of renovation needs and economic ill-effects through costlier repair needs or closures due to the necessity of a new construction can be avoided (source: UECC resolution on connecting functions of Rhine bridges, March 2018) • replacement constructions without comprehensive planning approval processes as the need of the infrastructure project is evident in this case • pilot routes for truck platooning between ChemParks and ports to increase safety and efficiency (see for example the SmartPort project on truck platooning in the Netherlands) – a precondition is a EU wide future proof 5G digital infrastructure alongside transport routes and harmonized data, safety, and insurance requirements

• analysis of the feasibility and the potential of exclusive truck zones on highways or dedicated time slots for truck transports to increase safety and efficiency • to reduce risks of severe accidents potentially in combination with high consequential damages due to the leakage of hazardous materials there should not be an option to switch- off in-vehicle sensor technology (distance control etc.) • awareness raising of truck tire labelling – efficient tires as a standard to reduce fuel consumption and emissions

• harmonized driving time and rest period regulations • analysis on whether driving bans on Sundays and during holidays still fit todays' requirements; potential for a more balanced distribution of available capacity • trucks should only be allowed to use a maximum of two lanes on highways at all times for passing manoeuvres (supported by monitoring through toll bridges) for the benefit of individual transports and to reduce accidents caused by speed differences of truck and individual transport • truck driver recruitment and image campaign to counter lack of qualified drivers (improvement of occupational image, training and development, increase the percentage of women etc.)

• alternative fuels and drives for trucks (e.g. trolley trucks, hybrid, fuel cell, development of drop&swap batteries); test routes to ChemParks and ports regarding refueling concepts • long truck usage needs to be admitted in the trilateral region to enable long distance hinterland transports with reduced emissions

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• harmonization and increase of gross vehicle weight (to the highest load currently allowed in the trilateral region) for vehicles in road and inter modal traffic • secured truck parking spaces on highways to prevent theft and misuse (fencing, camera surveillance, security personnel); need for cross regional capacity planning incl. funding concepts

• EU wide harmonization of toll systems • a smart utilization of capacities is necessary to reduce the waiting times for truck drivers; that includes ◦ the intensification of cooperation in ports and terminals ◦ improved supply chain cooperation ◦ making full use of digital solutions / data exchange ◦ more flexibility regarding the usable time window (e.g. night (un)loading)

d) Rail

• campaign for a 100% funding of railway sidings to enable door to door railway transports and thus to avoid high reloading expenses which hampers the shift to rail transport

• campaign for a harmonized 740 m rail network, P400 structure gauge and increased weight allowance (→ acceleration of implementing the TEN-T corridor parameters) • 100 % electrification of main lines (including alternative and ancillary routes and across borders), continuous upgrade to two-tracks and fully equipped with ETCS; harmonization of safety and signaling systems; TEN-T criteria for the comprehensive network • one railway process language

• one unique European railway driver’s license • KPI based measured performance of railway transports for the entire region to identify weaknesses in the supply chain • assessment of the feasibility of a separation of tracks for freight and passenger transport on selected main and alternative routes

• making rail transport more reliable, e.g. by introducing buffers in terminals to allow for a more flexible handling of dangerous goods • establishment of the mind set to actively think about freight transport lanes when planning new constructions of passenger rail routes • anti-noise campaign using noise protection laboratories such as the one operated by DB in Berlin to demonstrate the effectiveness of modern noise protection technologies

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• continuous development and installation of cross country used low noise brakes, also disc brakes and new rail and freight car vibration dampers • efforts to harmonize technical specifications of noise barriers (e.g. common distance of emergency exits)

• develop and establish routes for autonomous driving beginning with track sections with transports of high repetition rates → creation of a legislative framework • installation of automatic couplings by-default and harmonization across the European Union accelerated connection of the Betuwe line on the German side (third track) • construction of a bypass to the Betuwe line to avoid crisis situations such as witnessed in Rastatt, which created economical costs for freight transport and industry of more than 2 billion Euro; more than 8.000 freight trains were affected and additional 39.000 tons of CO2 were emitted due to detours and a forced shift to road transport • Inclusion of the 3RX project in TEN-T corridor definition ◦ covering the costs for the 3RX project (770 million Euro) mainly by EU funding instruments would be a solution to a situation where the share of the financial burden is unequally distributed between the three participating regions ◦ 3RX has the potential to realize savings of 1.6 million Euro annually per train round trip ◦ amortization of the 3 RX project is expected in 14 years when calculating with 32 train round trips per day

• freight trains in regular service (‚Network-Plan Railfreight‘) with fixed KPIs

e) Waterway

• optimization of “deepening” processes at Niederrhein and Mittelrhein need to gain highest priority ◦ poss. joint trilateral PR campaign ◦ „sharing“ of skilled personnel from Germany, the Netherlands and Flanders (‚resource network infrastructure‘) so that construction projects to the benefit of the entire trilateral region can be implemented swiftly according to pre-defined priorities • campaign for bridge elevation in the Netherlands, Flanders and Germany (harmonized clearance height for multilayer container transport) realizing a balanced mix when it comes to vessel sizes to have different ship sizes available in low water level seasons and for routes with small sluices dynamic pre-set sequence control system with automatic speed adjustment / implementation of digital solutions with respect to (un)loading procedures and locking operations • campaign for a shift of goods transport to waterway transport (use of best practice in the Netherlands and Flanders)

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• promotion of barges with electric or fuel cell drive and development of the respective charging infrastructure in ports

• promotion of development of solar and wind energy based electric drives on barges • the feasibility of a waterway (navigable partial current canal) between Düsseldorf / Neuss and the Albert Canal in via Aachen and (120 km) with a possible connection to the Canal network in northern France was explored in the mid-80’s for the first time; back then cost-benefit considerations were negative; due to huge increases in transport volumes and a need for a shift to low-emission modes a reassessment should be considered and a feasibility study should be commissioned; esteemed cost: 8 billion Euro ◦ Relief of rail and road regarding emission protection through waterway use between the Rhine region, the Hinterland and the ZARA ports. ◦ Opportunities for improved regional development alongside the waterway, in particular with regard to logistics and tourism (according to an estimate potentially 100.000 new jobs) ◦ reduction of risk potential for local residents and infrastructure through increased flood protection by systematically integrating the canal in the flood protection management programs ◦ realization of the project in line with environmental protection and social security policy goals and protection of the cultural heritage ◦ Opportunities for synergies with water management obligations following the run-out of lignite opencast mining in the region

Source: HWS Feldmann 2016

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2. Two infrastructure priority topics for the trilateral region in detail a) Logistical access to feedstock / pipelines2

The case of this chapter A lack of space for pipelines threatens to weaken the competitive position of the Ruhr Region and Rhine Area, Rotterdam- and Antwerp chemical clusters. Ultimately this may have consequences for competitiveness and employment in this region. A better logistical connection of the refinery and chemical sites, especially in the hinterland, is a prerequisite for ensuring the competitiveness of the entire cluster in the long term. The business community therefore considers it important for the authorities in North Rhine- Westphalia, Belgium and the Netherlands to reach agreement with one another to ensure that the space is made available for the construction and maintenance of pipelines. This position is substantiated in more detail below.

Pipelines keep North-West Europe chemicals clusters alive and play a role in the energy transition In Europe the areas of Antwerp, Rotterdam and the Ruhr Region and Rhine Area form the heart of the European basic, energy intensive chemical industry. While each (sub)cluster (e.g. Chemelot, ChemCologne, Antwerp, Rotterdam, Ludwigshafen) is an entity on its own, the strength of this mega- cluster ARRR3 lies above all in the excellent hinterland connections between the Ruhr Region and Rhine Area and the ports of Antwerp and Rotterdam and the closely interwoven activities. The chemical industry in connection with the two main ports Antwerp and Rotterdam are important for the economy and for employment. In 2015 the North-West Europe chemical cluster (NRW, BE, NL) accounted for 350.000 direct jobs and a turnover of EUR 180 billion The Ruhr Region and Rhine Area in particular is largely dependent on the raw materials brought in from the ports of Antwerp and Rotterdam. In addition, many intermediary products are exchanged between the chemicals plants in the three countries and further reprocessed. For this reason, the chemical plants in the three countries have to be considered a single cluster and together have a strong position on the world chemicals market. Although all forms of transport are important, transport via pipeline is the most important means for the North-West European chemical cluster. There have been major pipelines between Rotterdam and Antwerp and between Antwerp and the Ruhr Region and Rhine Area for many years (with branches to the ARRR’s satellites, see annex 1, 2 and 3).

2 Case study based on based on a joint vision of VCI, essenscia, VNCI, VNO-NCW, Port of Antwerp, Port of Rotterdam and the Velin, 2011.

3 In 2007, EPCA – the European Petrochemical Association – issued the report “A Paradigm Shift : Supply Chain Collaboration and Competition in and between Europe’s Chemical Clusters.” In this report Antwerp – Rotterdam – Ruhr was considered as 1 mega-cluster “ARRR.” The main (sub)clusters within ARRR include the port areas of Antwerp in Belgium, of Rotterdam in The Netherlands, and two major inland areas – Rhine/Ruhr in North Rhine-Westphalia (NRW) and the Ludwigshafen-Mannheim-Karlsruhe area. A number of “satellite” clusters are interconnected with these clusters. These include Terneuzen, / Sittard, Feluy and Frankfurt.

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A substantial share of all hazardous substances is carried via pipelines. Pipeline transport is characterised by the fact that Rotterdam and Antwerp mainly carry raw materials for the chemicals industry to the hinterland. The demand comes from the Ruhr Region and Rhine Area, the supply from Antwerp and Rotterdam. In addition, shipping along the Rhine accounts for a great deal of transport between both ports and the Ruhr Region and Rhine Area. Pipeline transport is expected to increase. The reasons for this is that: • Supplying goods via the Rhine is becoming less reliable owing to the increase in periods of low or high-water drainage. Access to the Ruhr Region and Rhine Area via this mode of transport cannot be guaranteed every year. • Transport by road or rail has to deal with congestion and stringent safety requirements and is a less favourable option for bulk chemicals. • The current flow of products between the various clusters will continue to exist. In addition to that additional movements will emerge due to the upcoming energy transition and the connected technological transitions, such as CO2 (CCS and CCU), hydrogen, LNG, LPG, methanol and the like. • Innovative developments in transport R&D might give an additional new impetus to pipeline transport (such as electrified rail bound piece good freight transport alongside underground pipelines connected to end distribution centers for the last mile (similar to Swiss project) to create new capacities, to reduce stop-and-go’s and emissions and to increase public acceptance of freight transport)

The close connection between activities results in great mutual dependence among the chemical plants in the three countries. It is therefore of great economic importance for North Rhine- Westphalia, Belgium and the Netherlands to ensure that this cluster operates as well as possible thanks to good connections, and the role of pipeline transport in particular. Moreover, transporting chemical substances via pipelines is also very safe and reliable in keeping nuisance and environmental pollution to a minimum.

Future of chemicals: optimisation and re-organisation The chemicals industry in Europe has registered moderate growth over the last 2 decades with a 3% output growth in 2017. The emphasis lies on optimising production; a prerequisite for which is to handle raw materials efficiently. Good mutual connections are essential to achieve optimisation and efficiency within the existing chemicals plants in the three countries. Pipelines offer the (petro) chemicals industry in Europe potential to achieve synergy. They help create incentives for investment and anchoring in the three countries. Moreover, a company can increase and optimise its capacity utilisation level thanks to a good and efficient pipeline network. In addition, a smooth supply of energy and feedstocks, e.g. natural gas, ethylene, or naphtha (and in the future likely CO2, hydrogen and methanol) by means of pipelines is a basic requirement for the (petro) chemical industry. In other words, pipelines would enable our industry to gain in competitive strength in a globalising world by being more cost-efficient. For instance, pipelines help reduce the structural disadvantages of the European industry compared with the Middle East (cheap feedstock), the USA (high level of olefin capacity connection per pipeline) and Asia (high economic growth). Furthermore, a strong, existing, local (petro) chemical industry, combined with the high capex of both the production installations as well as the pipelines, produces an anchoring effect.

If the heart of the European chemicals industry is to keep beating, the possibility of laying and maintaining pipelines must remain. This is important for the competitiveness and to keep the chemicals industry alive and to facilitate the energy transition. 18

Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Pipeline connections are also beneficial for ports

Pipelines are beneficial for the ports. Not only can these pipelines serve as excellent connections linking the ports to their hinterland. They also strengthen the existing chemical clusters increasing the local and European industry’s competitiveness. Furthermore, the local production units secure a flow of higher value (finished) products. These high added value products also need logistics services with a higher added value. Establishing a secure footing for this demand for logistics services with high added value is of course good for our ports.

Construction of new pipelines is a necessity

The business community has produced an appraisal of what is necessary to ensure that the petrochemical clusters of North-West Europe remain competitive. There are a number of substances for which pipelines are the preferred means of transport and for which connections between petrochemical clusters are essential. The expected transport requirements for these substances must be seen as a lower limit as regards the needs in terms of new pipelines over the next 20 years. History actually in fact shows us that new social developments such as climate change and the energy transition give rise to the need for pipeline transport for other substances. Think, for instance, of LNG, LPG or CO2, hydrogen and methanol. So, we cannot always predict which substances will have to be transported by pipeline. For some substances it is possible that several companies use one pipeline, while for other substances several pipelines will be laid. It is expected that over the next 20 years at least six to ten sets of pipelines will be needed between the clusters to establish this connection. The cluster connections (corridors) in question are as follows: - Rotterdam Region - Antwerp Region - Ruhr Region - Rhine Area - Antwerp – Zeeland – Rotterdam, - Rotterdam – Ruhr Region and Rhine Area - Antwerp – Ruhr Region – Rhine Area - from and to

In this scenario, the direct connection between Rotterdam, Antwerp and the Ruhr Region and Rhine Area is strengthened, creating a fully-fledged chemicals interchange that significantly reinforces demand and supply as well as mutual exchange. Currently there are several pipelines in north-south direction in NRW. But the connection westward into the ARA-region barely exists (see annex 5).

19 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Figure. The diagram below shows the current situation of pipeline connections of the north-west Europe chemical cluster ARRR. The business community has indicated the wish to further expand these connections alongside the existing axis.

Supplier Recipient Rotterdam Ruhr Region

Terneuzen

Geleen Antwerp

Supplier Rhine Area

The advantage of an adequate pipeline system is that this enables greater flexibility between supply and demand, which is beneficial for the competitive position of the chemicals cluster. For this reason, ideally companies should cooperate with one another and continue to invest in pipelines. This is good for the ports and industrial areas of Antwerp Rotterdam, and necessary for the vitality of the chemicals industry in the Ruhr Area.

Limited space for new pipelines There are already today a number of problem areas that pose a serious risk for the functioning and expansion of a pipeline system. The possibilities for laying new pipelines are noticeably diminishing. In Belgium, the Netherlands and NRW, urbanisation has increased to such a degree that there is little or no space left to plot new routes. This is a factor in these countries in particular for the port areas of Antwerp, Rotterdam and the Ruhr Region and the Rhine Area. Without vision and action on the part of the authorities, the remaining possibilities will also disappear. In this case the German chemical industry in particular will have to seek out alternative possibilities for organising efficient and competitive transport. This weakens the position of the chemicals sector in all three countries due to the interdependence of the clusters within ARRR! In addition to this, stringent external safety requirements applicable to pipelines and the need for land to satisfy various other interests such as housing, preservation of nature and the like are a factor in the Netherlands, which further reduces the available space for new pipelines, causing pressure on currently designated corridors for future pipelines.

20 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Shorten procedures At this moment it takes about 4 to 5 years (and even longer) from the start until the functioning of a new pipeline due to the permitting process. This time required constitutes a high hurdle for the decision to invest in new pipelines. An important precaution to realize the whole economic potential which new pipeline traces give to the chemical value chain is that the timeframe from the application to the initial operation should be shortened to a maximum of 24 months. In other words, shorten the permitting process will stimulate the economy and enhance the competition of the Western European chemical industry.

What must be done? The message from the business community to the authorities in all three countries is the following: make sure that the hinterland remains accessible by means of pipelines. The three countries should be proactive and develop a common vision of pipeline transport. In our views the most important aspects are:

• To consider pipelines as a fully recognised mode of transport alongside road, rail and water. Pipelines (within clusters and between clusters) are, on the long term, crucial for the further development of the North West European chemical cluster and in order to stay competitive. • To designate (in a national spatial planning scheme) corridors for developing new and maintaining those of existing pipelines – this has to include the rights of way or the possibility to expropriate. To be effective those corridors must be covered by proper legislation. The advantages of such a corridor are numerous: shortened permitting procedures, no uncertainties regarding the rights of way and shortened time till starting the operation of new pipelines, clarity in spatial planning, enhance safety etc (see annex 4). • To agree on border crossing points where the corridors of Germany, Belgium and the Netherlands will meet (see annex 4). • To shorten procedures for legally requirements for laying new pipelines till a maximum of 24 months. The next elements can be taken into account in this issue: - The possibility of laying and maintaining pipelines and therefore the assurance of spatial possibilities and removing physical obstacles; - Clear view on crossing quiet areas and offsetting the effects on nature; - Reasonable external safety policy; - Reasonableness in terms of EIA

The business community is prepared to play an active role in this.

The business community in the Netherlands, Belgium and North Rhine-Westphalia calls upon the authorities and businesses to join forces and devise a plan to reinforce and maintain pipeline transport between the chemical clusters by designating corridors and by shortening the timeframes of permitting.

21 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Recommendations

The business community would like to make the following recommendations.

• The authorities should recognize pipelines as a fully-fledged alternative mode of transport. • The authorities and the business community in the three countries should acknowledge the mutual dependence of the chemical clusters and plants as well as the vital need for good connections between the three countries. This has the crucial effect on the competitiveness of the chemical industry and employment in North-West Europe. • The authorities should devise a vision for the transport of chemical substances via pipeline, including the spatial consequences and also including appropriate legislation to protect designated pipeline corridors. It is important that the visions of the authorities in the Netherlands, Belgium and North Rhine-Westphalia are aligned with one another. • The authorities in the three regions should reach agreement with one another on the permanent nature of future transport connections for the chemical’s plants, clusters and ports. The authority should create certainty for the laying and maintenance of new pipelines with a view to reinforcing the competitive position of the chemicals sector in North-West Europe and the ports of Antwerp and Rotterdam. • The authorities should elaborate above mentioned points by designating corridors for laying pipelines, agreeing on cross border points and shorten the procedure for permitting and realizing new pipelines. • A meeting should be set up with relevant stakeholders to get a better understanding of the issue, to get a more detailed idea and quantifiable prognosis on future needs, to identify further questions and to discuss the way ahead.

Excursion ‘Infrastructure for sustainable energy supply’: Many obstacles that are linked to the development of a modern and future-proof pipeline network in the trilateral region are similar with regard to the further development of infrastructure for sustainable energy. With the signing of the Paris agreement and the related targets for CO2-reduction, chemical industry will have to rethink both its current fossil raw materials and its fossil energy carriers. As a result both new processes and new infrastructure will have to be developed. The infrastructure will be geared towards the supply of energy from renewable sources, as well as for discharge/supply of CO2. The use of wind parks and solar parks for electricity generation will give both spatial zoning challenges for their placement, as well as for the related infrastructure to the users. System choices with regards to hydrogen pipelines and/or direct current supply lines still have to be made. As the building of infrastructure is a long term process, but crucial for the success of the energy transition in the chemical industry, we advise to start tri-lateral discussions on an international sustainable energy infrastructure. In this discussion relevant network operators should be included.

A close interaction between the authorities of the three regions is vital in the context of a European energy market that is characterized by increasing volatility. Cross-border cooperation is essential to ensure the security of supply. This goes particularly for

• a coordinated expansion and strengthening of the energy network

• an exchange of best-practices regarding the acceleration of planning processes (eg innovative concepts of citizen’s participation)

22 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper b) Initiate and facilitate data exchange and digitalization

WHY is digitalization a key criteria in our future supply chain? - Introduction

Globalization has made supply chains become increasingly complex with a lot of involved partners and risk factors. In addition, economic challenges force companies to increase their business agility to survive. To further develop themselves within this global world and to remain competitive, companies must increase and adapt their operational capabilities by enhancing their supply chain processes: they need to improve their planning & monitoring mechanisms, they need to increase their ability to deal with unexpected events, and they need to react effectively in case of emergency. These are all improvement goals which can be reached thanks to digital solutions. The trilateral European chemical cluster represented by Flanders, the Netherlands and North-Rhine Westphalia nowadays is “one of the most powerful chemical industry clusters in the world4”. With its highly integrated structure, this chemical cluster enjoys an existing network which takes advantage of interconnected logistical solutions. Nevertheless, in order to reach an even higher, safer and more sustainable level of excellence, the development and the further use of digital solutions in the supply chain is an absolute must for the chemical industry. Using digital cross border solutions will strengthen the attractivity, the connectivity and the efficiency of the whole trilateral cluster. Connecting supply chain partners in the cloud, allowing them to collaborate and exchange information in real-time, will significantly change the way global companies will manage their value chain. Supply chain collaboration in the cloud will increase business agility, productivity, bottom line performance and reduce operational risks and associated costs. A precondition for the implementation of many of many innovative digital solutions to come will be the comprehensive roll out of a 5G network along the main transport routes. To ensure “highly competitive, sustainable sourcing and distribution” solutions for our industry (reliable, efficient, safe and environmentally friendly transportation), priority working areas are:

• Improved reliability & efficiency: Efficiently sharing accurate specific data reduces operational costs. Combined with forecasting and real-time planning & steering, it enables the optimized use of own and third- party resources. • Improved sustainability of distribution: Based on volumes and transport lanes, optimization potential like improved capacity utilisation, shift potential to other transport modes, or infrastructure needs to support modal shift, can be easily detected. • Improved safety and security of transport of chemicals: Proactive detection of risks and more rapid intervention, should be an alternative to quantitative risk assessments, initiated by government or other interested parties. Thanks to real time data sharing, monitoring of the different transport modes and along the whole supply chain is possible. This will increase operational safety during distribution.

Taking full advantage of digitalization requires data sharing between all stakeholders involved in the supply chain. Not only between direct business partners but also other parties in the supply chain,

4 Trilateral Strategy between the Netherlands, Flanders and NRW, for strengthening the cross-border Chemical Industry, Prognos, Brussels/Düsseldorf, May 2017.

23 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper with whom there is normally no direct commercial relation (infrastructure management, equipment owners, terminal operators, shipping agents,…). There are many digital services, platforms and systems related to supply chain optimization in development or already implemented while there are many initiatives running, also in the chemical industry. Examples are NxtPort, CORE, SaMoLoSa, , NextLogic, while the Port Community System of Portbase is already operational since 2009 and is in continuous development. Some initiatives focus on the chemical industry like e-ECD, CLICCS5. These initiatives need to be expanded to the entire trilateral region. We are convinced that chemical industry federations have an active role to play in these digital initiatives, by supporting the development of smart community solutions that fully seize the potential benefits thereof, and by representing our industry in case of external initiatives.

WHAT are the different optimization opportunities along the whole supply chain?

When looking at the supply chain, there is a clear need for further developments to really turn it into a ‘digital & transparent supply chain’. When comparing current and digital supply chains, we can easily see how digitalization, through several steps, can improve the efficiency, safety and other aspects of the supply chain. To reach this higher supply chain optimization & transparency, optimization can be reached in different supply chain areas: Increasing supply chain delivery reliability and optimization of logistics operations Stakeholders from the chemical sector contribute directly to a more competitive cluster for the trilateral region, thanks to digital solutions, by improving their logistics operations and optimizing capacities. A better management of the different transport modes on/off site thanks to real time information helps to better organize the planning of the loading operations from the shippers and customers. As a result, transport companies can also increase competitiveness based on collaborative planning, optimization and steering.

Digital information that can support to improve processes: • Status information (shipped, loaded or not, …) of transport equipment are available in real time for all parties • Loading operations can be better foreseen on site and therefore operated at a lower cost, for both shipper and customer • Better customer service based on proactive planning and steering Optimized transport management (routing, traffic, event & risk management optimization)

Thanks to digital transport solutions, mobility within the trilateral region can be improved: shippers are able to follow their goods being transported in real time, transport companies are able to better manage their fleet. This means that the routing of the transport modes can be modified instantly if needed because of traffic jams issues or increased risks on the road due to unexpected events (e.g. accidents).

Modal shift can be fostered thanks to data analytics of transport modes.

5See also the detailed EPCA study „Digitisation in the Petrochemical Supply Chain“,https://newsroom.epca.eu/wp-content/uploads/2018/03/494491a2732736c46b1a1705bc3dbdbb.pdf, 2018.

24 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Finally, overall safety can be improved: potential required interventions can be executed faster and more efficiently in case of emergency. Firemen or any other safety entity would receive more specific real-time information and the communication/consultation with the authorities might therefore be improved.

Some areas of improvement are: • Smart selection of optimized transport modes • Information related to transport modes (planning, capabilities) easily shared between stakeholders • Reduced transport lead time thanks to routing optimization based on a better traffic management (e.g. avoid congestion) • Risk prevention related to transport of (dangerous) chemical goods improved thanks to a better routing & traffic management • Improved traffic management due to taking into account weather conditions (adaptation of Fraunhofer concept developed for maritime transport) • Compatible multi-lingual traffic management systems / telematic in ports and ChemParks in the trilateral region to increase the efficiency of deliveries. • Cross-border truck navigation with priority routes and dynamic pre-set sequence control when it comes to the (un)loading point in the trilateral region o Which technical solutions exist or need to be developed to allow for a dynamic retrieval of traffic data, to communicate data to all relevant truck navigation systems, to assign individual truck routes and to do so in coordination with passenger car navigation systems? • Interventions on the road more efficient thanks to real time transport & product information • Level of confidence in the whole transport process increased

Optimized infrastructure management

Using digital solutions will give public authorities and private operators of infrastructure the opportunity to manage their systems more efficiently, and to optimize maintenance work which leads to a reduction in costs and downtime.

Examples of improvements: • analysis of potential and possible funding of/for digitalization of crane installations by using sensor technology to avoid overload and downtime

• sensor controlled bridges for predictive maintenance purposes to avoid severe damages, to identify weak constructions and to take this into consideration when it comes to the planning processes of new constructions

Optimized fleet management (pool management / cleaning and repair optimization) Thanks to a better overview of the whole fleet, shippers, transport and cleaning companies can better plan & manage their goods, vehicles and services. Optimized fleet management will reduce transportation costs. Smart equipment allocation will reduce empty equipment on the road/rail and therefore increase overall mobility and reduce congestion within the trilateral region.

25 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Examples of process improvements:

• Supervision of the fleet is easier thanks to real time planning of the rolling stock, taking into account the required equipment characteristics depending on the type of goods. • Historical data (repair, cleaning and other services) related to the fleet can be stored into cloud solutions and easily found back • Maintenance costs can be optimized based on real transported kilometres, instead of periodical revision. Also, preventive revisions can be executed based on unexpected events (e.g. shocks, ...), to avoid future incidents (e.g. leakages) • Potential costs of using the wrong vehicle or equipment are reduced • Cleaning & repair operations can be performed more accurately thanks to fleet information

Safe and secure product & quality management

From a product safety and quality point of view, digital solutions will help to avoid human mistakes and raise security standards. This can obviously represent a major safety improvement for all the actors of the supply chain since automatization processes help preventing risks related to production, transport and other operations. From this perspective, developing digital solutions should be an important future asset for an enhanced transport safety. Improvement areas are: • Product quality and transport safety optimized thanks to real time measurements of product conditions: temperature, pressure, … Both quality and safety are also improved thanks to automatic checks of forbidden preloads or in case equipment specifications are not suitable for the product • Product safety and emergency response is increased thanks to centralization of product information in cloud storage solutions (human omission is avoided)

As a general conclusion, it is clear that, through all supply chain processes, developing digital solutions are and will become increasingly a MUST from a safety, efficiency6 and a mobility point of view.

HOW digital solutions should be realised? - Guarantee transparent and efficient data exchange by connecting supply chain parties, systems and platforms; set the right conditions

The current supply chain is characterized by fragmentation, due to a sub-optimal focus of each stakeholder on his or her shackle in the chain. At present, the opportunities for further improvement in that approach have come to an end. Future optimization needs to be driven by collaboration across the chain. Digitalization will be the key to finally create an integrated supply chain, characterized by speed, transparency and accuracy. A major prerequisite for achieving this is a willingness of all relevant stakeholders to have a holistic view and open mindset. This takes time and will be achieved via an iterative step-by-step approach. A prerequisite for a successful digitalization is the cooperation among supply chain partners based on trust and understanding of the interest and behavior of supply chain parties. At the same time, there is an opportunity for a technological refit of the entire supply chain. At present, it still relies to a large extent on technology from the nineties: EDI messages, e-mail, not to mention fax. Data platforms, blockchain, technologies to anonymize data such as the Fraunhofer Institute initiative “Industrial Data Space” (IDS), Internet of Things (IoT) and

6 Including leadtime, reliability and mostly the utilization rate of the assets.

26 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Artificial Intelligence (AI) could leverage the global supply chain towards more transparency and speed. All use cases supporting the digitized integrated supply chain are driven by data. Currently, a lot of data has always been available but locked up in data silos, and therefore often communicated too late or not at all to have a meaningful impact on the overall efficiency. Therefore, the idea of a harmonized & improved interconnectivity of the various existing digital systems and platforms that are currently quickly arising makes sense. The goal of such harmonized & shared solutions would therefore be to truly connect all relevant stakeholders. However, we believe that these harmonized interconnected solutions needs to have specific characteristics to be successful: - Interoperability: we do not believe in the winner takes all. Data platforms are often a reflection of specific needs of their stakeholders. Therefore, it makes sense to have an open architecture, allowing to connect with other, often complementary, platforms. This asks for harmonization and standardization of definitions and processes. The digital initiatives – and the underlying platforms and systems that need to be connected - need to operate in an open environment where all relevant stakeholders can join. History has proven repeatedly that open platforms scale faster in participation and have faster innovation cycles since all stakeholders feel positively triggered to be actively involved.

- Governance: Connecting all relevant digital solutions together will require governance needs in order to make sure that data can be shared between stakeholders for relevant use cases and priorities. As a level playing field, it provides an important enabler towards the required trust between the different parties. Moreover, each digital initiative can only exist because it is licensed to operate by the chemical industry and related logistics stakeholders : the neutrality of the data governance entity of these connected digital solutions is one of the key points.

- Data ownership needs to be clear. We believe strongly in the ‘opt-in’ mechanism approach: The owner of the data always defines who has access to what. It safeguards that the data platform can act as ‘data custodian’, meaning that someone who has been granted the trust that data cannot be distributed without permission. It needs to have stronger identity management capabilities, making sure that the person or organization is who they claim to be

- Data type should be well specified : define the types of information targeted : Track & Trace of transport modes, route management information, accident information, infrastructure availability, …

The basic capability that a well-designed, governed & harmonized set of common digital solutions can bring, is connectivity aiming at efficient data exchange between stakeholders in the supply chain. However, this is just the beginning. Once this has been achieved, data can be leveraged and combined towards improved collaboration, often resulting in process orchestration initiatives. Improved operational efficiency for all thanks to increased transparency is the most tangible impact. A final step is the enablement and implementation of data exchange and harmonized processes via innovation, where existing ways of working are either fundamentally redesigned or replaced all together or upscaled / copied to a larger region / group of users when successfully functioning. Some of the running initiatives are mature enough to capture the potential benefits in the foreseeable future, but they need to be interoperable & harmonized to the highest degree to combine their strengths.

27 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Finally, these common digital solutions have to be enriched with a framework that covers at least the following elements: • Data standards including international standardization of messages, definitions, events, conditions etc. • Data governance aiming at data quality • A guarantee that all relevant legal requirements are met, such as data privacy • A solid architecture with a focus on business continuity and resilience. Cyber security for sure plays a role in that.

A great digitalization use case example: the e-ECD project The digitalization of the EFTCO Cleaning Document is a pilot project being currently developed in collaboration between essenscia, ECTA and EFTCO. The goal is to digitalize the EFTCO cleaning document process in order to increase the efficiency of the whole chemical transport chain: this ECD document is nowadays still used as a paper version. Some issues are common related to the use of this paper version: - Truck drivers may arrive with the wrong document to the sites of chemical companies - Truck drivers may lose time waiting for this document to be checked by the shipper - Rejected trucks causes operational delays and extra costs - Manual checks might leave some errors that will lead to quality or safety issues - Fraudulent input may be given which can lead to incorrect cleaning operations, higher risks for persons, Therefore, an unique e-ECD document will be standardized for all the stakeholders of the supply chain.

Transforming this paper ECD into a digital e-ECD booklet stored into a cloud solution will make it available online, including cleaning history. It will also make sure that all data recorded aren’t fraudulent, correctly registered, …

The goal of such a project, which started with pilot companies coming from Belgium, the Netherlands and Germany with support from the different associations, is to scale-up to a European scale. It is therefore a typical example of a trilateral strategy data exchange use case.

28 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

Other relevant digital projects for the chemical industry are described in annex. Next steps It is clear that, with regard to this themes like optimization of (container) supply chains, traffic / safety / fleet management ..., the scope of these initiatives is often wider than just the chemical industry. Given the present digital landscape and developments of the Trilateral region, it seems obvious for the moment that a centralized & connected platform of various digital solutions (or data hub) dedicated for the chemical industry is rather a long-term goal. Therefore the focus of the follow-up on this theme should be more practical:

It is suggested to identify realistic, small scale and preferably proven digital initiatives like eECD and ‘efficient and city-compatible truck navigation’ instead of ‘burning our fingers’ to overly ambitious issues that are already in development with a wider focus than the chemical industry only. These initiatives should meet one or more of the optimization opportunities below:

• Increasing supply chain delivery, reliability and optimization of logistics operations • Optimized transport management (routing, traffic, event & risk management), infrastructure management, • Fleet management (pool management / cleaning and repair optimization) and safe and secure product & quality management

We see two areas to focus on as a starting point for the analysis of the existing landscape of applications in the trilateral region :

• Moving towards a paperless and unbureaucratic transport chain (e.g. by introducing cross- border, paperless CMR waybills, an electronic bill of lading for maritime transport, harmonized customs procedures and import-turnover tasks) • Improving the connectivity between modes of transport in ports and terminals offering real time based solutions to optimize operation plans and to maximize productivity of transport and logistics assets. These initiatives have to be listed and prioritized, based on the same criteria’s than the ones used in the interconnectivity topic to differentiate priorities : • The potential to ‘go trilateral’: common interest for Flanders-Netherlands-NRW • The sense of urgency • The impact and the term considered to observe this impact • The effort and the time needed to have it implemented.

Another important aspect are the conditions that have to be met to connect the different partners, systems, legally & technically, regarding data security & data privacy. Issues include e.g. the (international) standardisation and harmonization of messages / definitions / processes / conditions, the willingness among (supply chain) partners to cooperate, based on mutual trust and understanding of (individual and common) interest :

• The data gathered has to be standardized and well defined by all stakeholders7. Moreover, the data protection conditions should be harmonized between all stakeholders from the trilateral regions as well. Once the accessibility of the data for all stakeholders has been clearly defined and established, the exchange of these data and its security might be managed for example thanks to blockchain solutions.

7 such as: chemical companies, ports, chemical parks, authorities, logistics companies, …

29 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

• The use of a common digital solution should also be standardized and accessible in all situations: a multilingual system should be operational for all stakeholders with an optimized interface and an access made possible thanks to a good data network allowing for reliable connections along the corridors.

Recommendations

• Possible commissioning of an independent consultant identifying best practice applications, analyzing existing ‘connectivity initiatives’ in and across the three regions, highlighting hurdles for an improved interoperability (technical and regulatory) - accompanied by an interregional working group • Based on this preliminary work, further research work should be done to assess the (technical) feasibility of the connection of various digital solutions from the Trilateral region. It should support cross-border transport and collect all the required data in order to improve the overall mobility and operational safety in the Trilateral region. Therefore, the authorities should jointly with the chemical companies: o Provide and/or support financially the connection of existing digital solutions used as data sources: tracking & tracing captors, sensitivity captors for the Infrastructure used (hardware devices) but also of the platform system itself and of the required applications developed to use the platform such as transport management systems (software device) o Provide legal support in order to make sure that the data gathered is harmonized and protected. o Provide technical knowledge for the development of the connectivity of the existing digital solutions. o Enable cross border cooperation between supply chain parties and related stakeholders

• The trilateral regions gathered for the Trilateral Strategy should also investigate which EU funds/subsidies could be considered as eligible for such development. Digitalization is and will be a major topic in infrastructure & logistics in the future so we should seize the opportunity on EU level considering the scope of the Trilateral region.

30 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper

PART III Towards a comprehensive trilateral infrastructure strategy 1. Key Conclusions

− We need a new mind set by thinking and acting in supply chain networks across all transport modes, borders, supply chains and business partners

• Therefore, we propose amongst others: to increase the speed of transition to intermodal transport

- We need to develop a common vision of pipeline transport

• Therefore, we propose amongst others: to designate corridors for developing new and maintaining existing pipelines and we need to close the missing link by creating west/east pipeline connections

− We need a shift to low-emission transport

• Therefore, we propose amongst others: to promote eMobility and the uptake of alternative fuels and drives in ChemParks to install a low-emission vehicle fleet

− We need to make the most of digital solutions

• Therefore, we propose amongst others: to identify best practice applications, analysing existing ‘connectivity initiatives’ in and across the three regions and to assess the feasibility of connecting them in the future within the Trilateral region

− We need to increase efficiency regarding infrastructure planning and project implementation

• Therefore, we propose amongst others: to define and locate priority areas for logistics (clusters), ChemParks and associated transport routes alongside a dedicated Trilateral Region Transport Network (TRTN) to avoid conflicts against the backdrop of urbanization trends complementing or expanding the TEN-T corridors

2. Closing Statement

The WG on Infrastructure within the Trilateral Strategy for the Chemical Industry welcomes the Trilateral Strategy for the Chemical Industry as a very constructive and timely format to engage in a cross-border dialogue bringing together ministries, companies and industry associations. Looking at the intense cross-border nature of supply chains in the chemical industry it is absolutely essential to look at the broader picture and to leave national silo mentalities behind. By exploring synergies, identifying priority topics and joining forces in developing concrete projects the chemical sectors in the three regions will be able to cope better with the challenges they face in an increasingly difficult global market environment.

We do not want to reinvent the wheel. We want to share ideas and bring forward projects that already exist in one region. This also serves the purpose to support projects of the European Chemical Industry Association (CEFIC) in the trilateral region.

The Trilateral Strategy for the Chemical Industry is a very valuable initiative. This position, situation and requirement paper and the concrete ideas listed in the different chapters show the willingness

31 Trilateral strategy for the Chemical Industry WG on Infrastructure // Position, Situation and Requirements Paper and the creativity of the industry to make the strategy work. We are very thankful for the initiative by the three regions and expect that the work of the working group is a good basis to move the process forward. To this end we need the continued support of all stakeholders – ministries, political actors, companies and industry associations – in the regions, on national and European level. An approach based on a balanced participation from all three regions is the key to a successful initiative, which depends on a collaboration in the spirit of compromise.

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PART IV Annex

Annex 1. Map of major chemical clusters in Europe (ECSPP and CEFIC).

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Annex 2. Map of refineries, crackers and pipelines in the Benelux, APPE 2004.

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Annex 3. Map of pipelines in the trilateral region.

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Annex 4. Map indicating the view of industries as regards the border crossing points and the main directions of the most important existing transport pipeline corridors.

Annex 5. Overview of a large part of the chemical-pipelines in North-Rhine-Westphalia.

Marl

l

Köln

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Annex 6 : a non – exhaustive list of digital solutions already at stake for the chemical industry in the Trilateral region

Flanders :

• Nxt Port : C point is a digital platform used for communication between partners around the port of Antwerp which helps to reduce administrative procedures and enhances operationalisation • Samolosa (Ovinto) : tracking & tracing of transport modes • RX Seaport • Barge Tracking System (BTS) • Rail Tracking System (being developed in PoA)

Netherlands :

• Port Community System https://www.portbase.com/en/ • Connects all parties in the logistics chain via one single window for data delivery and sharing in a common way (status data at vessel or container level, think of ETA/ATA vessel, status/release/gate-out containers) • Operational for many years nowadays with 43 services and meanwhile handling 90 mln messages per year between 14.500 users representing 4.000 companies. • More and more parties use the services of Portbase e.g. containers at the terminals on the 2nd Maasvlakte can only be picked up after notification in PCS • Digital Business Solutions https://www.portofrotterdam.com/en/business- opportunities/digitalisation • In the ecosystem, Port of Rotterdam is an independent and trusted party. This expertise and position makes the Port of Rotterdam an ideal partner for clients and ports to realise their digital ambitions. • Within this context, Digital Business Solutions (DBS) has been launched, next to the Port Community System. • With regard to supply chain optimisation, DBS develops a range of tools that unveils new opportunities in the whole supply chain. It exposes nodes and connections, tracks cargo and

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modalities. It stimulates collaboration between all parties involved in efficiency, including upcoming end2end platforms. ▪ SCOPE: improved inland reliability ▪ Pronto (intra port optimization) ▪ Next Logic (dynamic management of barge planning) ▪ Shiptracker (assessment of arrival of vessels) ▪ HaROLD (test phase, train tracking) ▪ Prince (assessment of arrival of containers) ▪ Mobile optical character portal (truck recognition) ▪ …

NRW :

• NRW project on “Efficient and city-compatible truck navigation for the Rhineland and North Rhine-Westphalia” o In NRW, a priority truck network has been worked out in cooperation with cities and municipalities, supported by a web-based portal. o For heavy-duty transport, each municipality collects the existing restrictions as minimum requirements: height, weight, and width limits as well as truck driving-through prohibitions. Additional restrictions can be easily integrated. o It initially refers to the area of the metropolitan region of Rhineland with 148 cities and municipalities, but is designed and implemented for a nationwide, or beyond, expansion.

Logport • The logport concept by the Duisburger Hafen AG is built around the idea of reutilizing brownfield sites, redeveloping spaces and establishing multimodal logistics centres. • An integral part of this concept is the constant issue of making logistics processes more efficient by using digital solutions. This centres around efforts and initiatives to develop digitalization tools for bi- and trimodal hubs. • The example project “bimodal terminal logport III” encompasses amongst others o the optimization of crane moves and predictive maintenance for cranes o the optimization of localization processes o the optimization of terminal operations (road and rail side)

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Trilateral :

Waste Transportation ILT • Belgium, the Netherlands, Germany and other public and private agents: Waste Transportation ILT (European Union tender winner) • Dutch and Belgian governments, together with other public agents, AVR and Indaver, cooperate on the waste transportation solution as part of the EU tender LTO Network won in 2018. The partner Capptions is developing the user interface, which is then integrated with LTO Network backend solution.

• EU governments supervise the removal and transportation of waste to and from other EU countries, connecting multiple agencies to manage the operation. It formerly relied on manual, paper heavy processes, but by using LTO Network blockchain, the authority aims to free up human resources for other tasks. The LTO blockchain infrastructure provides an immutable way of verifying data about the weight of the shipment and the quota, making interactions among the parties trustless and secure. Data is being shared only across the stakeholders — since it has to be done in a GDPR compliant way.

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