Industrial Symbiosis in Stenungsund

Following text is based on the findings and outputs of a research originally conducted by Elias Andersson, Oskar Arfwidsson, Victor Bergstrand, Teresia Göransson, Linnéa Haag, Linnea Sund, Sara Svedlund. A copy of this group's original work can be accessed here.

Arial photo of helsingborg
The Stenungsund area has had activities that can be considered as industrial symbiosis for a long time. In the latest years the involved companies have taken a step further on their common journey towards a strong cooperation with the vision Sustainable Chemistry 2030. This text examines said vision, the cooperation between the five companies and how it might evolve in the future. (Image source: Stenungsund Kommun)

Overview of the Region and the Network

Stenungsund is a municipality located on the west coast of Sweden and has a population of about 25 000 people. The Stenungsund area is interesting from an industrial symbiosis point of view due to the energy, feedstock and knowledge exchanges among the five large chemical companies, the local utility companies and the municipality.

Key Actors and Main Resource Exchanges

Borealis

In Stenungsund Borealis have four plants, one cracker plant were ethylene is produced and three polyethylene plants. Some of the ethylene produced is sold to the other chemical industries. Borealis also produce the by-product fuel gas which provides the other industries with fuel. Waste heat from Borealis is send to the local district heating network which provides the municipality of Stenungsund with heat.

INEOS ChlorVinyls Sweden

In Stenungsund PVC, lye and hydrochloride acid is being produced. INEOS also produce hydrogen, and the excess is sold to Borealis.

Akzo Nobel

Akzo Nobel is the world’s largest paint company and in Stenungsund the company manufacturs amines and surface substances.

Perstorp

Perstorp in Stenungsun produces specialty chemicals that can be used in for example specialty glass and water based colors. This facility also hosts Scandinavia's largest plant for production of the biofuel rape seed methyl ester (RME), a type of bio diesel used as fuel for vehicles. Perstorp also delivers their waste heat to the district heating network, providing the municipality with heat.

AGA Gas

This facility produces oxygen, carbon dioxide, argon and nitrogen gas from ambient air. The gases are used in the food industry, metal works and others.

Figure below shows main in- and out-puts of these indusries, as well as their connections with one another.

Key actors and their connections in Stenungsund

Figure 1: Main in- and out-puts of key actors in Stenungsund and their connections with one another (Based on Hackl et al. 2010 and Jansson 2013)

Environmental Benefits

Borealis and Perstorp contribute with around 74 GWh district heating per year to the municipality of Stenungsund. Assuming that natural gas would be burned to provide the same amount of energy if the by-product heat was not available (local energy utility company Stenungsunds Energi och Miljö AB–SEMAB–currently uses natural gas when waste heat is not enough) it is estimated that this synergy reduces carbon dioxide emissions by around 15 ktonne/year.

Another synergy between the chemical industries is the fuel gas, consisting of by-products from the cracker plant of Borealis, which provides Borealis, INEOS, Perstorp och Akzo Nobel with fuel. Today, the chemical industries in Stenungsund use around 424 ktonne fuel gas/year, mainly consisting of methane and hydrogen. Since the fuel gas is a by-product that would have been burned without taking advantage of the energy if not used in the industry processes, the assumption is made that it does not contributes to any carbon dioxide emissions. The assumption is also made that Borealis, INEOS, Perstorp and Akzo Nobel would use natural gas as a fuel if they didn't have access to the fuel gas. If the assumption is made that the fuel gas has the same energy content as natural gas, using 424 ktonne natural gas, instead of fuel gas, would increase carbon dioxide emission by around 1 149 ktonne/year.

Economic and Business Benefits

Sustainable Chemistry 2030 is a vision set up by the chemistry companies in Stenungsund. It consists of an overarching goal that the included companies are going to be fossil independent, regarding both energy supply and raw material, by the year 2030.

There are no formal contracts regarding the collaboration between the companies in Stenungsund which is considered beneficial since they do not have to spend time and resources on keeping documents and similar in order.

The Stenungsund companies have developed a number of projects together. For example they have an emergency service together with the municipality. Furthermore, they have invested in a technical college together with the municipality of Stenungsund, with a perspective to spread and share knowledge. They have also worked with the municipality to create Molekylverkstaden which is a learning centre were schools can come and learn chemistry. Through the collaboration they have also been able to hire a consultant together in the starting up process of the work with the vision.

The view of the actors

As can be seen in the flow chart in figure 1, the companies have some commercial agreements where they sell/buy for example ethylene from each other. Even though the prices in these agreements are based on the market prices, the collaboration still saves them money because they do not have to pay for transportation or transport related costs.

To the municipality of Stenungsund the chemical industries are very important. Therefore, they are interested in a collaboration with the industries and they meet to discuss Stenungsund's future and development.

Key Enabling Factors and Drivers

The five companies meet when they have to make decisions about common projects. Normally this means that the CEOs see each other on a monthly basis to discuss the collaboration. In addition, other representatives from these five companies meet monthly to discuss the collaboration and Sustainable chemistry 2030. Thus there is quite a lot of personal contacts between the companies.

The vision Sustainable Chemistry 2030 is a good outcome of the collaboration. It brings the companies together and helps them create common goals.

Money for research, public procurement and policy instruments are important drivers for the cooperative work with Sustainable Chemistry 2030. Sweden having a clear political ambition towards bio-based chemistry is seen as another driver, because local companies have been collaborating in discussing rules and laws relevant for the realisation of this vision with the politicians. Sustainable Chemistry 2030 has improved the relationship with the municipality as well as with the region and the whole nation.

The companies have been existing in the same area for many years. With time the involved actors have developed ways to collaborate and they can be considered to have a high level of trust for each other. Overall, the cooperation seems to be highly accepted and appreciated.

Key Challenges

Present and future challenges for the collaboration have been notified.

Companies having different economic situatons is identified as a challenge that effects joint investments in collaborative opportunities. Another key challenge is related to local managers having limited authority regarding new investments, as the chemical companies are part of large multi-national groups and such investment decisions are taken by the head offices located elsewhere. Furthermore, work with industrial symbiosis is something that takes time from the main activities of the management and might therefore not always be prioritized by the multinational corporation and the leaders. If the business leaders are located in another country their interest to cooperate in different local joint investments is often lower.

To be able to reach the vision Sustainable Chemistry 2030 it will be vital to have long-term policies which will help the companies to make safer investments. For example, by the time this research was conducted there were rules regarding tax reduction for biofuels, which makes the production of biofuels from biomaterials cheaper than producing chemical feedstocks – such as bio-ethylene. This is a major problem and a big challenge. To be able to change the laws on tax reduction and make the production of feedstocks more economically viable the chemical industries in Stenungsund have to influence the formation of such a policy. This is however more difficult to influence because of the election of the government every fourth year.

In addition to the rules on tax reduction for bio-fuels, policy instruments concerning electricity certificates and waste management rules also act as a barrier in Stenungsund. This is because such tools provide support for the development of combined heat and power plants incinerating waste but not for utilising industrial waste heat. To make additional waste heat collection and utilisation possible, policy instruments need to be changed. Favourable loans on energy efficiency projects would also be an important instrument for future cooperation towards greener chemistry.

The logistics in the Stenungsund area is a future challenge, particulary with the presence of new actors. The logistics infrastructure–e.g. railways and harbours connected to the industries–have limited capacity and might not be able to serve the needs of additinal actors. This complicates the expansion of the cluster, as big investments into the logistics infrastructure may be necessary.

Future Possibilities for Synergies

Establishmet of a biorefinery and its integration with the existing industries, and increased energy integration among companies and with local community are identified as key oppportunities for the future development of the symbiotic network in Stenungsund. A fugure scenarios involving these developments is presented below.

Potential future structure of the Stenungsund industrial symbiosis network
Figure 2: In the future, a biorefinery could be added which would include a few more actors in the collaboration such as the forest industry, and new actors that could use the byproducts from the refinery would be possible as well.

Biorefinery

An important part of being able to reach the vision Sustainable Chemistry 20030 and be fossil free by 2030 is to replace fossil based ethylene with bio-based one. The goal is to use forest material to produce ethanol and then use this to make ethylene in the already existing cracker plant. Therefore, a desirable new actor that could be integrated with the chemical industries in Stenungsund is a bio refinery.

The expansion of the network with the inclusion of a bio refinery would benefit both the environment and the economy in the region, since renewable and locally produced raw material will replace imported fossil based raw material. All five of the chemical companies would benefit from this since they then could promote themselves as more environmentally friendly. Building a biorefinery will also create job opportunities which will benefit the municipality.

Development of a biorefinery in the region requires a large investment and finding an actor willing to make such an investment may consitute a key barrier. One option could be existing companies sharing the investment costs and jointly developing the plant. However, this requires agreement on the respective shares of investments, ownerships and responsibilities. Furthermore, as mentioned earlier, the situation may become more complicated due to different companies having different possibilities for new investments. Increasing the number of actors in the network can also be a barrier, as with the growing number of actors the complexity of relationships may also increase and may become more difficult to maintain. As the existing actors in the local network have close relationships developed over a long period of time, a new actor may have difficulties in integrating with this network. It takes time to develop trust for each other. To assign a leader for the relationships in the collaboration could help to overcome this barrier.

Increased energy integration and district heating

Together with the Chalmers University of Technology the petrochemical industries in Stenungsund have carried out a project to investigate the possibilities for increased energy integration. The results show that the energy use of the companies in Stenungsund could be reduced by up to 89 MW, if a number of measures were implemented. These could result in cost savings of up to 200 MSEK.

The chemical industries see a potential in this project and also in a project for delivering district heat to the municipality of Stenungsund, but there are technical and economic concerns that have to be solved before it can be realized. It is possible that none of the chemical companies in Stenungsund are ready to make the needed investments and a third party might be needed to make the investments, take the economic risks and bring the right knowledge to the table.

Making better use of waste heat from the chemical industries in Stenungsund is a very important question for the private and public actors in the region. Since Stenungsund has a limited heating demand, possibilities for extending the district heating network towards the nearby city of Gothenburg and other municipalities are being discussed. Unfortunately, progress has been limited primarily due to the big investmens required for such integration.