The transition of the Dutch carbon-based chemical sector must be seen in light of the Netherlands’ ambition to achieve a fully circular and climate-neutral economy by 2050. As fossil-based feedstocks still dominate today’s carbon chemistry, a fundamental shift toward recycled materials, biomass, and captured CO₂ is required. Invest-NL considers this transition both a necessity for meeting climate objectives and a strategic opportunity to strengthen the long-term earning capacity and competitiveness of the Dutch chemical industry. At the same time, this transformation involves significant technological uncertainty, high upfront investments, and financing challenges that can slow down scale-up. To better understand how the sector could evolve and where targeted financial interventions may be needed, Invest-NL has analyzed the development of Dutch carbon chemistry toward 2050 through a structured scenario approach.
This report analyzes the transition of the Dutch carbon-based chemical sector toward 2050 through three scenarios: (1) Current Policies, (2) Earning Capacity, and (3) Maximum Circularity.
In all scenarios, net CO₂ emissions decline to zero by 2050 as a result of the European ETS policy. However, developments in production volume and the associated cost increases differ significantly between the scenarios.
In scenario (1), Current Policies, the uneven playing field compared to foreign competitors leads to a sharp decline in domestic production, resulting in a rapid reduction of domestic emissions. The associated decarbonisation costs remain relatively limited, but the likelihood of achieving actual global emission reductions is low if demand remains unchanged.
In scenarios (2), Earning Capacity, and (3), Maximum Circularity, a larger share of production is retained in the Netherlands. This results not only in higher domestic emissions during the first decades and a stronger increase in the costs of chemical products, but also in greater domestic decarbonisation efforts.
The technological results show that the initial decarbonisation steps are mainly determined by cost-effectiveness and feedstock availability. Recycling routes and bio-based feedstocks are among the lowest-cost options in all scenarios and are deployed to the maximum extent as long as suitable circular carbon streams are available. These technologies deliver a large share of the initial emission reductions at relatively low cost, but they face scaling limitations as these feedstocks become scarcer.
Policy measures also influence technological scale-up. The Packaging and Packaging Waste Regulation directly stimulates the expansion of mechanical recycling, pyrolysis, and solvolysis. FuelEU Maritime and ReFuelEU Aviation create additional demand for sustainable fuels, causing technologies with a substantial fuel component to rank higher than would be expected based solely on production costs for base chemicals.
After 2040, further sector-wide emission reductions inevitably shift toward more expensive options: fossil-based production combined with CCS, or synthetic routes based on CO₂ and green hydrogen. In scenario (3), Maximum Circularity, only fossil-free routes are selected, leading to a sharp increase in total system costs. This demonstrates that it is not the beginning of the transition, but rather its final phase, that is the most complex and costly.