Overcoming the barriers of electrifying Dutch light hydrocarbon cracking
Summary
The Light Hydrocarbon Cracking (LHC) industry needs to decarbonise its production process to achieve the nationally set mission for a carbon-neutral industrial heat system by 2050. The main solution to this mission is electrification of the cracking process, also known as e-cracking. E-cracking is currently in the pilot phase, with two active demonstration projects, but faster development is required should the deadline be met. This study, therefore, aimed to identify and analyse the barriers inhibiting this transition. The theoretic framework of the Mission-specific Innovation System (MIS) and the systemic problems from the Technological Innovation System (TIS) framework formed the base for this research. A modified MIS analysis was used to analyse the LHC industry.
This modified MIS approach takes a barrier-centric approach, where the system barriers are identified and qualitatively explored, before analysing them. Afterwards, the analysed barriers were related to the system functions, to serve as intervention points targeted recommendations could be aimed at. Expert interviews with actors from different parts of the system and desk research were used to identify the barriers. Seven central barriers emerged from the data. These were the incalculability of financial risk into the market price, the infeasible business case for e-cracking, uncertainty regarding grid expansions, insufficient communication channels, limited cooperation, and general uncertainty. The analysis revealed which problem types lay central in causing these barriers, and which MIS system functions lay central in solving them. The problem types that are most relevant to the barriers are primarily related to problems with institutions and interactions in the system, while system functions that played a particularly important role were knowledge diffusion, knowledge creation, and market formation. Keeping the discovered relationship between the barriers and the system functions in mind, targeted recommendations to alleviate the system barriers and thus improve the performance of the innovation system have been made in the conclusion. Recommendations include suggestions for protective and punitive policy to bolster the e-cracking market, a coordinating entity to facilitate interaction and collaboration in the system, a change to the industry mindset, and government investments to enable grid expansion for sustainable transitions.
This thesis contributes to the growing body of MIS literature. It takes a new barrier-centric approach and utilises the MIS in an incumbent, competitive-natured industry. Additionally, this thesis utilises the MIS in a system where primarily one technological solution is used to achieve the mission, bringing new insights to MIS dynamics.