The location factors for plastic to oil companies

A new circular opportunity for Dutch seaports

By Nizette Couzy

Master Thesis

2015

Erasmus school of EconomicsMsc Urban, Port and Transport EconomicsStudent number: 335967

University Supervisor: Dhr. Michiel NijdamCompany Supervisor: Dhr. Coen Peelen

Preface

When I was starting my thesis the only certainty was that my master thesis would be about a port related subject. I was able to do a research for the department Seaports from Maritime Affairs from the Ministry of Infrastructure and the Environment. They provided me with the opportunity to influence the research topic. After many interviews and a brainstorm session the subject became the circular ability of plastic to oil. This subject triggered my mind, because it was practical, much to learn and challenging.

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Abstract

This research is done for the department of Maritime Affairs form the Ministry of Infrastructure and the Environment. In this research the location factors for worldwide plastic to oil companies are gathered and compared with the location factors needed for the Dutch plastic to oil companies. The Dutch location factors contribute to find and explain possible locations for Dutch plastic to oil companies.

From the theory a list with possible location factors is created. Those 14 location factors are tested with worldwide plastic to oil companies, from the US, Europe, and Japan. The location factors are classified in three different categories: necessary, conducive and negligible. The necessary location factors are highway distance, to locate on a business park, the availability of feedstock, and the availability of a sales market.

Interviews are held with four different Dutch plastic to oil companies to investigate the location factors for Dutch plastic to oil companies. From the interviews a list with location factors for Dutch plastic to oil companies is created. The same classification is used for the location factors: necessary, conducive and negligible. The necessary location factors for Dutch plastic to oil companies are highway distance, port distance, to locate on a business park, the availability of feedstock, certified demand, the availability of a sales market, and the willingness of a seaport. Three of the location factors are not necessary according to the worldwide plastic to oil companies, namely port distance, certified demand and willingness of a seaport. Most of the Dutch plastic to oil companies wants to establish in a seaport. The largest seaports are compared for the availability of the necessary location factors for Dutch plastic to oil companies. The results show that Dutch seaports can provide all the necessary location factors. This difference between the location factors of Dutch and worldwide plastic to oil companies can be explained by the importance from seaports for the Dutch economy. At the same time the seaports are investing in new circular technologies and therefore a great willingness to attract plastic to oil companies to their port can be explained.

Besides the location factors, other factors influence the Dutch plastic to oil companies. An uneven level playing field between waste-to-energy and plastic to oil makes it more difficult to close the business case for Dutch plastic to oil companies. Dutch government policy can create an extra step on the Ladder of Lansink and so plastic to oil is seen as feedstock recycling. Although many Dutch governmental policies are based on recycling, circular economy, green growth and use waste as a resource, plastic to oil is not mentioned in those policies. Pyrolysis is only mentioned by MIA and Vamil that are fiscal arrangements. To achieve the recycling targets sets by the EU and the Dutch government other ways of the waste collection methods need to be investigated, because they could contribute in the willingness of separate waste in households.

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Table of Content1. Introduction....................................................................................................................................5

1.1 Problem introduction...................................................................................................................5

1.2 Research questions.......................................................................................................................7

1.3 Research strategy.........................................................................................................................7

1.4 Research structure.......................................................................................................................8

1.5 Relevance.....................................................................................................................................8

2. Theory Framework.......................................................................................................................10

2.1 Circular economy........................................................................................................................10

2.1.1 The change towards a circular economy.............................................................................10

2.1.2 Circular economy.................................................................................................................11

2.2 Circular economy in the Netherlands.........................................................................................12

2.3 Circular economy in Dutch seaports...........................................................................................14

2.3.1 Introduction.........................................................................................................................14

2.3.2 The current situation in Dutch seaports..............................................................................15

2.3.3 Threats and opportunities in Dutch seaports......................................................................16

2.3.4 Port vision on circular economy..........................................................................................17

2.4 Plastic to oil versus waste-to-energy..........................................................................................18

2.4.1 Options for non-recyclable waste plastics...........................................................................18

2.4.2 Plastic to oil versus waste to energy....................................................................................18

2.4.3 Expanding the plastic loop...................................................................................................20

2.4.4 Opportunities plastic to oil..................................................................................................20

2.5 Location factors for chemical industry.......................................................................................21

2.6 Comparative advantages............................................................................................................24

3. Research methodology.................................................................................................................27

3.1 Research context........................................................................................................................27

3.2 Research method........................................................................................................................27

3.3 Research material.......................................................................................................................28

4. Location factors............................................................................................................................30

4.1 Worldwide plastic to oil locations...............................................................................................30

4.1.1 Introduction.........................................................................................................................30

4.1.2 Worldwide plastic to oil companies.....................................................................................30

4.2 Location factors per country.......................................................................................................32

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4.2.1 Chosen location factors.......................................................................................................32

4.2.2 Plastic to oil companies per country....................................................................................33

4.3 Location factors plastic to oil companies worldwide..................................................................36

4.4 Location factors Dutch plastic to oil companies.........................................................................43

4.4.1 Dutch Plastic to oil companies.............................................................................................43

4.4.2 Conclusion from the four Dutch plastic to oil companies....................................................45

4.5 Available location factors Dutch seaports..................................................................................47

4.6 Conclusion..................................................................................................................................49

5. Other factors influencing plastic to oil companies.......................................................................51

5.1 Other factors influencing plastic to oil companies......................................................................51

5.2 Government policies..................................................................................................................51

6. Conclusion and discussion............................................................................................................54

6.1 Conclusion..................................................................................................................................54

6.2 Discussion...................................................................................................................................56

7. Recommendations........................................................................................................................57

8. References....................................................................................................................................58

Appendix 1 - Interviews........................................................................................................................63

Appendix 2 – Total list plastic to oil companies....................................................................................64

Appendix 3 – List with plastic to oil companies left out of the research..............................................66

Table 3.1: Plastic to oil companies technique only...........................................................................66

Table 3.2: Plastic to oil companies without location of the factory..................................................66

Table 3.3: Plastic to oil companies left out although in ACC list (Holmes, 2011)..............................67

Appendix 4 – Location Factors worldwide pto companies...................................................................68

Appendix 5 – Location Factors Dutch plastic to oil companies.............................................................74

Appendix 6 - Plastic to oil figures United States and Europe................................................................76

Figure 6.1: Plastic to oil location United States...............................................................................76

Figure 6.2: Plastic to oil location Europe.........................................................................................76

Appendix 7 - Standard question form Dutch Plastic to oil companies..................................................77

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1. Introduction

1.1 Problem introduction

1.1.1 IntroductionThe world population is still growing and therefore, our consumption is still increasing according to the Planbureau voor de Leefomgeving (PBL) (PBL, 2011; Kok, Wurpel & Ten Wolde, 2013). The welfare of a large part of the people, the middle class, is also increasing, as stated by the Ministry of Infrastructure and the Environment (I&M) (I&M, 2013a). This is leading again to increasing consumption. Up until now, this increasing consumption was not a huge problem, because production was relatively easy to increase (Ellen MacArthur Foundation [EMF], 2013). Waste was not seen as a real problem. However that changed, because a growing number of countries has limited land available for landfill, and the pollution and the environmental risks appeared to be damaging. Nowadays, resource scarcity (Kok et al., 2013) is one of the new problems arising in the production sector (PBL, 2011). The reasons are that prices are increasing and raw materials are getting more scarce. Because of the scarcity and environmental problems there should be a decoupling between economic activity and the environmental impact. The way countries are retrieving their welfare should change (United Nations Environment Programme, 2011). Recycling, green alternatives, and generating a more circular economy can contribute to this decoupling. Putting the incentive to industry, will contribute in creating a more professional recycling industry, this is seen as the solution (Bakker, Dimaio & Rem, 2013).

The linear economy, also called the take-make-waste (Kok et al., 2013; I&M, 2013a) or take-make-dispose (Ellen MacArthur Foundation [EMF], 2012) economy, existed for many decades. However, recently it is on its return. Raw materials are getting scarce, and in many countries, the waste landfill is piling. In 1979, Lansink made his preference for a waste management model ‘de Ladder van Lansink’ (Bergsma, Vroonhof, Blom & Odegard, 2014). This was an important insight in the waste sector. This waste management model is also important if the entire economy wants to be more sustainable. According to the EMF (2012), the trend is to change from this linear economy to a more circular economy, which includes a bio cycle for biomass and techno cycle for inorganic materials (EMF, 2012; Kok et al. 2013). Therefore, reforming the entire supply chain to create a loop with as little waste as possible (EMF, 2013), and with limited material destruction (Bastein, Roelofs, Rietveld & Hoogendoorn, 2013). Other possibilities to create more closed loops are re-use, recycle, and repair materials and products (Kok et al., 2013). Another circular step is to see what the possibilities are with the waste coming from every step in a supply chain. This waste can be an input for other companies, to avoid landfill. Of course, this is the ideal situation and it takes many small, but important, steps to get the closed loop.

The European Union (EU) is supporting green programs for more resource efficiency (European Commission, 2011). The EU countries base their own programs and legislation on the EU legislation. The European Commission (2014) will turn Europe in a more circular economy and boost recycling. Therefore, sustainability is an important subject in the Netherlands. The Dutch government has legislation for separated waste collection in households and companies. Large quantities of paper, glass, biodegradable waste, electrical devises, and plastics are collected separately (Hanemaaijer, Rood & Kruitwagen, 2014). The paper and glass industry has high recycling rates and cooperating companies changed the supply chains many years ago, to do so.

1.1.2 PlasticsPlastic consumption is still increasing (Panda, Singh & Mishra, 2010) and the lifetime expectancy of plastic is less than a month for 37.2% of the plastics in Europe and 35% of the plastics

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worldwide (Al-Salem et al., 2009; Panda et al., 2010). Therefore, recycling those plastics will have a positive impact on the material scarcity and the environment. Reusing plastics has numerous advantages, namely, conservation of fossil fuels, reduction of energy, reduction of carbon-dioxide (CO2), reduction of other greenhouse gasses like nitrogen-oxides (NOx) and sulphar-dioxide (SO2) (Al-Salem et al., 2009).

At this moment, only a part of this plastic waste is recyclable. This has multiple reasons, some are contaminated, or the condition of the plastics makes it nearly impossible to recycle (Holmes, 2011). For some plastics, it is technically not possible to recycle them or it is not cost efficient to do so (Panda et al., 2010). Those non-recyclable plastics end up like waste on landfill locations (Panda et al., 2010) or they are burned in waste-to-energy installations.

There are four different categories of plastics. The first group is the thermoset plastic that are non-recyclable, examples are powder coatings, repair resins, and insulating foams. The second group contains of elastomers and foam, which are partly recyclable, examples are expanded foams for building and furniture. The last two categories, the thermoplastics are roughly 80% of the total plastic consumption (Al-Salem et al., 2009). The third group is the single-polymer plastics, which can be divided in thermoplastics with a density bigger than water, examples are cups, pipes, plastic bottles, compact disc covers and food storage containers. The last group is the plastic with a density lower than water; examples are yoghurt containers, syrup bottles, supermarket bags and six pack rings. Both of the thermoplastics are completely recyclable (Panda et al., 2010).

The last few years, the recycling of plastic is growing and the supply chain is still under reconstruction. Pointed out by Bergsma et al. (2014) is that the preferred option is to recycle as much plastics as possible. He points out that in the ‘Ladder of Lansink’ it is preferable to use the highest step possible or available on the ladder (Bergsma et al., 2014). A possible solution would be to make oil out of the plastic waste. This means that the plastics can be re-used instead of burned, which is expected to be a better alternative (Panda et al., 2010). About 25% of the plastics are recycled in the Netherlands. Calculations of a recycling specialist from the TU Delft1 showed that 900-mega kilo of plastics are burned in the waste-to-energy installations on this moment. The expectation of this is that 400-mega kilo of plastics is capable for pyrolysis. Therefore, adding pyrolysis will create an extra step in the plastic loop.

1.1.3 Plastic to oilPlastic to oil, also called pyrolysis, is the process where non-recyclable plastic waste is cracked into oil. As pointed out by Panda et al. (2010), the plastic to oil process is “the controlled burning or heating of a material in the absence of oxygen”. The high quality of this oil makes it useful for multiple purposes. The oil is useful as shipping oil, car fuel or fuel for other machinery. In the future, it seems possible to re-use the oil to make new plastics.

The feedstock used in plastic to oil factories can be a mixture of plastics. After sorting and cleaning this mixture of plastics, it is ready for the pyrolysis process. Nowadays there is technology available for the full automatic sorting process of plastic waste. By using various techniques, like x-ray fluorescence, spectroscopy, flotation, electrostatics, and infrared, the sorting process is automated (Panda et al., 2010). This sorting can be necessary to obtain a high quality of the oil. This is because the mixture of plastics is not contaminated and some plastics can only be used in smaller percentages. For example, only small percentages of PVC are aloud.

Although this plastic to oil technique exists for decades, commercial companies use it since the last 15 years. More and more worldwide companies are unfolding factories. Internationally those companies seem viable, so therefore it could be an opportunity for Dutch companies as well. A research to the quantity and size of the plastic waste flows will be further investigated to

1 Interview with recycling and resources professor at the TU Delft, interviewed at the 3rd of October 2014.

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gain more knowledge about the recycling, waste-to-energy and disposed plastics flows (I&M, 2014e).

1.1.4 Location The possible location of a plastic to oil installation is not a random point in space, but a well-made choice. Different locations in the Netherlands can be preferred to build a plastic to oil installation. A plastic to oil company is a chemical company and chemical companies tend to cluster (Porter, 2000). In the Netherlands, there are five chemical clusters. Three of those clusters are located in Dutch seaports. A location in a port with a chemical cluster could have advantages over other locations, like good infrastructure for facilitating large flows of materials, the availability of plastics and knowledge spillovers (Roelandt. Hertog, Sinderen & Hove, 1999). However, we have little knowledge what the best location in the Netherlands would be to build a plastic to oil installation. It seems possible that a chemical cluster will be favored over other locations, because plastic to oil is a chemical process. This is because those clusters provide advantages for all the companies in the cluster.

In this research, the possible location factors that influence the location decision for a plastic to oil factory are combined with the available location factors of Dutch seaports with chemical clusters. Besides the location factors, other more general factors could also influence the founding of Dutch plastic to oil companies and therefore they are included as well.

1.2 Research questionsIn this paragraph, the research questions are explained which are used for this research. The main question of this research is:

Which location factors are stimulating or obstructing the founding of plastic to oil companies in Dutch seaports?

In order to answer the main question, this research is composed of a theoretical framework and empirical research answering several sub-questions. The theoretical framework will discuss the definition of a circular economy, the circular economy in the Netherlands, in Dutch seaports and the advantage of plastic to oil over waste-to-energy. Subsequently, some basic models for location theories are discussed. This is discussed in chapter two.

To answer the main question from this research, the following sub questions have been identified:

To what extent is the technique of plastic to oil developed and desired? Which location factors are conducive or necessary for plastic to oil companies and are

they present in Dutch seaports? What kind of governmental policies are conducive or obstructive to the founding of

plastic to oil companies in the Netherlands?

1.3 Research strategyIn this research, multiple research methods are used to answer the main and sub questions. A desk research is combined with multiple interviews. First, in scientific journals, background information about plastic to oil and the pyrolysis technique is gathered, to gain more knowledge of the subject. Then, additional interviews within government research institutes2 and the Ministry of Infrastructure and the Environment (I&M) are done to establish the research problem.

2 Interview with a researcher of the Climate change, Energy and Environment department at CPB Netherlands Bureau for Economic Policy Analysis, interviewed at the 6th of June 2014.

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To write the theoretical framework, more information about the circular economy in general, previous researches done by government institutes, and researches done by independent Dutch institutes are combined with an interview with a policy advisor3. In the literature some basic location factor models will be discussed and further location factors will be found by searching for previous research to the location factors of chemical industry.

The core from the empirical research is a desk research combined with multiple interviews with Dutch starting plastic to oil companies, experts on plastic to oil and recycling, combined with information about worldwide plastic to oil companies. A data-triangulation is applied to ensure a validity of the outcomes of this research.

The next step starts with a continuous search in scientific journals to location factors for plastic to oil and general chemical industry. This can be combined with the available location factors in Dutch seaports.

Another desk research to previous governmental policies will be executed to compare possible obstructive policies with the needed location factors for founding plastic to oil companies in the Netherlands.

1.4 Research structureThe first chapter gives a brief introduction, explains the research problem, and identifies the main question and the sub questions of this research. The scientific relevance and research structure are discussed as well. In the second chapter the theoretical framework is explained to identify the importance of the change into a more circular economy. In the last few years, this change is started to get visible in the Netherlands and in the Dutch seaports as well. Additionally, the location factors from prior researches are identified and previous research about plastic to oil is discussed as well. In the third chapter the research methodology is presented.

The first part of the empirical research, chapter four, identifies what location factors are conducive or necessary for plastic to oil companies and if those location factors are available in Dutch seaports. In chapter five, the government policies which contribute and could be conducive or obstructive for the founding of plastic to oil companies are identified.

In chapter six the conclusions of the sub questions is stated and contributes to answer the main question of this research, so what factors are stimulating or obstructing the founding of plastic to oil companies in Dutch seaports. Chapter seven is the last chapter and concludes with the desired location factors and recommendations for the Ministry of Infrastructure and the Environment.

1.5 Relevance More and more research is available from institutes and companies about plastic to oil and the circular economy. The reason for this is the growing interest from companies and governments. Companies have two reasons why their interests in a circular economy have developed quickly in the last decade. First, higher costs of raw materials have a huge impact on future strategies, and second, from an environmental perspective. The main point of multiple international organizations like the EMF and the Plastic Soup foundation are to stimulate green alternatives, the circular economy and to tackle the plastic waste problems.

In the Netherlands, many researches by PBL, Raad voor de Leefomgeving en Infrastructuur (RLI), TNO, and the Circularity Center are done. These researches provide knowledge in creating

3 Interview with a policy advisor at the directorate Sustainability, about the circular economy, interviewed at the 16th of May 2014.

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a more circular economy, and how it can influence the Netherlands in the future. Those Dutch research institutes are in favor of a more circular economy, and plastic to oil seems to be a great opportunity. Up until now, there is not a working plastic to oil installation in the Netherlands. Apparently, there are still issues and bottlenecks unsolved. Therefore, the Ministry of Infrastructure and the Environment is supporting this research to discover the bottlenecks. For example, none of those researches considers a location choice, which is a shortfall in the scientific literature. Therefore the scientifically relevance is stated.

Besides a scientific relevance, there is a social relevance. Multiple companies are working on the establishment of a plastic to oil factory. In the Netherlands, it seems that seven companies are interested in plastic to oil. All those companies could have the same bottlenecks or different ones. Therefore, a research can provide insights to this bottlenecks and the location choice of those companies.

For the government, companies, and the wider public, establish plastic to oil companies can provide benefits, namely less pollution, more employment options, and green growth. The aim of governmental policy is stimulating green alternatives, recycling, and lowering waste, for the health of the wider public. Advantages for companies are buying this cheaper oil, use byproducts or they can easily get rid of their plastic waste.

Different ports, like the Port of Rotterdam and the Port of Amsterdam are stimulating the case of plastic to oil. In their port visions, green methods and sustainability are important subjects (Port of Rotterdam, 2011; Port of Amsterdam, 2014a). They see future possibilities and growth for techniques, like plastic to oil in their ports. From the government, multiple divisions have interest in the plastic to oil as well. The Ministry of Infrastructure and the Environment (I&M) have the directorate of Sustainability and Maritime affaires, which support this research. For PBL, RLI, TNO, and the Circularity Center this could be an interesting case as well.

In the Netherlands multiple researches are done in the last decade to understand what the challenges and the opportunities are for the Dutch economy (PBL, 2011; Bastein, 2013; RLI, 2013; CPB, 2014). To promote this circular economy in the Netherlands the Circularity Center is established in 2014, further aims of this centre will be discussed in section 2.3.2. The popularity of circular economy is growing and worldwide visible. In 2006 in the US, the Centre for Life Cycle Analysis (n.d.) is established. In China is ‘the China Association of Circular Economy’ (CACE) established (China sets up, 2013). In India the Research Centre for Fuel Generation (n.d.) is established in Mumbai. In Japan the Niigata Plastic Liquefaction Centre is already established in 1997 in Nigata city, for extra attention to plastic to oil (Plastic Waste Management Institute, 2009). Another institute located in Japan is the International Environmental Technology Centre (IETC). For the UNEP they execute research and it leads to a Policy Brief on Waste Plastics in 2013 (IETC, 2013). Many countries are further supporting circularity and in developing plastic to oil companies. Nevertheless, the Netherlands are following this trend.

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2. Theory FrameworkIn this chapter, the theory that substantiate to the empirical research is provided. First, the beginning principles and the definition of the circular economy are covered. Then, the circular economy in the Netherlands is explained, and the circular economy in Dutch seaports. Followed by the explanation why plastic to oil is important for the plastic loop. Subsequently, the location factors for the chemical industry are identified and comparative advantages as well.

2.1 Circular economy

2.1.1 The change towards a circular economyAs stated before in section 1.1 ‘The take-make-waste economy is on its way back”. For many decades, this seemed to be an optimal solution due to the growth of the population and the lower prices of raw materials. The turning point for the increasing prices is around the year 2000. From this moment on, prices were increasing which is stated by McKinsey’s Commodity Price index for 2011, which is seen in Figure 2.1.1.1 (EMF, 2012). The figure shows the turning point, with the following reasons: the effect of the quick growth in population, growth of consumption, growth of consumption options, and growth of wealth. All those reasons together, are an assault on our earth. The consequence is an increase in demand for raw materials. With business-as-usual, so not even a forecast of demand growth, the consequence is that within a few decades a lot of raw material sources are exhausted (Kok et al., 2013). Since the start of the new millennium, the prices of resources are inclining, because of the resource scarcity (EMF, 2012). The expectations are that this will be the new trend even with business-as-usual. Besides the increase in prices, also the risk of volatile prices improved the drive to reform the economy (EMF, 2012; Kok et al., 2013; RLI, 2013).

Figure 2.1.1.1: McKinseys’s Commodity Price index for 2011

Source: (EMF, 2012)

Another problem that arises with the linear economy is the waste problem. Every product or input ends up like waste. We burn a substantial part of this waste to recover energy, nevertheless, still a lot of waste is piling up. Besides waste created by products that have reached their end of life, there is waste in the production chain. Significant volumes are lost in the supply chain, by poor efficiency, spills or leakage during production process or transport (EMF, 2012).

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A third problem with the take-make-waste economy is the environmental problem. Producing all those products has a negative byproduct, namely pollution. This pollution is not taken into account in the product price. This product price is actually too low therefore, it is called a negative externality (Kok et al., 2013). As explained by the RLI (2013), let the producer pay for the damage, because he is causing the negative externality. If the costs of the negative externalities are not included in the price of the product, the consequence will be more consumption of this product than in an optimal situation, so a higher demand. Therefore, more consumption means more negative externalities, than it would be in an optimal situation. Other negative externalities are climate change, health risks, a shortage of land, and social costs like low salaries in third world countries or child labor (RLI, 2013).

Lastly, the main idea of the take-make-waste economy to use products or services only a few times, will be seen as value destruction. Therefore, the government is discouraging this.

The solution for those problems is reforming the economy into a circular economy. This way materials and products can be re-used, waste can be avoided or use it further in the process. Pollution can be excluded as much as possible and maintaining as much value in the products and the supply chain.

2.1.2 Circular economy That a circular economy is not some trend but a longer existing theory can be proven by the fact that the economist Kenneth Boulding described the proposed goal-set in 1966 as “a circular economy is a long-term aim compatible with economic growth, optimal usage from resources, sustainability and zero waste” (Greyson, 2006; Kok et al., 2013; I&M, 2013a). Although the theory is developed many decades ago, in the last years there was an enormous increase in popularity.

According to the EMF (2013) is in the circular economy principle, the entire system based on renewable energy, to minimise the use of toxic chemicals and eliminates waste by design. To establish this, the one-way consumption is history and companies act more and more as service providers instead of sellers. A service provider maintains the ownership of a product so at the end of the usage period they can collect and recycle the product. The type of products for which this change is possible are especially the physical products, made of materials and resources.

Kok et al., (2013) discusses the circular model as an enormous opportunity which includes multiple cost savings. To accomplish those cost savings, waste has to be minimized, a better management of supply chains is necessary and less raw materials need to be involved in the production process. This last point put a limit to the price sensitivity of companies.

The EMF circular model as seen in figure 2.1.1.1 illustrates two different loops. In the left loop the biological nutrients based materials and products are visible (EMF, 2012). These biological nutrients can easily be composted. This loop has the ability to reintroduce materials and products back into the biosphere. The right loop of the EMF circular model, illustrates the on technical nutrients based, non-renewable, produced materials, and products (EMF, 2012).

In a circular economy the ideal situation is to make materials circle longer, to keep the value in the system, choose the best recycling option available and eliminate waste. To keep the value of the materials as high as possible the EMF (2012) states: “Up-cycling is the process of converting materials into new materials of higher quality and increased functionality”. It means that the product has a higher quality than before. Down-cycling is the opposite, the product or materials lose quality. According to EMF (2012), downgrading is “A downgrade in material quality, which limits usability and maintains more or less the linear material flow”.

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Figure 2.1.1.1: The Circular Economy

Source: (EMF, 2012)

If we compare the recycling options from the EMF (2012) and the Ladder of Lansink4, we get the following order: prevention of using materials, repair, re-use, refurbishment, remanufacture, recycling, and energy recovery and in the end, waste disposal.

2.2 Circular economy in the NetherlandsSince many decades the Netherlands is striving to produce greener, produce less waste and recycling plays an important role. The last years the policy of the Dutch government is striving forward. The aim of the Dutch government is to close loops, by using green growth to make the Dutch economy more circular (I&M, 2014a; Slingerland, Veenstra, Bolscher & Rademaekers, 2014). In June 2013, a government letter regarding waste as resource is send (I&M, 2013c). This letter is part of multiple letters which inform the government how to stimulate a circular program, support green growth and which researches are done (I&M, 2013a; I&M, 2013c; I&M, 2014a; I&M, 2014b). These researches are done for the entire Dutch economy, and predict many opportunities in creating a more circular economy (Bastein et al., 2013). The Dutch policy is based on four principles: first, adjust the prices with environmental externalities without creating an unbalanced level playing field, second, stimulate regulations and law that takes away bottlenecks, like green deals, third, innovation and fourth, the government as a partner for companies, institutes and initiatives by citizens (I&M, 2013c; Slingerland et al., 2014).

We have seen many ways in which the Netherlands is already putting the circular economy into practise. In 2013, 79% of our waste is already recycled (Bastein, 2013; I&M, 2013a; I&M, 2014b). This calculation is based on the percentage of our waste that is collected separately. Waste-to-energy is also seen as recycling, which is expected to be around 16% (I&M, 2011), and approximately 3% is disposed (Bastein, 2013). During the last Municipal Waste Europe (MWE) gathering in Brussels, it became clear that if the recycling definition is properly explained and sharpened, that none of the EU countries will manage to have the recycling percentage of 70%. The difference between the old calculation (where we score about 79%) and the new method is, that only the waste offered for recycling is counted (Koninklijke vereniging voor afval- en reinigingsmanagement, 2014).

4 See section 2.4.1 for the Ladder of Lansink

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The government needs an overall policy to support this circular innovation based on waste as a resource. First, the government needs to support initiatives based on innovation. Secondly, the waste and environmental policy needs to support the transformation to an optimal, modernized and altered production process (I&M, 2013a).

Examples that the government (and so the ministries) have an aim on green growth are the many letters from the Ministry of Infrastructure and the Environment. Those letters contribute to this green growth and stimulating the circular economy (I&M, 2014a; I&M, 2014b). Besides the letters, a couple of reports are available to support this green growth and about creating a more circular economy (Slingerland et al., 2014). An example is the Plastic Cycle Value Chain Agreement (I&M, 2013b). This agreement is signed by the government in 2013 together with 60 other companies, like the plastic industry, financial sector, ports and institutes (I&M, 2014c). The aim of this agreement is to decrease the plastic waste and a better recycling of this plastic waste. By making decisive steps within two years, a sustainable plastic market should be created. This is done by changing and redesigning the production chain, improving the plastic waste process and with a high-quality recycling process (I&M, 2014c).

At the same time several departments of different ministries do conducting research to opportunities. One of the main examples of instruments the government uses is the establishment of so called “green deals”. Green deals are clear initiatives where society and the government work together, to deduct bottlenecks. The bottlenecks are law and regulations, networking, knowledge and information problems. Central themes are energy, food, water, resources, biodiversity, mobility, bio-based economy, climate and construction (Ondernemend Groen, n.d.).

Since 2011 at least hundred sixty green deals are signed. In Figure 2.2.1 the location of the green deals are visible. A recent green deal was signed in September. The core of this Green Deal Scheepsafvalketen (I&M, 2014a) is that ships have to separate their waste and the separated collection is done in ports. Therefore, the aim is to reduce the waste that ships throw in the oceans. The advantages for the ships are that they could get discount on port fairs, value for their plastics and other valuable waste, and they are contributing to cleaner oceans. The separated collection of waste on board makes the different types of waste more valuable for recycling. This is because they have a higher value compared to the situation with the separation afterwards. A clean shipping index [CSI] is used to measure how green ships are, and to add this green deal in the index would stimulate ships to separate their waste (I&M, 2014a). At the same time a pyrolysis and recycling installation in ports would stimulate this separated collection, according to I&M (2014a). Supporting new and innovative green deals creates further economic growth without environmental damage (Slingerland et al., 2014).

Some supply chains in the Netherlands are further developed in creating the circular economy. Examples are the paper, glass, metal and VFG (vegetable, fruit and garden waste)(I&M, 2011). Those types of waste are being recycled and used as new resources and used in new products (I&M, 2011). Besides those categories, the recycling of textile, and electrical finery is still growing, and the recycled materials can be used for production (I&M, 2011). The supply chains of the plastic recycling industry are still being established and growing every year.

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Figure 2.2.1: Green deals

Source: Ondernemend Groen. (n.d.)

Drinks cartons are one of the next groups which will be additionally recycled in the Netherlands. A successful collection and recycling pilot ended in 2013. The report by Stollman & Goorhuis (2014) has recently become available. From the first of January 2015, municipalities will receive reimbursements for collection and recycle those drink cartons (Stollman & Goorhuis, 2014).

2.3 Circular economy in Dutch seaportsIn the Netherlands a development into a more circular economy is going on and the same pattern is visible in the Dutch seaports. In this section, the change into a more circular environment and vision of the Dutch seaports is provided.

2.3.1 IntroductionThe circular economy is an important topic for Dutch seaports. According to a report from the IMSA (Oegema & Wurpel, 2012), the Port of Rotterdam is the logistical node in the Netherlands. Because of the opportunities there, the Port of Rotterdam can become the raw material roundabout in the Netherlands and contribute to the larger hinterland, like Europe (Oegema & Wurpel, 2012).

The largest seaports in the Netherlands have published their port vision until 2030. Every port has mentioned the point of sustainability or green growth. The five biggest ports in the Netherlands are involved in this research. In figure 2.3.1.1, the location of the different ports are visible. From top to the bottom: Groningen Seaports, Port of Amsterdam, Port of Rotterdam, Havenschap Moerdijk and Zeeland Seaports.

The port of Rotterdam is the biggest Dutch seaport and even the biggest port in Europe. The Port of Rotterdam handles many containers and bulk. The Port of Amsterdam is the second largest seaport in the Netherlands, and still in the top 10 with biggest ports of Europe. The other Dutch seaports are much smaller.

Seaports have two functions. The main function of a port is a node in a transport chain. The second function is a location for economic activities (De Langen, Nijdam & Van der Lugt). In this report, the second function, the port as a location for economic activity is the investigated function.

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Figure 2.3.1.1: Five biggest seaports in the Netherlands

Source: (I&M, 2014c)

2.3.2 The current situation in Dutch seaportsEvery seaport in the Netherlands is different, because of their location, hinterland, customers, economic activity, and the raw materials that are shipped. In this difficult time, the seaports are changing and sustainability is becoming an important factor. The work program for the Dutch seaports has six different themes, which help the development of the seaports in the next two years (I&M, 2014c).

Many Dutch seaports are earning money by transporting large quantities of raw materials. Companies that need those resources are established in Dutch seaports or those materials are directly exported to companies in the hinterland. Dutch seaports have specialized areas which are important for the Dutch economy. All five of the largest seaports, have specialized chemical clusters and large energy companies on their territory (Lanser, 2013). Other important clusters are bio-based and logistical activities.

In the Port of Rotterdam, sustainability is important. Many years ago, they started building AVI’s so they can burn the waste in the region. The electricity of this waste-to-energy can be re-used. At the same time, the heat that is a by-product in this process is used for a central heating system in the city of Rotterdam. Other by-products like CO2 are transported to the greenhouses in the Westland area (Oegema & Wurpel, 2012).

The port of Amsterdam and Port of Rotterdam are creating a bio-based cluster which is more circular than other clusters, because the bio-based materials can be re-used. At the same time the Circularity Center is in 2014 established. This cooperation from the Port of Rotterdam, Rabobank Rotterdam, Bikker & Company and Van Gansewinkel established the Circularity Center [CC] in Rotterdam (Circularity Center, 2014). The purpose of this CC is knowledge and business development in the circular economy. The ambition of the founders is to re-use materials and products, to accelerate the development of a circular economy and to develop new business models. This Circularity Center is an extra boost in creating awareness for circular economy and further develops the possibilities (Circularity Center, 2014).

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2.3.3 Threats and opportunities in Dutch seaportsNowadays, Dutch seaports are still depending on fossil resources, like oil, black coal and on large quantities of raw materials. The threat is that those products are becoming scarce and the volumes will drop in the future. Ports need to find other ways, products, methods to gain revenues. Changes are already visible in the funding of bio-based clusters, new technology companies, or other companies establishing on the port areas. Another change from the ports is their vision. The vision of the ports changes to a more sustainable view. Recycling of waste and materials is supported, to use the materials again and for a better environment.

According to Wurpel, Akker, Betsema, & Oegema (2013), the future expectations for the ports are not easy to forecast. This research by Wurpel et al., (2013) explains how the Port of Rotterdam can develop in being the most sustainable port in the future and what the possible growth scenarios can be.

The Club of Rome expects three possible scenarios in the future, which are stated in figure 2.3.3.1. The first scenario is the standard+. They expect that the present trends with business as usual will stay and that there will not be any breaks in the trends from the last decades. Because of the scarcity of the raw materials and resources, every new unit will become more expensive to obtain then the ones before. Therefore, the negative impact on the environment will increase over time just as the pollution. According to Wurpel et al. (2013), the expectation for the Port of Rotterdam is first an initial growth, but after two decades, the throughput will decline below current levels.

The other two scenarios have different assumptions compared to the standard+ scenario. They incorporate the effects of possible interventions that change the current trend. The second scenario is the technology scenario. The scenario is based on the technological changes, for producing the same products, less materials are necessary (Wurpel et al., 2013). The last scenario, the integral scenario elaborates on the technology scenario. Additional to this integral scenario is that it expects a behavioral change with consumers and companies. The behavioral change is about consuming fewer products, and less resource. A more stable, but small growth is expected in this scenario (Wurpel et al., 2013).

Figure: 2.3.3.1 Throughput Rotterdam (million ton)

Source: (Wurpel et al., 2013)

Wurpel et al. (2013) points out that a different solution is necessary and that a growth in volumes is not the answer. Sustainable growth however, is an excellent opportunity. In that case, the Port of Rotterdam has to continue with further developing green opportunities, which can contribute to new green economic activities. The development from a fossil port to a more bio-

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based port is inevitable. Although, this report from Wurpel et al. (2013) has focused on the Port of Rotterdam, the situation in other Dutch seaports is comparable.

2.3.4 Port vision on circular economyEvery seaport is making a port vision 2030. In this vision, they point out their expectations for the coming years. Those seaports have enough ambitions about sustainable growth. To arrange this, the port authority, government and other stakeholders need to be involved actively (Lanser, 2013). In the following areas, this sustainable growth is possible: bio-based energy, circular economy, more sustainable logistics chains and sustainability of energy resources (Lanser, 2013).

The circular economy is an important topic in the Port of Rotterdam and the Port of Amsterdam. It becomes clear that the policy in the ports is based on eliminating waste as much as possible and at the same time handling the remaining waste correctly, for example to recycle as much as possible.

The Port of Amsterdam is involved in finding alternative business to ensure the future growth. In the new port vision, it becomes clear that the development of the port is expected to be from new innovative technology (Port of Amsterdam, 2014a). Examples are making triplex out of biological waste or plastic to oil (Port of Amsterdam, 2014b). The chemical industry is still growing. They put a new business manager5 on the plastic to oil business case, so it can enroll quickly. The heat, which is a by-product of waste-to-energy, is distributed to 161,000 households in Amsterdam (Lanser, 2013).

In the port vision 2030 for the Port of Rotterdam, important concepts reduce, re-use, and recycling are mentioned (Port of Rotterdam, 2011). The main aspects for the Port of Rotterdam are innovation, biomass, further development of the circular economy and container growth, because of the second Maasvlakte (Markus, 2014). The chemical industry in the Port of Rotterdam is still developing. The government and the Port of Rotterdam will actively attract recycling companies (I&M, 2011).

The ambition of Havenschap Moerdijk is to be the most important hub between the Port of Antwerp and the Port of Rotterdam (Port of Moerdijk, 2014). Other ambitions are value creation, sustainability, and safety. The port vision 2030 (Port of Moerdijk, 2014), adds the extendibility of a sustainable industrial complex (Lanser, 2013). Moerdijk sets in on recycling flows to export to other countries. The exchange of energy, water, heat, and CO2 are put on the agenda (Port of Moerdijk, 2014).

For Zeeland Seaports the port vision of 2030 is still in progress. However, in the strategic master plan 2020 is the aim to develop the industry, which can mutual exchange waste and by-products (Zeeland Seaports, 2009). A sustainable development from their logistical activities is an important aim.

In the port vision 2030 of Groningen Seaports (Groningen Seaports, 2012), re-use is an important factor. In Delfzijl, the chemical cluster is sustainable and for a large part based on biological and renewable resources. Groningen Seaports would like to further develop and expand this cluster (Groningen Seaports, 2012).

The combining factor of the port visions is that every one of them is based on sustainability. All the ports have interest in new technologies, recycling waste and new opportunities to ensure

5 Interview with the project manager new business at the Port of Amsterdam, interviewed at the 16 th of July 2014.

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their future. Ports are cooperating with new companies to expand their economic activities in the area.

2.4 Plastic to oil versus waste-to-energyIn the previous sections the importance of a circular economy is explained. The steps that are already taken in the Netherlands and in the Dutch seaports are discussed. To continue this research it is important to better define the role of plastic to oil. Therefore, in this section the consequences of plastic to oil and waste-to-energy as solutions for non-recyclable plastics will be discussed and which technique is desired.

2.4.1 Options for non-recyclable waste plasticsThree options are available for non-recyclable waste plastics after usage, namely landfill, waste-to-energy, and plastic to oil6. With the advantages of a circular economy and closing loops in the back of our mind (Section 2.1), the disposal of plastic waste on a landfill is not the desired outcome. A landfill location costs space, creating polluting risks and is downgrading the product entirely (Dijkgraaf & Vollebergh, 2004). Waste-to-energy, however, is a better solution because it creates energy that is useful as electricity or for heating houses. In the last years, multiple waste burning installations (AVI’s) are established in the Netherlands. By-products like CO2 are useful for companies that use it as an input factor. Other by-products like heat are redistributed for heating parts of a city and offices. However, the rest of the by-products as emissions are still polluting our air. The adjusted Ladder of Lansink is including waste-to-energy and visible in figure 2.4.1.1, and determines the waste hierarchy (Bergsma et al., 2014), which is the same for the European Union (European Environment Agency, 2013). Waste-to-energy is a better solution, a higher step on the ladder than disposal. Combustion or incineration is not used in the Netherlands any more, after the transition to waste-to-energy installations.

Figure 2.4.1.1: Ladder of Lansink 2.0

Source: (Bergsma et al., 2014)

The only problem is that the Ladder of Lansink is made in 1979. Newer versions are available which include newer techniques for waste handling, like combustion and waste-to-energy (Bergsma et al., 2014). Unfortunately, pyrolysis is not mentioned in the Ladder of Lansink and so the exact position of this technique is not formality stated. It is difficult where to place the plastic to oil on the Ladder of Lansink.

2.4.2 Plastic to oil versus waste to energyFrom the theory, it is useful to recycle all plastics when possible, as stated in section 1.1.2. This comes down to recycle the single-polymer plastics, like PE, PP, PS etc. (Al-Salem et al., 2009). Most of the remaining plastics are useful for pyrolysis or waste-to-energy. If the plastics are

6 Plastic to oil is explained in section 1.1.3

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contaminated or if the mixed plastics are consistent of mixed resins, and therefore unsuitable for recycling, the plastics are still useful for the pyrolysis process (Panda et al., 2010).

Other problems with recycling waste plastics is if the plastics do not have a neutral color but when pigment is added for a different color. Then, it is more difficult to recycle the plastics, because a mixture of carbon black or titanium white plastics with neutral colored plastics is determined as value destruction. Besides the market value of carbon black and titanium white, the separation is important, to prevent down cycling, according to the recycling and resource expert7. In addition, he points out that the same problems arise when we consider the additional materials added by plastic products to raise the compatibility and performance like fillers for saving materials. For instance, glass fibers or UV stabilizers. Nowadays the technique is available that those plastics are adequate for pyrolysis (Panda et al., 2010).

Multiple reasons are available why plastic to oil is a more circular solution than waste-to-energy. According to Panda et al. (2010) producing liquid fuel out of plastics is a better alternative than reclaim waste-to-energy. This is because the calorific value of plastics and oil are comparable. The calorific value is a measurement form the energy which is released when the fuel is reacting with oxygen (Panda et al., 2010). According to the American Chemistry Council (ACC) (Holmes, 2011) pyrolysis is a better option than waste-to-energy. For a further quite technical explanation, see (Holmes, 2011).

A second reason is that plastic to oil closes the plastic loop, compared to waste-to-energy. If we use pyrolysis to produce oil, less of the polluting gasses will be set free in the air. The oil is useful for different companies, and is used for transportation, machinery or in other sectors. If the oil meets the European quality standards, the oil is sold for less than the market price. If this price is high enough, burning plastics in AVI’s will decline at a certain pace.

A third reason, is keeping small loops, because that is more efficient than larger loops. Although in the Netherlands, most AVI’s are recently built and are efficient, a more efficient way is available to generate electricity. Therefore, retake the oil from the plastic waste and use it as fuel has a higher efficiency.

The pyrolysis technique is still improving. It is a matter of time before the quality of the oil is so high, that we can make new plastics out of this oil. Then we would close the loop entirely, and creating the best solution for this type of products.

In the past, researchers ware afraid that if plastic to oil facilities are build, all types of plastics will disappear there, even if they can be recycled. However, a recycling expert8 points out that this will not happen, because recyclable waste plastics have a market value (Holmes, 2011). For the plastics available for pyrolysis it is important to keep the price as low as possible for the plastic waste. This will contribute to plastic to oil as a more attractive option than landfill (Holmes, 2011). The height of the landfill tip is not important because it is always higher and less attractive.

Another concern about the quantity of the feedstock is not genuine, because by choosing for pyrolysis the per-ton waste-to-energy fee is saved by the owners (Holmes, 2011). This is another argument in favor of plastic to oil.

While the pyrolysis technique is still improving, the costs of recycling are still expensive. In the future newer and more developed techniques will increase the percentage of plastics which are economical viable for recycling. If new insights occur, money can be saved in the collection process. Combining those elements can make recycling become cheaper. For more plastics it is economically interesting to recycle them. Pyrolysis can also contribute by develop recycling

7 Interview with recycling and resources professor at the TU Delft, interviewed at the 3rd of October 2014. 8 Interview with recycling and resources professor at the TU Delft, interviewed at the 3rd of October 2014.

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techniques. The threat here is that pyrolysis will lose some market power in the next twenty years. Nevertheless, still the estimations for pyrolysis are positive.

2.4.3 Expanding the plastic loopIn this paragraph, there will be more explained how plastic to oil can influence the basic loop of plastics. This knowledge explains how plastic to oil is placed in the loop.

Oil is the basis for every piece of plastic. The oil can be transformed to plastics, by adding energy. Then, by adding more energy, the desired product is fabricated. The consumer will use the product and it ends up like waste. All the plastics, which can be recycled, need to be recycled, because that is the best possible solution. For this process energy is required as well. We can create an inner loop from recycling to the product, if the waste plastics can be recycled. The plastics that cannot be recycled have two options, the best option for now is waste-to-energy, and the other option is landfill. With plastic to oil, we could add a third option here. From those rest plastics, by adding energy we can make oil. Figure 2.4.3.1 below, shows this plastic loop.

Figure 2.4.3.1 Plastic loop including pyrolysis

Source: Interview with recycling specialist9

In the end, it will be possible to make new plastic products from that newly produced oil. For now, the quality is high enough to use the oil for multiple purposes, like fuel for ships or cars for instance. Other options are diesel electrical generators, diesel pumps, boilers, burning light heating oils, hot air and steam generators, construction mechanization air pumps and other mechanization-using diesel. The quality of the oil has to meet many regulations, before it can be sold on the market. By adding the possibility of plastic to oil, we can extend the loop for plastics and make it more circular. Fewer plastics are burned in AVI’s and therefore by adding pyrolysis, less downgrading is happening.

2.4.4 Opportunities plastic to oilThe oil converted by pyrolysis, also called waste plastic oil (WPO) looks similar as diesel. This WPO is tested as fuel in a diesel engine. The WPO results and characteristics are comparable with diesel fuel. The conclusion is that a diesel engine can run on 100% waste plastic oil. Side

9 Interview with Recycling and Resources professor at the TU Delft, interviewed at the 3rd of October 2014.

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effects are that NOx is about 25% higher and the CO2 output increased with approximately 5% compared to diesel fuel (Mani, Nagarajan, & Sampath, 2011).

In a research done for the ACC in 2011, different American techniques are compared. From this research, the following conclusions are important. The output of the pyrolysis process contains fuel (about 80%-90%), natural gas (about 8%-10%), and char (about 2%-13%) depending on the used feedstock and technology (Holmes, 2011). The natural gas can be clean burned, or re-used in the system, to contribute in the system energy needs. This proportion is expected to be about one-third (Holmes, 2011). The fuel can be quite different based on the used technology and plastic waste used in the process. Some produce a gasoline-diesel fuel, while others generate a product similar to crude oil (Holmes, 2011). Those fuels need to be further refined in most cases. Char is the leftover material that contains the contaminants of the former feedstock. It can be powdery or more like a sludge, like a heavy oil. The char can burn in waste-to-energy plants so it is almost a zero-landfill option for those non-recyclable plastics (Holmes, 2011).

Only a basic air pollution permit is needed in the US, because the emissions are lower than the basic permit standards (Holmes, 2011). Systems cost between $1 million to $5 million for a 7,000-10,000 ton a year facility. The expected return on investments is short, between one to four years in the US (Holmes, 2011).

2.5 Location factors for chemical industryLocation factors are important for a company. They help in deciding on which location the company will establish their factory and for what reasons that particular location is chosen.

There are only a dozen plastic to oil companies worldwide. Therefore there are not specific researches done for the locations factors of plastic to oil. Pyrolysis is a chemical process, so it belongs to the chemical industry. We can use chemical industry location factors and compare them with the actual situation in the Netherlands. This way an overview for the location factors will be created.

Now a brief introduction in general location theory will be provided. The most basic location model is the Weber Location-Production model, which is visible below in figure 2.5.1 (McCann, 2001, p8). In this model a two-dimensional approach is chosen, based on profit maximization. The assumptions made by this model is that a firm is a point in space, the firm is a price taker, production factors are available and do not change with location. The locations of the most important raw materials in weight are provided with M1 and M2. M3 is the weighted output produced by the firm on the market location. K will be the optimal location of the firm. In this model every location is fixed, therefore it is a simple model based on lowering costs (McCann, 2001, p7).

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Figure 2.5.1 Weber Location-Production model

Source: (McCann, 2001, p8)

The Weber Location-Production model can be expanded bij adding the transport costs, which will shift the location of optimal point K in the direction of the most expensive good. This could be one of the inputs or the output. In our case plastics have a low weight and large volumes, which makes it more expensive to transport compared to the oil. Point K will then come closer to the market of plastic waste, to decrease those costs. Critism of the Weber L-P model is that assuming fixed locations for your raw materials and market output is not realistic, because of substition options and companies who will optimize their costs (McCann, 2001, p18).

Another interesting basic model for location choice is Moses Location-Production model, figure 2.5.2 (McCann, 2001, p20). In this model it is assumed that substitution (lower product costs) is a characteristic of firm behaviour. At the same time the distance to the market (M3) is constant, so an optimal location on line I-J is chosen, based on production and transport costs of M1 and M2. Point K is here the optimal location point.

Figure 2.5.2: Moses Location-Production model

Source: (McCann, 2001, p20)

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A remark on Moses Location-Production model is that the transport costs are only a small percentage of the production costs. Especially nowadays when the transport prices are really low and in a different economic climate than 50 years ago, when this model was applied. Other models based on different costs or theories could maybe better explain the location choice for an industrial company (McCann, 2001, p19).

The next basic model to explain is the Hotelling model of spatial competition (McCann, 2001, p28). Due to transportation costs, it is possible for a company to have some spatial monopoly power. Because you are the closest to the consumer this can be an competitive advantage over other companies. Companies have the incentive to compete different than in a price competition, on quality for instance. With changing their location they will try to benefit most from their location (McCann, 2001, p29). In figure 2.5.3 this Hotelling model of Spatial competition is explained and what the initiatives of the companies are.

Figure 2.5.3: Hotelling model of spatial competition

Source: (McCann, 2001, p32)

In this Hotelling game companies A and B, both have a spatial monopoly. Because of the same transport costs and expectation of the same production costs they have equal market shares. If company A has the iniative to expand its market share, it will move close to company B, therefore company A has more than 50% marketshare. Company B will then move to the other side of company A and have the bigger market share. This will continue untill both companies are settled in point X. At that point, none of the companies has the initiative to move. Therefore the companies cluster together, even if this is not optimal for the market. The market was better of with both the companies at location A and location B (McCann, 2001, p28).

The three basic location theories can help us explain the location factors which influence the location decisions of companies. In the next section, there will me more explained about the location factors for the chemical industry.

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2.6 Comparative advantagesNowadays, the location decision-making process is more difficult than before and not only based on fixed locations or close to the feedstock. Many location factors influence the decision process. The way companies compete can have influence on this location decision.

There are two ways to compete, one is a heavy price competition based on the lowest cost. The other option is what is visible in cluster. The competitiveness from a firm depends on its strategic ability to participate in a network, a whole supply chain or cluster (Roelandt et al., 1999). Minimizing the production costs as done in the Weber Location-Production model (section 2.5), is not the main reason any more of the choice of a location for the chemical industry. According to Porter (1990), companies need to search for competitive advantages instead of minimizing the production costs. More factors play a role in this decision making process.

Labor, land, capital, and entrepreneurship are the common production factors required to produce products or services, on which Porter (1990) adds infrastructure and national resources. In the past, it was enough to have an advantage like cheap labor, low land costs, or having cheap raw materials available. Those companies did not have the urge to innovate and become more efficient. Other companies have experienced selective disadvantages, needed to improve their technique by innovation and investments to create an advantage position for them (Porter, 1990). Midelfart (2000) explains how important comparative advantages are to choose an industrial location.

Porter (1990) explained with his ‘Diamond of National Advantage model’ the reasons that competitive advantages happen by four classified determinants. First, the factor conditions, which is the position of available infrastructure and skilled labor, for instance, which is the minimum to compete. Second, the demand conditions, this is the natural demand for the product or service from this particular industry. Third, the related and supporting industries present or absence and other competing firms. Fourth, the firm strategy, structure, and rivalry are important for the creation, organization and managing of the companies (Porter, 1990). This are the minimum condition needed to create some kind of advantage for a new industrial company.

Figure 2.6.1 Porters Diamond: Determinants of Competitive Advantages

Source: (Porter, 1990)

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Nowadays the most important factors of production are knowledge, investments and specialization (Porter, 1990). For example, pools of labor, and a raw material source, are now much easier to arrange because of the globalization, they are less important in the knowledge industries (Porter, 1990). Only the highly specialized and scarce factors contribute to competitive advantages, and they require huge investments (Porter, 1990).

Grether, Hotz & Mathys (2014) analyzed the main existing general industry location factors. His findings are based on an extension of the Heckscher-Ohlin model. To improve the explanatory power of the model he allowed in the model for differences between countries, imperfect competition, and transport costs. The Heckscher-Ohlin model (Bajona & Kehoe, 2010) is based on differences between countries, in production and labour costs. Therefore every country has a comparative advantage, and the consequence is that trade is born (Bajona & Kehoe, 2010). The importance of comparative advantage is endorsed by Porter (1990) and Grether et al. (2014).

Lundmark (2001) based his research on waste paper, because the supply chains are comparable with waste plastics. The paper industry is older than plastics, so it is interesting if plastics follow the same pattern as the paper industry. In the paper industry, the factories are first build close to the raw materials. Later on, because of recycling a lot of pulp entered the market, and the new factories are located on different locations, close by the markets. For the waste paper industry, the most important location factors are labor costs, market size, population density and agglomeration effect (Lundmark, 2001). His conclusion is that although the price of raw materials is important, more important for a location decision are market conditions, and the agglomeration effect.

ClustersMarket size and agglomeration effects are considered as the most important factors to choose a specific location (Lundmark, 2001). McCann (2001, p51) explains that the first observed location factor for the industry is clustering together in space. A couple of reasons can explain this behavior. Because companies do not have access to all the information, they assume that other companies know something they do not know, about the benefits of that specific location.

The other advantages of clusters are obvious when the definition of a cluster is given. “A cluster is seen as an economic network of strongly interdependent firms linked in a value-adding production chain” (Roelandt et al., 1999). Companies need to play an active role in clusters so they can help develop Porters diamond further and improve their competitiveness (Porter, 1990). Clusters have common characteristics like knowledge spillovers, innovation patterns (Roelandt et al., 1999) and more rapidly developing new technology (Porter, 2000). Clusters can offer development of efficient environmental strategies (Røyne, Berlin, & Ringström, 2014).

In the Netherlands, there are twelve large clustered industry groups. One of those clusters is the chemical cluster (Roelandt et al., 1999). Clusters vary widely, but at the same time the clusters are based on the same, beneficial expects of cluster networks. A chemical cluster is located around specific core competencies (Roelandt et al., 1999). Their research is based on improving material technology, which is an essential way of innovation. Because of the close interaction and cooperation, there is a lot of knowledge and information exchanged with customers, suppliers, and competitors (Roelandt et al., 1999).

Clusters benefit from available information (Porter, 1990), the specific knowledge and cooperation as universities, engineering companies, research institutes (Roelandt et al., 1999), and trade associations (Porter, 2000). Knowledge spillovers are identified to influence the location choice decision, by locating close to a university (Audretsch, Lehmann & Warning, 2005). At the same time, the competition leads to focus, flexibility and new ways of competing and finding new opportunities (Porter, 1990). Clusters can have multiple ways of intercompany links. Exchanging materials, energy, by-products or water make the companies work and cluster together (Røyne et al., 2014).

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According to Porter (2000) new business are formed in existing clusters rather than in an isolated location. There are multiple reasons to support this. First, in clusters, information about opportunities could encourage this development in that cluster. Second, the needed assets like skilled workers, greater efficiency opportunities, and inputs are often present at the location of the existing cluster. Lower entry barriers could contribute to choose a location in a cluster. Innovation of the new techniques has a preferred location for knowledge spillovers, like universities or clusters (Audretsch et al., 2005). Edquist (1997) adds that firms almost never innovate when they are located in isolation.

Plastic to oil manufactures should establish their plants close to the source of the material at a material recovery facility (Holmes, 2011). Clustering together can provide the plastic to oil company with feedstock and customers. However, companies need to have discussions with state and local governments about their business incentives and tax, because this can influence the location of the factory (Holmes, 2011).

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3. Research methodologyIn this chapter the used research methodology is explained. In the first section, the research context explains the research topic. The second paragraph contains the research method per sub question. In the third section, the research materials which are used are explained.

3.1 Research contextIn the Netherlands, multiple companies are trying to establish a plastic to oil factory. On this moment, all those companies are in the beginning phase in planning and try to obtain the needed permits. In other countries, many companies exist for already. In the Netherlands, we have constructed many waste-to-energy facilities with a high efficiency. Plastic to oil is a better solution for non-recyclable plastics than waste-to-energy10 but the question is what the government can do to support this. In multiple countries like Japan, the United States, and Switzerland, commercial and state owned plastic to oil companies are established, many years ago. From the location choice by those companies, we can learn more about the location factors that are necessary for plastic to oil companies. We can compare those location factors with the available location factors in the Netherlands. As explained before in section 2.6 chemical industry is clustering because of the numerous advantages. The expectation is that plastic to oil companies will join those chemical clusters. Therefore, it seems logical that the Dutch plastic to oil companies follow this pattern and locate on existing chemical cluster locations. Most of those clusters are located in Dutch seaports. Therefore, we expect the plastic to oil companies to establish in the Dutch Seaports. In the next section the research method of the empirical research will be further explained.

3.2 Research methodEvery sub question will contribute to answer the main question of this research. In this paragraph the research methods of the empirical research is further explained.

To obtain an answer to the first sub question to what extent is the technique of plastic to oil developed and desired is answered by a literature analysis. In this literature review the theoretical opinion about the relationship between plastic to oil and waste-to-energy is explained. An interview with a recycling expert11 could contribute to further explain the future vision for plastic to oil and identify that as a better option. Different interviews with two employees of (I&M)12 collaborated on more waste-to-energy information and more research opportunities. An application for an independent research is done, to investigate the relationship between plastic to oil and waste-to-energy.

The second sub question which location factors are conducive or necessary for plastic to oil companies and are they present in Dutch seaports is a combination of a desk research and empirical research. First, to gather a list with as many plastic to oil companies as possible, the search for the worldwide plastic to oil companies has led to many sources. This research, a desk research to newspaper articles, articles from scientific journals, websites, everything found is compared with two lists, founded on online forums (Investors Hub n.d.; Raging Bull n.d.). This list combined with information found in a research by the American Chemistry Council (Holmes, 2011) and a report from the United Nations Environmental Programme (UNEP), which provided

10 See section 2.4: Plastic to oil vs Waste-to-energy11 Interview with Recycling and Resources professor at the TU Delft, interviewed at the 3rd of October 2014. 12 Interviews with senior policy advisors at the directorate Maritime business, about waste, waste management, recycling and LAP 2, interviewed 2nd of June 2014. Senior scientific researcher at the Knowledge Institute Mobility, about prior research and circular economy, interviewed at the 19th of May 2014.

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more plastic to oil companies (UNEP, 2009), is the starting point. To complete this list the snowball method is used to increase the search range by using information found online on forums for instance and by adding companies found in journal articles searching for plastic to oil and location decisions. Many companies from the list had to be eliminated from this research for different reasons. They only use bio-based pyrolysis, or it is not sure if the companies still exists, or the company is only selling the technique and therefore not contributing in this research, or the location of the factory is not mentioned. From the company websites, more information is gathered and only companies who look like having a real pyrolysis factory stay on the list. Their exact location found on google maps, and the visible location factors are stated. The table of all the worldwide plastic to oil companies is visible in section 4.1. In appendix 2, in table 2.1 are the eliminated worldwide plastic to oil companies stated.

To gain an overview of the important location factors of plastic to oil companies is rather difficult. There is not any previous research available for the location factors of plastic to oil companies. Therefore, the research focuses on the location factors of chemical industry. The location factors found for the chemical industry are used as a basis in this research to find the location factors for worldwide plastic to oil companies. The location factors found in worldwide companies are compared with those found in the theory. In this list, the location factors are divided in three groups, namely necessary, conducive, and negligible. The list with possible location factors is used in the interviews with the Dutch plastic to oil companies. For those interviews a standard form is used which is presented in Appendix 5. The list with location factors for worldwide companies is compared with the necessary location factors for Dutch plastic to oil companies. The Dutch plastic to oil companies are found by articles in newspapers and connections of I&M13. The list with the necessary location factors for Dutch plastic to oil companies is compared with the available location factors in Dutch seaports. Both the lists of the founded location factors for worldwide and Dutch plastic to oil companies are compared with the available location factors in Dutch seaports. In the end a list is created that contributes to the conducive and necessary location factors for plastic to oil companies in the Netherlands.

The third sub question what kind of governmental policies are conducive or obstructive to the founding of plastic to oil companies in the Netherlands is more of a desk research. For the departments Maritime business and sustainability this is an important question. From the interviews done with the Dutch plastic to oil companies, other obstructive factors are identified. This is combined with a research to the policy of I&M. Papers for the House of Representatives are combined with advise from other research’s done by Dutch institutes to create an even level playing field between plastic to oil and waste-to-energy.

3.3 Research materialMultiple types of information are needed, namely scientific literature, policy documents, interviews, research reports, newspaper articles, books and seminar and presentations. The combination of those different types of data makes the triangulation of data possible. In this section below, more is explained about the interviews used in this research.

3.3.1 InterviewsDuring this research there were three moments where multiple interviews are used. In this paragraph this will be further explained.

At the start of the research multiple interviews are used to quickly gather more information and developing the research questions. Those seven interviews were all from departments of the Ministry of Infrastructure and the Environment. From those seven interviews six interviews are from the Sustainability directorate or the Maritime Business directorate. Every interviewed policy advisor is specialised on a different subject who is related with plastic to oil or circular economy. The subjects are in order: oil and seaports, circular economy, green deals, Circularity

13 In many of the interviews with I&M, names of Dutch plastic to oil companies are mentioned.

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Center and plastics, Dutch seaports and waste. The exception is the interview with a scientific researcher from the Knowledge Institute for Mobility14, who could explain more about prior researches done in this area by the Ministry and related research institutes. He pointed out interesting angles for the research questions and other employees who have a lot of knowledge about plastic to oil and the circular economy.

During the research additional interviews are used for multiple purposes. An interview with a business developer from the Port of Rotterdam15 has contributed by receiving advice about the interest of the Port of Rotterdam in the business case of plastic to oil. The interviews with a biofuel policy advisor16 and the researcher from the Bureau for Economic Policy Analysis17 are used to become further informed about oil, biofuels and recycling of plastics. The Port of Amsterdam has a special project manager18 which supports the plastic to oil companies to start in their port. The last interview with a recycling specialist19 discussed his view for the future and explained more about recycling from plastics, the role for plastic to oil, techniques to improve the quality and waste-to-energy. This interview was based on a recent presentation where a couple of question came up.

The last interviews are with the starting plastic to oil companies in the Netherlands. All the information gathered about eight possible plastic to oil companies are verified, by taking contact with the companies. The four remaining companies actively working on start-ups are then contacted to be interviewed. The interview was open, but a list with questions was used to gather the same information with all the companies. This list is available in Appendix 5.

The first company interviewed was Pyroil International20. Pyroil International is a plastic to oil start-up which will locate itself in the Port of Moerdijk for dashboard recycling. The second interview is with Energy Vision21, a department form a company who is building ships in the province of Groningen. The third interview is with BlueAlp BV/ Petrogas22 from Eindhoven. Those companies can provide the plastic to oil technique and design a production chain in the Netherlands. The fourth interview is with Bin2barrel23 a plastic to oil start-up in Amsterdam. Their desired location is in the Port of Amsterdam.

In the end of the research the completed list with possible location factors are verified. Except reviewing the list with location factors, the development of the company is discussed. Therefore, an accurate list and company information is available.

14 Interview with senior scientific researcher at the Knowledge Institute Mobility, about prior research and circular economy, interviewed 19th of May 201415 Interview with business developer of the Port of Rotterdam, interviewed on the 26th of May 2014. 16 Interview with senior policy advisor at the Biofuels department at the Ministry of Economic Affairs, interviewed 2nd of June 2014. 17 Interview with researcher of the Climate change, Energy and Environment department at CPB Netherlands Bureau for Economic Policy Analysis, interviewed 6th of June 2014. 18 Project manager New Business at the Port of Amsterdam, interviewed 16th of July 2014. 19 Recycling and Resources professor at the TU Delft, interviewed 3rd of October 2014. 20 Commercial director of Pyroil International, interviewed at the 5th of August 2014. 21 Commercial advisor of Energy Vision, interviewed at the 6th of August 2014. 22 Commercial director of BlueAlp BV and project manager at Petrogas, interviewed on the 15th of August 2014.23 Founder of Bin2Barrel, interviewed at the 19th of August 2014.

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4. Location factorsIn this chapter the research to the location factors for plastic to oil companies is done. In the first section, the locations from worldwide plastic to oil companies are explained. Then, the location factors chosen in this research will be explained and collected per company. In the third section, the outcome of this research is discussed. Followed, by the location factors from Dutch plastic to oil companies, which will be explained in section four. In paragraph five, the available location factors in Dutch seaports are discussed. Finally, in section six the conclusion of this chapter is stated.

4.1 Worldwide plastic to oil locations

4.1.1 IntroductionOn this moment, there are a couple of locations worldwide on which plastic to oil companies are located. Examples are in the United States, Japan, and Switzerland.

In the United States, the American Chemistry Council (ACC) provided a research in 2011 for plastic to oil companies (Holmes, 2011). In this research, a list with US plastic to oil companies and foreign plastic to oil companies is provided. As mentioned before, in section 3.2, the total list with worldwide plastic to oil companies is a combination from multiple resources. The list from the ACC (Holmes, 2011), and multiple newspaper articles are the starting point for the total plastic to oil company list in table 2.1 in Appendix 2. Those companies found, were traceable because of the recent information.

The expansion from the total plastic to oil list is based on adding information from lists found on online forums (Investors Hub n.d.; Raging Bull n.d.). All those sources together, gathered over hundred companies. Many companies found on those two forum lists are eliminated from this research, because they only use bio-based pyrolysis. Other possible reasons are if their exact factory location is not found, or if it is not sure if the companies still exists. Some companies have merged or seem not to be in operation anymore. The total list with plastic to oil companies is listed in table 2.1 in Appendix 2.

Some companies only sell the pyrolysis technique, and therefore, they do not contribute in this research. A list with the plastic to oil technique companies can be found in Appendix 3, Table 1. Another reason why companies are eliminated in this research is that the location of the factory could not be retrieved. A list with the remaining companies can be found in Appendix 3, Table 2.

Some companies of the list of the ACC (Holmes, 2011) cannot be traced anymore. If that is the case, they are left out of this research as well. The table with those company names can be found in Appendix 3, Table 3.

4.1.2 Worldwide plastic to oil companiesIn seven countries working plastic to oil installations are found with their factory location. Most of the factories are located in the US, but multiple countries in Europe have factories as well. In Table 4.1.2.1, a list with the worldwide locations of plastic to oil companies is stated.

All the companies in the list, as stated in the previous paragraph, are private owned commercial companies, except the companies from Japan. Almost two decades ago in Japan a new insight and vision was born. To stop litter and decrease the pressure on the landfill locations, therefore multiple recycling complexes were built. From those 12 recycling complexes, two are equipped with a plastic to oil installation.

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Table 4.1.2.1: Location information Plastic to oil companies

Plastic to oil companies - WorldwideCountry Name of the company City Prototype / factoryCzech Republic GB Pyrolysis Brno Factory

Germany Nill-Tech GmbH Holzgerlingen Factory

India Pyrocrat Systems LLP Mumbai Factory

Japan Mogami Kiki Co. Ltd. Shinjō-shi FactorySapporo Plastic Recycle Corporation

Sapporo Factory

Sweden Cassandra Oil AB Västeras Factory

Switzerland PlastOil Sihlbrugg Factory

United States Agilyx Tigard FactoryNexus Fuels LLC Atlanta FactoryPlastic Advanced Recycling Corporation

Willowbrook Factory

Plastic2Oil Niagara Falls FactoryRES PolyFlow Akron FactoryVadxx Akron Cleveland Factory

In the figure below, figure 4.1.2.2, the worldwide plastic to oil locations of factories are visible. All the green colored countries are the countries where the plastic to oil companies are located. The exact location of the plant is marked. In the US and in Europe, many locations are close. Therefore, there are two separated figures available. From the US, the figure is available in Appendix 4, figure 4.1 and the Europe figure is available in Appendix 4, figure 4.2.

Figure 4.1.2.2: Worldwide Plastic to Oil Locations

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4.2 Location factors per country

4.2.1 Chosen location factorsIn this research, many location factors are investigated. In this section, the chosen location factors are explained. The location factors are divided into five different groups.

Geographical characteristicsFor the geographical characteristics, all the possible modes of transport are taken into considerations. Therefore, the distance in km to a highway, train terminal, port, and airport are stated. Additional to those geographical characteristics is the distance to a university. According to Audretsch et al. (2005), new techniques and innovative companies are locating close to knowledge spillovers, so close to universities. Porter (1990) and Roelandt et al. (1999) agree and argues that knowledge is an import factor, which is explained in section 2.6.

Input and output location factorsFrom the theory in section 2.5, it is clear that companies are searching for an optimal location between input, production, and output factors. The Weber L-P model creates an optimal point between input and output product locations, based on the distance to available feedstock and the distance to the market to sell the output. The model takes transportation costs in account. In section 2.5, this is further explained.

The Input location factor is the availability and quality of the feedstock and the transportation costs to gather it in the factory. According to Porter (1990) and Lundmark (2001), the comparative advantage of plastic to oil companies is that they transform plastic waste in a valuable raw material. The location factor of the availability of feedstock is therefore added in section 4.2.2. Clustering together can provide the plastic to oil company with feedstock and customers (Holmes, 2011). Plastic to oil manufactures should establish their plants close to the source of the material at a material recovery facility (Holmes, 2011). A further explanation can be found in section 2.6.

The output location factor is called demand, and it explains if the product is certified. It is important if the polluting permits are satisfied for that particularly chosen country. If so, the output has more market value.

Agglomeration factorThe location factor for the surrounding of the chosen location is called the agglomeration factor. This factor explains if the company is located at a business park or if it is located at a chemical cluster. According to Lundmark (2001), companies tend to cluster together. Clusters have the advantages that they intend to innovate (Roelandt et al., 1999), and develop more and newer techniques (Porter, 2000). Røyne et al. (2014) adds that clusters can develop efficient environmental strategies. A further explanation is discussed in section 2.6.

Process location factorsAdditional needed location factors for the production are the required employees, pollution, and energy needs. Skilled workers are an important factor to create greater efficiency opportunities (Porter, 1990). Pollution is important for the chemical industry to receive permits for the factory and production of plastic to oil. To choose a location, companies need to have discussions with state and local governments about their business incentives and tax prices, because this can influence the location of the factory (Holmes, 2011). Because plastic to oil companies are industry it is expected that they need to receive energy for the production process. Therefore, the location factor power supply is added.

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Financial location factorA financial location factor is added for the private companies. They need to make enough returns on their investment. According to Porter (1990), investments are important factors of production. Therefore, this financial location factor called capital costs is added.

Additional location factorThe size of the city where the plastic to oil company is located is also taken into account in this research. Lundmark (2001) finds this an important factor. The location factor is called population. The size of a city might be helpful to draw conclusions in the combination with other location factors.

The following location factors are chosen: geographical characteristics near by the location, clustering together, influence, and availability of feedstock, the location for the demand for oil, pollution regulations, employees needed, required power supply, and the capital costs. In section 4.2.2 all the chosen location factors are put in a table to compare the different location factors between the different plastic to oil companies. All the chosen location factors are visible in table 4.2.1.1. Some additional information is added in the table as well. For instance, the year of the establishment of the company, the number of plants available, types of plastics applicable for the company, types of output of the production process, and how polluting the factory is. This information is not directly needed to transform into a location factor, but it could give a better insight in the different companies.

Table 4.2.1.1: Chosen Location FactorsLocation Factors Factors InformationYear Date of first operationPopulation Size of the cityNumber of plants Number of plantsGeographic characteristics

Highway (distance in km) Distance to the closest highwayTrain (distance in km) Distance to the closest train terminalPort (distance in km) Distance to the closest (sea)portUniversity (distance in km) Distance to the closest universityAirport (distance in km) Distance to the closest airport

Agglomeration Business park Located at a business parkChemical cluster Located at a chemical cluster

Feedstock Availability Availability of plenty waste plasticsTypes of plastics Types of plastics applicable

Demand Certified Is the output certified oilProduct Percentage of different output

Pollution Country emission criteria Available permitsPollution Explanation about polluting risks

Employee X Skilled employees necessaryPower supply Needed Necessary energy needsCapital cost IRR; Quick return on investments Return time of the investments in

years

4.2.2 Plastic to oil companies per countryIn this section, the location factors for every plastic to oil company are identified. Per company a table is filled with important information on the location factors found. Special details of information about the company are written down in an introduction per company.

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Czech RepublicIn the Czech Republic is the factory of GB Pyrolysis established a little north of Brno. The company is located close to the highways in the two main directions in the Czech Republic. Brno is located in the eastern south of the Czech Republic, the distance to Prague is about 200 km. GP Pyrolysis is located at a business park. GB Pyrolysis is positioned close to almost all the location factors, except a port. GB Pyrolysis can handle many different types of plastic waste like PP, PE, LDPE, HDPE, PS, ABS, PUR, PES, Tires, Rubbers and a few more. The waste can be converted in multiple types of output, namely traditional diesel, poly-fuel (characteristics similar to diesel, poly-gas, and carbon black. GB Pyrolysis is also setting up a plastic to oil plant in Slovenia. All the location factors of GB Pyrolysis are stated in Appendix 4, in table 4.1.

GermanyNill-Tech GmbH is located in the southwest of Germany and 28 km south of Stuttgart. For ten years, this company is making oil out of waste plastics. All the location factors of Nill-Tech are stated in table 4.2, in Appendix 4. From 1-ton waste plastic, they can produce 950 liters oil. The feedstock from Nill-Tech is coming mainly from the automobile industry and the cosmetic industry.

IndiaThe company Accpre Engineering is located in Hyderabad. The company is located in the city, however not so close to the highway. The problem with India is that their transportation system and legislation is entirely different. Only a few roads are from asphalt, the rest is not. Therefore their transportation possibilities are completely different than in developed countries. Together with the dated information online available about the location factors, Accpre Engineering is left out of this research.

JapanThe first plastic to oil company from Japan is Mogami Kiko. The company is located in a recycling complex in Shinjō-shi. It is located in the middle of Japan on the main island. The company is located in an area with mountains. Mogami Kiko is located only 3 km away from a bigger road, but unfortunately further away from a real highway. The location factors of Mogami Kiko are stated in table 4.3 in Appendix 4.

The second plastic to oil company in Japan is Sapporo Plastic Recycle Corporation. This company is part of a recycling complex in Sapporo (Legislative Council Secretariat, 2006). A website is not found, but because a location is available and the companies in Japan are stated owned and cooperative with other recycling companies in the same recycling complex, this location can contribute to this research. In table 4.4 in Appendix 4, the location factors of Sapporo Plastic Recycle Corporation are stated.

SwedenCassandra Oil AB is located 60 km west from Stockholm. It is located near inland water, but not directly on the sea. Their oil is sold on the open market. Cassandra oil has long-term contracts with partners in the waste management business to ensure enough feedstock. The location factors are stated in table 4.5 in Appendix 4.

SwitzerlandPlastOil AG is located 15 km south of Zurich. One kilogram of plastic is transformed into one liter of fuel. A PlastOil factory is only build if there is enough feedstock available, therefore, a location is chosen based on a plastic source point of view. The standard PlastOil factory will have three lines of plastic to oil machinery available. This results in a high standard of production at all times. If there are only non-recyclable waste plastics from households available, then around 400,000 households are needed for enough plastic waste. All the location factors are mentioned in table 4.6 in Appendix 4.

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United StatesIn the United States (US), there are multiple locations. Almost all the locations are in the northern part of the US. The earlier mentioned research done by the ACC, is about the economic impact of plastic to oil in the US (Rose-Glowacki, Moore, Swift & Sanchez, 2014). In the US, a maximum of 600 PTO facilities can be build, which accounts for almost 39,000 jobs. The direct and indirect economic value is expected up to 30 billion dollars, with an additional annually economic value of two billion dollar (Rose-Glowacki et al., 2014). In the US, a couple of supporting measures are available, like job creating taxes or agriculture grants when we talk about locating in a rural area (Holmes, 2011). Other factors that help create an interesting investing climate are supporting investments in green technologies, investments in alternative fuel production opportunities, rising fuel costs and the vision to support the increase in recovery and recycling goals of plastics (Holmes, 2011). The US companies are stated in alphabetical order.

The first company in the US, Agilyx in Portland is established in a business park with many technical companies. Most of the surrounding companies are based on electronics. Agilyx is located southwest of Portland and it is located close to a highway. The other geographical factors located close to Agilyx are a river, a port, and a train terminal. A priority of Agilyx is to ship waste only for short distances. The project development starts with a feedstock analysis, followed by a permitting strategy, then a site assessment, and lastly secures feedstock agreements. An average of 8.5 until 10 pounds of plastic waste generates approximately one gallon of synthetic crude oil. The location factors are stated in table 4.7 in Appendix 4.

The second US company, Nexus Fuels LLC is a company located in the city Atlanta. Nexus Fuels is located at a business park surrounded by many depots and less than one km away from a huge transportation center, which has enormous rail capacity. At the same time, the company is located close to highways in all the desired directions. The output of Nexus Fuels is a mixture of naptha (light hydrocarbon oil), gasoline, kerosene, diesel, and a heavy oil/wax. The location factors are stated in table 4.8 in Appendix 4.

The third plastic to oil company in the US is the Plastic Advanced Recycling Corporation, which is located in Atlanta. All the geographical location factors are close by. The company produces 4605 gallons of oil and 4.5-ton carbon black out of 30-ton plastic. The location factors are stated in table 4.9 in Appendix 4.

The fourth US company is Plastic2Oil and is located in the New York part of Niagara Falls, close to Canada. It is located next to a river, but the river is not directly connected to a sea, only some lakes. There is no port in the neighbour. The interstate is close and the same accounts for a train terminal. Plastic2Oil makes green jobs possible, from one kg of unwashed, unsorted waste plastics can Plastic2Oil produce one liter of oil. In table 4.10 in Appendix 4 are the location factors of Plastic2Oil stated.

RES PolyFlow is the fifth plastic to oil company in the US and is located in the city of Akron. It is located on a business park with many research centers and buildings of the government. PolyFlow is located next to the University of Akron. An airport is located close by with connections to many routes to eastern US locations. At the same time, many railways are close, with many connections in all the possible directions. In table 4.11 in Appendix 4, are the location factors of RES PolyFlow stated.

The sixth plastic to oil company in the US is Vadxx, also established in Akron. Vadxx is established on the border of a business park, but also not so far away from houses. The company is also located next to the University of Akron and the same counts for a node for the Interstate in all possible directions. An airport is located close to Vadxx with many routes to eastern US locations. At the same time, many railways are close, with many connections in all the possible directions. On average, about 10 pounds of plastic waste can create 1 gallon of oil, 2 pounds of

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fuel gas and 1 pound of inert char. The oil is delivered to liquid terminals, fuel blenders, and wholesale marketers. Everyday 6 till 12 trucks deliver the plastics. The location factors of Vadxx are mentioned in table 4.12 in Appendix 4.

4.3 Location factors plastic to oil companies worldwide From the research in the previous section, a list with location factors is formed for the existing plastic to oil companies worldwide. In this list of plastic to oil companies, only the companies that provided information from the location of their factory are contributing in this research. For every location factor three possible options are available to determine the importance of the location factor. The categories are necessary, conducive, or negligible location factors.

PopulationFirst, the sizes of the cities where the plastic to oil companies are located are considered in figure 4.3.1. The cities vary from 12,000 inhabitants to 1.9 million inhabitants. The cities are entirely different, in size, location and in their surroundings. Plastic to oil companies can get the feedstock from two different waste producers: municipal waste or industrial waste (Panda et al., 2010). A city with only 12,000 inhabitants seems too small to have their own plastic to oil company. Nevertheless, if there are enough surrounding cities or companies, which produce plastic waste, it seems possible.

Figure 4.3.1: Population

< 20 20 - 50 50 - 200 > 2000

1

2

3

4

5

Population

People (x1000)

Num

ber

Geographic characteristics The geographic characteristics explain the distance between the plastic to oil facility and a mode of transport, as a highway, train terminal, port, or airport. The availability of a university is also a geographical characteristic. The first geographical factor is the distance to a highway. In figure 4.3.2, the distance to a highway is stated for all the plastic to oil companies. From this figure, we can conclude that almost all the companies are very close positioned to a highway. The only exception is Mogami Kiko from Japan, which is located in the mountains in a part of Japan where there are no highways. The only thing to consider is that highways are close to economic activities. A plastic to oil factory could have the same reason for locating close to economic activity. Therefore, the conclusion is that it is likely that a highway is close by, and therefore it seems to be a necessary location factor, but further research is necessary to see if there is an underlying relationship.

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Figure 4.3.2: Highway Distance

< 3 3 - 6 7 - 10 > 110

1

2

3

4

5

6

Highway distance

Distance in km

Num

ber

After the geographical location factor highway, the next factor is distance to a rail terminal. For all the plastic to oil companies, the distance to the nearest train terminal is investigated. Most of the plastic to oil companies are located on a business park, and outside of the cities. In many cases, there was a rail terminal close by. The distance measured is the distance to a rail terminal or company owning a transport facility for the departure from trains. In figure 4.3.3, the train distance between the plastic to oil companies and terminals is visible. From the figure, we can conclude that most plastic to oil companies are located nearby a train terminal. Nevertheless, the same question arises as before, is this location chosen because of the distance to a train terminal or is another factor influencing the location decision. The train terminal and a plastic to oil company need much space and cargo transportation is often located outside of big cities on business parks. Therefore, although at almost every location a train terminal is nearby, it is unlikely that they use it for the transport of plastic waste or the oil. Railway transport is more expensive than transport by truck for smaller distances. For high volumes over larger distances (over 200 km), railway transport is competing with transport by truck. For smaller distances, this is not the case. Therefore, it is likely that the location factor for train distance is negligible.

Figure 4.3.3: Train Terminal Distance

< 3 3 - 6 7 - 9 > 100

1

2

3

4

5

6

Train Terminal distance

Distance in km

Num

ber

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The third geographical location factor is the distance to a port. The distance is taken from the plastic to oil company to the nearest port. The two port functions for a plastic to oil company are a transport node, and an economic activity center to produce plastic waste. Another benefit of a port is that it can be used to sell the fuel after the pyrolysis process. In figure 4.3.4, this port distance is showed. There are huge differences between the different plastic to oil companies. If the plastic to oil locations are inland, they can easily have distances from over 400 km. Transporting plastic waste is costly, therefore it is unlikely to move the waste plastics over larger distances. If these huge distances appear, it eliminates the option that plastic waste is shipped by a port. The two remaining port functions are only a considerable option if the plastic to oil company is close enough to the port. Therefore, the location factor port distance is likely to be a conducive factor. For some companies it can be import, but for others it is not.

Figure 4.3.4 Port Distance

< 10 10 - 50 50 - 100 > 1000

1

2

3

4

5

Port distance

Distance in km

Num

ber

The fourth geographical factor is the distance to a university. This location factor is chosen because there are multiple reasons why locating near a university could be interesting. First, a university could influence and support the quick development of new technology. Second, in the neighbor or city of a university the level of high skilled workers is higher. All the positive influences of a university can be helpful in further developing the plastic to oil technique.

In this case, there are many differences between the location distances for universities. Some plastic to oil companies are located almost on the university property while others seem to have no connection with a university or are at least located far away from an university. The universities from the Czech Republic and two of the US universities are located very close, while the universities in Japan are far away. In figure 4.3.5, the university distance is showing the distances between universities and plastic to oil companies.

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Figure 4.3.5 University Distance

< 3 3 - 10 10 - 20 > 200

1

2

3

4

5

6

University distance

Distance in km

Num

ber

Most of the time, universities are located in bigger cities, but comparing the size of a city and the university distance is not showing a convincing pattern. Assumed is that small cities are till 50.000 inhabitants, middle cities between 50,000 and 200,000 inhabitants and big cities are over 200,000 inhabitants. In figure 4.3.6, the university distance and population of cities are compared. However, the figure is not showing a convenience pattern. Although it seems that a plastic to oil company is located further away from a university in smaller cities, it is not entirely different in middle and large cities. On average, the distances to a university are smaller in middle or large cities, nevertheless, this is not for every city. An explanation could be that universities contribute in the development of the plastic to oil technique. Nevertheless, when the technique is developed, other plastic to oil companies can easily locate further away from universities.

If small cities have enough industrial waste or surrounding cities there could be enough plastic waste available for a plastic to oil company. Although, most universities are not located in small cities, the plastic to oil companies are found in small and in big cities. However, the distance to a university can be quite far. Therefore having a university close by located is likely a conducive factor.

Figure 4.3.6: University Distance and Population

small

small

small

small

small

middlemiddle

middlemiddle

large

large lar

ge0

10203040506070

University distance and population

Population in PtO city

Dist

ance

in k

m

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The fifth geographical factor is airport distance. It is unlikely that plastic waste will use an airport as transportation method to a plastic to oil company. However, an airport could buy the fuel after the pyrolysis process. There seems no pattern in the distances between the different countries or plastic to oil companies compared with the distance to an airport. In figure 4.3.7, the distance from a plastic to oil company to an airport is stated. In the future, it could be possible that the oil of the pyrolysis companies has the quality, needed to blend kerosene. It is unlikely that airline companies are waiting in line for the oil of plastic to oil companies. It is a big step, there is more expected, and risks in flying than in the shipping business due to fuel. Therefore, airport distance is likely to be a negligible location factor.

Figure 4.3.7 Airport Distance

< 10 10 - 25 25 - 40 > 400

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Airport distance

Distance in km

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AgglomerationFor the agglomeration location factor we expect from the theory that the location of a plastic to oil company is close to the collection of the plastic waste. Because waste plastics are light and voluminous the transport costs are an import source of costs. The Weber Location-Production model and Moses Location-Production model (section 2.5) support this, that an optimal location close by is necessary. The Hotelling Model of Spatial Competition (section 2.5) and comperative advantage theory from Porter (section 2.6) explains that similar companies tend to cluster, because of the numerous advantages. Therefore we expact that pattern in the agglomeration location factor of plastic to oil companies. Pyrolysis is a chemical process, so it can be expected to cluster with chemical companies or cluster with waste recycling companies. Both options provide feedstock for the company, and are likely to occure. Plastic to oil is a chemical process and it is unlikely that a plastic to oil company will receive a permit to locate in a residential area, because of the allocation plan. Therefore the agglomeration factor of a business park seems necessary.

In the previous paragraph, the expectation of the agglomeration factor for business parks and chemical industry are explained and now compared with the noticed agglomeration factor with worldwide existing plastic to oil companies. The agglomeration factor business park and chemical industry explais more about the surrounding companies from the plastic to oil company. All the plastic to oil companies are located in business parks. The surrounding companies differ a little, from technological parks, to warehousing parks, or even chemical industry. However, the plastic to oil companies in Japan are located at recycling clusters. The companies in Sweden and Plastic2Oil in the US are located at chemical industry clusters. Therefore, there remain two additional possibilities, a cluster on a chemical industry location, or cluster on a recycling location. Both those possibilities are visible in different countries, therefore both are likely to be conducive.

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FeedstockThe feedstock for plastic to oil companies has two categories. The first category is municipal waste and the second category is industrial waste (Panda et al., 2010). Companies can use one category or mix them up. For the municipal waste, estimates from the Swedish company Cassandra Oil are available about the amount of waste necessary for a plastic to oil factory. The company needs around 400,000 inhabitants to make sure enough plastic waste is available. Therefore, it seems unlikely that a city of only 12,000 inhabitants is big enough to use municipal plastics only from their own city. Using industrial plastics or importing plastic waste are options to ensure the availability of enough plastic waste.

The plastic to oil concept is completely based on the availabilty and affordability of waste plastics nearby. According to the Weber Locantion-Production model (section 2.5) the optimal location of a plastic to oil company is expected to be closer to the source of waste plastics, then the location of the output market. This is because plastic waste contains large amount of air, is light weighted and volumious. A kg of plastics takes more volume than a liter of oil, therefore the optimal location is closer to the available location of the plastic waste.

From the worldwide plastic to oil companies six companies have mentioned that their feedstock is the most important deteminant of the location decision. The plastic to oil companies from Japan are positioned as a recylcing cluster as a whole. The location decision of the recycling cluster is also based on the availability of feedstock. The other companies haven’t mentioned it, but because waste plastics are their core business, we can assume that waste plastics are necessary and important. Therefore the availability of the feedstock is a necessary location factor.

End Product The end product of the different plastic to oil companies are comparable. Although the output can differ a little, because of different pyrolysis systems and different input plastics, the quality is still comparable. However an official quality control is important. A certified product has a larger market value and is easier to sell. Only a couple of plastic to oil companies have mentioned the certification of the product. Although only a couple of companies mention this criterium, it is still a conducive factor.

Besides the quality of the output, the oil, it is important to locate close enough to the sales market of the oil. If the oil is applicable as fuel for ships, than a location nearby a bunker port is needed. If the target group is kerosene, than the location needs to be close enough to an airport. For private companies, it is urgent to have customers for the output, to be a healthy, longlasting private company. Therefore the location decision is influenced by the sales market of the output, which makes this a necessary location factor.

PollutionThe pollution location factor is devided into two different groups, the country emission criteria, and how polluting the used pyrolysis technique is. The country emission criteria are the criteria that a company has to obey with their production emissions. The emissions should meet the handed permits the country has sold or given the company. So every company in the country has to obay the same regulations and emission critera.

The other factor is how polluting the used pyrolysis technique is. For example, the US companies only need a regular CO2 permit, because the used pyrolysis technique is clean. This pyrolysis technique could be less polluting than other chemical companies. The pyrolysis technique used is clean and less polluting than burning waste. Therefeore, only a standard permit is needed in most of the countries in this research. However, for a different technique, or starting the first plastic to oil company in a country could determine the need of an extra license to operate. Therefore, the emission criteria is a conducive location factor.

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StaffThe pyrolysis machinery is not labour-intensive, so only a few employees are needed for the factory to run 24/7. Most of the plastic to oil companies bought or hired the pyrolysis machinery so specialized developers are not necessary. The staff location factor is therefore conducive and is less important.

EnergyMost of the energy needed for the pyrolysis process can be retrieved from the oil (end product) of the pyrolysis process it self. Besides from the energy needed for the start-up, only a few pomps are electricity driven. For the rest of the energy comsumption, the produced oil or gas can be used. Therefor, there is not a huge energy need, so the assumption made here is that this energy need will easily be furfilled on any location. The energy location factor is negligilble and less important.

Capital costsFor privately owned plastic to oil companies the return on investments is more important than for a government owned company. In Japan all the plastic to oil companies are built on recycling parks and government owned, so the return on investments is less important. Although they will benefit from a quick return on investments. Except for Japan and Sweden where the return on investments are not mentioned, for the rest of the companies we see differences between 1 year and up till 4 years. In the graph below, figure 4.3.8, the quick return on investments of the worldwide plastic to oil companies are stated. Besides the economic motive, the other motives are green (less polluting) energy, and a solution for plastic waste.

Many earlier mentioned location factors have influence on the returns of the investment. The distance between the location of the plastic to oil company, the source of the plastics and the sales market, together with the affordability of the plastic waste are the cost intensive factors. Keeping them low, will make the returns on investment higher. As an additional note, the fiscal climate has an influence on the company results, and on the returns of investments as well. For private companies the returns on investments are imported, so it is a conducive factor.

Figure 4.3.8 Quick Return on Investments

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IRR in years

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Concluding remarksIn this research, the following location factors seemed to be important to the existing plastic to oil companies for the location decision of new plastic to oil companies. In table 4.3.9, the entire list of location factors is mentioned, including the importance of the factor.

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Table 4.3.9: Location factors of worldwide companiesLocation Factors Factors Importance of the factorGeographical characteristics

Highway (distance in km) NecessaryTrain terminal (distance in km) Negligible Port (distance in km) ConduciveUniversity (distance in km) ConduciveAirport (distance in km) Negligible

Agglomeration Business park NecessaryChemical cluster ConduciveRecycling cluster Conducive

Feedstock Availability NecessaryDemand Certified Conducive

Sales market NecessaryPollution Country emission criteria ConducivePower supply Needed NegligibleCapital cost IRR; Quick return on investments Conducive

In this section, the location factors, which are found by a research of the existing worldwide companies, are integrated. Although there are some differences between the different countries, they are not taken out of this research because it helps explaining the different decision methods for a location decision for a plastic to oil company. In the next section, the previously founded location factors will be compared with the requested location factors for Dutch plastic to oil companies.

4.4 Location factors Dutch plastic to oil companiesAfter examining the location factors for worldwide plastic to oil companies, it is time to focus on the Dutch market. In the Netherlands, multiple companies are establishing plastic to oil companies. Some have the plastic to oil technique available themselves, while others buy the needed technique from companies who are specialized in the technique. On this moment, none of the companies has a working factory, but a few are working on their pilot facility or have one in a foreign country.

4.4.1 Dutch Plastic to oil companies The following companies in the Netherlands are working with a plastic to oil case, Bin2Barrel, BlueAlp, Energy Vision, and Pyroil International. All those companies cooperated with an interview about their business and location choice. In the beginning there seemed to be more plastic to oil companies, but at this moment they are not active anymore.

The results from the interviews with the four companies are discussed below. The interviews were open, but a list with questions was used, an example from that list is stated in Appendix 5. The main point for their location choice is close to the feedstock. All four of the companies based their decision of the region on the availability of the feedstock. Because plastics have large volumes but are light weighted it is important to transport it for distances as small as possible. Otherwise the transportation costs are becoming too high and that is not efficient for this recycling process. To find the final location, other location factors are also imported. Although, this factor seems like the most important condition, Bin2Barrel proves differently. Power supply is a negligible location factor, because only limited power is needed and that is available all over the Netherlands.

Bin2BarrelBin2Barrel is a plastic to oil company located in Amsterdam and planning to build their factory in the Port of Amsterdam. In an interview24 with one of the owners of Bin2Barrel more

24Interview with the founder of Bin2Barrel, interviewed at the 19th of August 2014.

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information about the company and their necessary location factors are given. The company has a company site in the Port of Amsterdam. Feedstock is an important factor, but other factors influenced Bin2Barrel so positively, that the location decision was primarily based on other location factors. The cooperation from the Port of Amsterdam and the province North-Holland influenced the company by supporting the company. Therefore, a location in the Port of Amsterdam was chosen. The chosen location is not based on the feedstock, but on the preferences of the Port of Amsterdam and the province. For Bin2Barrel the location of a Dutch Seaport provides benefits. An example is the import of large volumes of plastic from Ireland. Bin2barrel will sell the oil in and around the port area, as blended oil for ships or cars. In table 5.1 in Appendix 5, the location factors that are necessary for Bin2Barrel for the location choice decision are stated.

BlueAlp BV/ PetrogasBlueAlp, previously PlastOil, is a company marketed by Petrogas. The plastic to oil technology will be rolled out by BlueAlp BV. In an interview25 more information about the company, future plans, projects and their insight in the needed location factors are discussed. BlueAlp Innovations BV is owner of the pyrolysis technique. For every plastic to oil project BlueAlp supplies the systems and equipment for the client. BlueAlp BV and Petrogas provide the project development and technique. They can deliver and build the pyrolysis factory, and set up cleaning machines if this is necessary. BlueAlp BV is working on different projects in the Netherlands and Belgium. Although the systems are standardized as much as possible, every project is different. The common location factors observed by BlueAlp BV are stated in table 5.2 in Appendix 5.

Energy VisionEnergy Vision is a company a little different than the rest of the Dutch plastic to oil companies. Energy Vision made Biodiesel already with the pyrolysis technique from Siemens. At the same time they have a ship dockyard and build ships in the province of Groningen. The next challenge for Energy Vision is creating a new division, which is explained in an interview26. The challenge is to have a small pyrolysis device on their dock yard, which investors can visit. The final goal is to find enough investors to build a bigger pyrolysis machine on a ship, so they can fish for litter in the oceans. In table 5.3 the location factors from Energy Vision are stated in Appendix 5.

Pyroil InternationalPyroil International is a start-up which would like to locate in the port of Moerdijk (Havenschap Moerdijk). An interview27 with the owner of Pyroil International provided this information. Pyroil International would like to establish in Havenschap Moerdijk, because of the presence of a car recycling company. Pyroil International can collect plastic dashboards for free. For both the companies this is useful, because the car recycling business will get a higher recycling percentage and the plastic to oil company has free clean feedstock on large scale available. Therefore Pyroil International wants to establish their factory close by this recycling company to limit the transport costs. However, on this moment Pyroil International is still struggling closing their business case. In table 5.4 the necessary location factors are stated in Appendix 5.

The location factors are also divided in the three categories, namely necessary, conducive and negligible. The category is chosen based on the interview with the company to eliminate different opinions and to make it easy to compare. In the next paragraph the conclusion of the Dutch plastic to oil companies is discussed.

25Interview with the commercial director of BlueAlp BV and a project manager at Petrogas, interviewed on the 15th of August 2014.26Interview with the commercial advisor of Energy Vision, interviewed at the 6th of August 2014. 27Interview with the commercial director of Pyroil International, interviewed at the 5th of August 2014.

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4.4.2 Conclusion from the four Dutch plastic to oil companiesThe four Dutch plastic to oil companies have a couple of similarities. From the interviews with the four Dutch starting plastic to oil companies, the following location factors are important. In table 4.4.2.1 the important location factors are stated.

Table 4.4.2.1: Location factors Dutch Plastic to oil companiesLocation Factors Factors InformationGeographical characteristics

Highway NecessaryTrain terminal NegligiblePort NecessaryUniversity NegligibleAirport Negligible

Agglomeration Business park NecessaryChemical cluster ConduciveRecycling cluster Negligible

Feedstock Availability NecessaryDemand Certified Necessary

Sales market NecessaryPollution Country emission criteria ConducivePower supply Needed NegligibleCapital cost IRR; Quick return on investments Not clear yet

Geographical characteristicsFrom the geographical location factors only highway and ports are important location factors for the Dutch plastic to oil companies. For Bin2Barrel a port is more than a production location. The main function of a port, as a node in the transport chain (section 2.3.1), is for Bin2barrel the reason to locate in a seaport, while the other companies use it as a place for economic activity. The third reason to choose a port as a location is because the biggest seaports in the Netherlands are located in large urban areas. However, every company has a different reason for choosing a location in a port. Examples are desired location of the port and the province, port as a node, close to the feedstock or close to the demand customers. Highway and port are therefore necessary location factors for the Dutch plastic to oil companies. Train terminal, university and airport are negligible location factors for Dutch plastic to oil companies.

Agglomeration The next location factor is the agglomeration factor, which has three different categories: business park, chemical cluster, or a recycling park. From the Dutch companies only the business park agglomeration factor is important. All the companies are establishing on a business park in or near a seaport. In the Netherlands a chemical plant will not receive a permit and license if they are planning to build it in a residential area. Therefore a business park is a necessary location factor. The chemical cluster location factor is conducive, because half of the Dutch plastic to oil companies argue that this influence their location choice a little.

FeedstockThe feedstock location factor is important for the starting plastic to oil companies. The availability of enough affordable feedstock is important. Although every Dutch plastic to oil company is different, for every company is enough affordable feedstock important. Half of the companies locate close to their feedstock, while the other companies choose a location close to their demand customers. The companies that did mention the feedstock location factor as conducive instead of necessary are still in advance planning the availability of feedstock. The difference is that those plastic to oil companies are not locating close to their feedstock, but they do locate in the area. In the end it is likely that the feedstock location factor is necessary.

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Demand The demand of the plastic to oil companies is important. Most of the companies are trying to get the product certified. To have a stable and high quality is important for every Dutch company to be able to sell the oil. For most companies the oil is capable for the fuel for ships or cars. If the companies can prove a type of certificate it makes it easier to sell the oil. For half of the companies their location choice is based on distance to their customers, with the argument that the plastic waste is coming from different locations. Therefore a location nearby your own customers would limit the transportation costs. Many customers can be found in a port. The location factor demand is a necessary location factor.

PollutionAccording to the Dutch companies there is no pollution, except CO2 emissions. But official reports are not yet available. The pollution should be comparable with the country emission criteria in the Netherlands. Everywhere in the Netherlands the same permits apply, therefore this is not influencing the location decision. This polluting location factor is conducive because it is necessary to satisfy this pollution criterion, but at the same time it is not influencing the location choice within the Netherlands. If a plastic to oil company want to establish a factory in the Netherlands they have to satisfy this emission criteria, whatever location they choose. From the four companies, only two have the same technique, which means that three different pyrolysis techniques will be available in the Netherlands in the future. For all those companies the pollution should be investigated to draw better conclusions.

EmployeeThe Dutch companies believe that they will have no problems in finding enough qualified employees. Therefore, the location factor employee is unlikely to play a role in the location choice for Dutch plastic to oil companies and it is negligible.

Power supplyAlthough plastic to oil is a chemical process, only a limited amount of electricity is necessary. In every plastic to oil company some energy is necessary for the start of the pyrolysis process and for some smaller pumps. It is assumed that everywhere in the Netherlands this is available. Therefore power supply is unlikely to be a location factor for Dutch plastic to oil companies and is negligible.

Capital costsIt is difficult to make an accurate estimate when the business case is not clear. It is difficult for the companies to clarify the capital costs, like return on investments, because they have not started building the facilities. They are still in the design phase and waiting for the desired permits before being able to start building the facilities. However, for the companies it will benefit more if there is an adjustment made on the ladder of Lansink, by adding an extra step between recycling and waste-to-energy. Pyrolysis deserves a better status than it has now as some kind of combustion. In the US, under ISO 15270 pyrolysis is recognized as a form of feedstock recycling (Holmes, 2011). To create an even level playing field this should introduced in the Netherlands as well. Bergsma et al. (2014) explains the same advice to differentiate between feedstock recycling and waste-to-energy. In figure 4.4.2.2, this adjusted Ladder of Lansink 3.0 is stated. To adjust the status of plastic to oil, this will improve the business cases of the plastic to oil companies and less plastic will be burned.

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Figure 4.4.2.2: Adjusted Ladder of Lansink 3.0

Besides the location factors the Dutch plastic to oil companies explained more in the interviews about some hurdles they experience. This will further be explained in chapter five.

4.5 Available location factors Dutch seaportsFrom the interviews in the previous section, it becomes clear that all of the Dutch plastic to oil companies wants to establish their factories in Dutch seaports. In this section, all the location factors for plastic to oil companies are compared with the available location factors in Dutch seaports.

Chemical clustersIn the Netherlands, there are six chemical industry clusters at five different locations. In an alphabetic order: Botlek, Chemelot, Delfzijl, Emmtec, Pernis and Terneuzen (Vereniging van de Nederlandse Chemische Industrie, n.d.). Chemelot is located in Limburg, the southeast of the Netherlands and is not closely located to a seaport. The same accounts for Emmtec, which is located in the northeast and is not close by a seaport as well, but they are both located close to Germany.

The four remaining chemical industry locations are located in seaports. In the Port of Rotterdam to chemical clusters are located, Botlek and Pernis. They are located in the south-west region in the Netherlands. Delfzijl is part of Groningen Seaports, located in the northeast region of the Netherlands, and Terneuzen, part of Zeeland Seaports is located in the south-west of the Netherlands.

The chemical clusters in the Netherlands have much strength according to the Vereniging van de Nederlandse Chemische Industrie (2012). The main strengths that are important for plastic to oil companies are an advanced integration with refineries and pipeline systems, the transportation infrastructure, the mix with different companies and different products, a skilled workforce, strong universities and the culture of cooperation. The weaknesses of the Dutch chemical clusters are the costs of labour, limited number of start-ups and limited number of available engineers (Vereniging van de Nederlandse Chemische Industrie, 2012). As soon as the pyrolysis plant is built and working, only a few employees are necessary. Therefore, high labour costs can be limited.

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Dutch SeaportsFrom the four plastic to oil companies three have a desired location in a port, the Port of Rotterdam, Port of Amsterdam, and Havenschap Moerdijk. The Port of Amsterdam and the Port of Rotterdam are negotiating with the plastic to oil companies because they would like to have them on their grounds. The port of Amsterdam has a new business project manager to support new innovative companies, like a plastic to oil company. The fourth Dutch plastic to oil company is a little different and locating on their existing shipyard. From that location, they would like to build the plastic to oil machinery on a ship.

According to Ivan, Burgering, Van den Broek, Groen & Van der Meulen (2009) the Dutch seaports have many strengths. The most importance strengths for plastic to oil companies in a Dutch seaport are good geographical location with an expended waterway network, sustainable development, many supporting port facilities, developed logistical sector, high educated personnel, establishment opportunities, and the law and regulation. The many ships and companies make it possible that plenty plastic waste should be available if this is collected separated. From the Green deal Scheepsafval (section 2.2) it is stated that ships have to separate their plastic waste. This opens opportunities for a plastic to oil company in or near a seaport.

Besides of the overall strengths of the Dutch chemical clusters and the Dutch seaports, they have to be compared with the necessary and conducive location factors needed for plastic to oil companies. The negligible location factors are left out, because they have not proved their contribution to a location decision. In table 4.5.1 below, the necessary or conducive location factors are compared with the availability of them in the particular Dutch seaports.

Table 4.5.1: Location Factors of three Dutch SeaportsLocation Factors

Factors Port of Rotterdam Port of Amsterdam Havenschap Moerdijk

Geographic characteristics

Highway Yes Yes Yes Port Yes Yes YesUniversity Yes Yes Yes

Agglomeration Business park Yes Yes YesChemical cluster Yes Yes YesRecycling cluster

- - -

Feedstock Availability Yes, close from surrounding companies, city of Rotterdam and ships

Yes, close from surrounding companies, city of Amsterdam, ships and import

Yes, car recycling company

Demand Sales market Yes Yes YesPower supply Needed Available Available AvailableWillingness PtO in the port Yes, important Yes, important -

In the table above, pollution and the capital costs are not taken into account. The polluting location factor is out, because the regulations for permits and licenses are the same in the Netherlands. The capital costs are left out, because they are different per company, per location and which types of waste and technology is used. Therefore, an easy comparison is not possible.

All three of the Dutch seaports have a convenient score on the available location factors. From table 4.5.1 it is visible that on every basis element (necessary or conducive) in the list is satisfied by the Dutch seaports. From the geographical characteristics only highway and seaport are necessary location factors. Because university is a conducive location factor for worldwide plastic to oil companies, the availability of it in Dutch seaports is identified.

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In this table one additional location factor is included, the willingness of the port regarding to plastic to oil. As visible in the table, both the Port of Rotterdam and the Port of Amsterdam are supporting plastic to oil companies to establish in their port.

4.6 ConclusionIn this chapter, the location factors from many worldwide plastic to oil companies are discussed. Although, their a couple of different types of plastic to oil companies, more or less the same location factors are important to take the location decision.

The location factors are classified in three categories: necessary, conducive and negligible. The complete table 4.3.9 with location factors of the worldwide companies is stated in section 4.3. The most important, necessary location factors for the worldwide plastic to oil companies are highway distance, location on a business park, the availability of feedstock, and the availability of a nearby sales market. The necessary location factors are found with almost all the companies.

The conducive location factors are not found with all the companies, but are important for a few companies, and therefore they are called conducive. The conducive location factors are distance to a port, distance to a university, locate on a chemical cluster, locate on a recycling cluster, have a certified oil product, satisfy the country emission criteria, and have a high return on investments.

The remaining location factors seem negligible. Those factors are distance to train terminal, distance to an airport, and availability of power supply. Nevertheless, those remaining factors are not important for a location decision, however they could still be important for a company but be available on any location. For example, the power supply is a factor, which seems available on every location, because only limited energy is needed.

From the theory and the necessary location factors for the worldwide plastic to oil companies, multiple locations in the Netherlands are still capable locations. However, there are differences between the necessary Dutch location factors and the worldwide ones. In table 4.6.1, all the location factors are compared between the worldwide companies and the Dutch companies. In the fifth column the availability of the location factors from the Dutch seaports are stated. Table 4.6.1: Comparing location factors

Location factor Worldwide Netherlands Dutch SeaportGeographic characteristics

Highway Necessary Necessary YesTrain terminal Negligible Negligible YesPort Conducive Necessary YesUniversity Conducive Negligible YesAirport Negligible Negligible Yes

Agglomeration Business park Necessary Necessary YesChemical cluster Conducive Conducive YesRecycling cluster Conducive Negligible

Feedstock Availability Necessary Necessary YesDemand Certified Conducive Necessary -

Sales market Necessary Necessary YesPollution Country emission

criteriaConducive Conducive -

Power supply Negligible Negligible YesIRR; Quick return on investments

Conducive Not clear yet -

Willingness Location - Necessary Yes

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The location factors that are important for the Dutch and the worldwide companies are marked in green. The difference between Dutch companies and the worldwide companies are visible in red. The port location factor, the certified demand factor, and the willingness of a location are all marked in red. All the Dutch companies seem to locate in a seaport, while from the worldwide companies none of the companies is located in a port. The Dutch are known for their water and a lot of ports and port areas are available, compared to the international companies. A large part of the Dutch economic activities are involved in import, export and industry located on and by using the Dutch seaports. None of the other worldwide companies have the same economic structure as the Netherlands. The other factor is the certified demand. The European legislation and Dutch legislation have strict rules on chemical industry and the sales of uncertified fuels. Therefore receiving the certification is more important for the Dutch plastic to oil companies. The willingness of the Dutch seaports to establish a plastic to oil company in their port is growing. The two biggest seaports are putting efforts and support companies to establish on their grounds. This could contribute in the location choice in favour of a seaport.

The result from this research is to understand the location choice which plastic to oil companies make, to see if those are available in the Netherlands. Although, there is much to learn from the worldwide companies, there seem to be some differences between Dutch location choice and international location choice. Dutch seaports are the desired location for plastic to oil companies. All the necessary and conducive location factors come together in seaports. The other, most important location factor is the availability of feedstock which is available in or nearby the Dutch seaports. The other factors that influence the location decision of Dutch plastic to oil companies are highway distance, to locate on a business park, the availability of a sales market, and a certified product.

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5. Other factors influencing plastic to oil companiesBesides the location factors, other factors could influence the plastic to oil companies as well. If these are obstructive government policies, those policies should be adapted. Policies are necessary to adapt for obstacles and barriers. If they become those barriers, the policies could be outdated. In this chapter, other factors that are influencing the Dutch plastic to oil companies will be discussed.

5.1 Other factors influencing plastic to oil companiesFrom the different interviews with the Dutch starting plastic to oil companies, it becomes clear that other factors are influencing the Dutch plastic to oil companies as well. All four Dutch plastic to oil companies made a location choice decision already. At the same time, all the companies are still in the pre-building stage of the pyrolysis machinery. It seems a difficult step to close the business case.

In the interviews with the plastic to oil companies, it was clear that there are two different roles, which are expected from the government. On one hand, plastic to oil deserves the same attention as recycling and obstructive policies should be eliminated. The second role for the government is adding a recycling label like feedstock recycling for plastic to oil, as stated before in paragraph 4.4.

On this moment, there is not a policy about plastic to oil, pyrolysis or if there should become one. For recycling and waste-to-energy there are policies made to support this positive development. Many policies are about stimulating green growth or the circular economy. It is clear that those policies are based on green growth, eliminating waste and creating a more circular economy (section 2.2). The discussion in section 2.4 results in a clear answer why pyrolysis is better for the environment and maintaining the energy level from the plastic waste. Enough waste is available for the AVI’s, but waste plastics will be recycled on a higher level. However, Dutch policy is not cooperating with that. It seems that the level playing field is uneven between recycling, waste-to-energy, and plastic to oil. Because plastic to oil will contribute to a more circular economy and less waste, this should get a follow up.

Although many companies are trying to establish a business case around plastic to oil, or see it as a new opportunity from their current business, there is not a single factory built in the Netherlands. Some companies see this opportunity for plastic to oil for years, but none of those companies has actually started building.

Another point, which is already mentioned in section 4.5, is the willingness of the ports. While the willingness of a port is not a real location factor, it influences the location choice. Therefore, it is mentioned before. Nevertheless, the willingness of the Dutch seaports (Rotterdam and Amsterdam) is contributing to Dutch plastic to oil companies.

From the interviews, it is clear that the license process takes a very long time. More than half a year is long waiting time. This makes it difficult to establish a factory quickly, but on the other hand, it is a standard procedure in the Netherlands.

5.2 Government policiesFrom 2011 on, many government letters contain topics with recycling, the circular economy, green growth, or waste. Every policy has to consider the Dutch waste management plan (I&M, 2011). An example to reduce plastic waste is to prohibit free plastic bags in supermarkets (I&M, 2011). In section 2.2, many government letters are discussed. Examples like the plastic cycle value chain agreement (I&M, 2013b) and the green deal scheepsafvalketen (I&M, 2014a) have proven that this kind of agreements contributes to less waste and a better separated collection

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of waste (I&M, 2014b). Government policies are necessary when it is not economical profitable to recycle, but when it contributes to the social benefits (Netherlands Bureau for Economic Policy Analysis, 2014). Additional to the previous examples, other influencing policies influencing Dutch plastic to oil companies are discussed below.

A change in the Dutch policy is visible with the transition to a circular economy that waste is more than just a by-product, it needs to be handled like a resource (I&M, 2014d). To stimulate this in the Netherlands, a special program is established, namely “Van afval naar grondstof”, translated as ‘from waste to a resource’, which started in 2011 (I&M, 2013a). This Dutch policy is a reaction on the European policy from resource efficiency (European Commission, 2011). The main points from this Dutch policy are to treat waste like a resource, to tackle supply chains and waste flows for environmental improvement and improve the waste separation and collection (I&M, 2013a).

A plastic packaging tax is introduced in the Netherlands in 2008 to reduce the amount of used plastics. A different rate is made between primarily used plastics and secondary used plastics in the packaging industry (Netherlands Bureau for Economic Policy Analysis, 2014). Together with higher taxation on disposal (I&M, 2014b), waste-to-energy, pyrolysis and recycling are favorable over disposal.

Although there are many policies about a green, circular economy, plastic to oil is not mentioned in them. General policies are made about supporting new initiatives for social economic and technical developments and innovation to optimize the entire system (I&M, 2013a). Explained more specific, to optimize uniform and modernize the waste and environment policy (I&M, 2013a).

On this moment, there is not a fair level playing field between pyrolysis, recycling, waste-to-energy, and disposal. In the past, many AVI’s are built and plenty capacity is available in the Netherlands. The AVI’s have a protected status as a useful purpose, but plastic to oil installations do not have this same status. As written before in paragraph 2.4.1, pyrolysis is seen as incineration, while waste-to-energy is seen as some kind of recycling. This is not a fair level playing field (I&M, 2013c). In paragraph 4.4, an additional step on the ladder of Lansink can change this vision. Because plastic to oil contributes to a more circular economy this change of the green label of feedstock recycling seems necessary. The prices of waste-to-energy are extremely low, because the market is not at an efficient point. Although there are taxes on waste-to-energy and disposal, much waste is burned in installations.

However, a change is starting to get visible. An ambition of the government is to reduce the waste burned in AVI’s (I&M, 2011). The quantity of materials offered to the AVI’s or for disposal was in 2010 almost 10 million ton. Multiple changes like recycling, sustainable products, and different consumption patterns can contribute to lower the materials that leave the economy if other upcycling options are available (I&M, 2014b), like pyrolysis. A tax on disposal is a working example that less waste is offered for disposal (I&M, 2011).

Another ambition mentioned in (I&M, 2014b) is what the government could do to support plastic to oil is to start a green deal. This way, many companies are getting in touch and doors will be opened (I&M, 2014b). The ambition from I&M is to eliminate barriers from companies if they are developing circular processes (I&M, 2014b).

A new experiment with a different waste collection method, is handing in plastic waste and receive a deposit for a supermarket nearby (Dekkers, 2014). This experiment confirms new research to different collection methods and provides the availability of more plastic waste for plastic to oil.

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Other influencing government policies are the two fiscal encouragements by VAMIL and MIA (I&M, 2014a). These are two Dutch fiscal arrangements. The first, MIA is an Environmental Investment Deduction which the company can use to deduct investments till a maximum of 36%. The second, VAMIL is Random depreciation Environment investment, where the company can choose the date of depreciation. The ministry of I&M supports those two fiscal measures for green environmental-friendly investments (RVO, n.d.). On the Environmental list from 2014, a pyrolysis installation is mentioned (Agentschap NL, 2013).

In the past, it was simply collect large quantities, while nowadays multiple smaller flows are collected from the same location, but therefore it loses the economies of scale. The many different collection methods of waste in municipalities are inconvenient. Every municipality is optimizing their own waste collection method, so that economies of scale are not present. Every municipality is obligated to support a separated collection of plastic waste. Instead of optimizing the entire waste system every municipality is optimizing every separated waste chain (I&M, 2013a). To reduce the different collection methods, the entire waste collection system can be optimized (I&M, 2013a). Many different methods are available in the Netherlands and in other countries (Bergsma et al, 2014). Not every collection method has the same returns and the quality can differ. This could influence the available plastics for pyrolysis but it is not clear what kind of influence. Therefore, additional research is necessary.

Another disadvantage of different collection methods could be the willingness of the consumers. If every municipality has its own way it could be difficult to accept and contribute. A more uniform waste collection policy will tackle this hurdle (I&M, 2013a).

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6. Conclusion and discussionIn this chapter, the main question from this research will be answered. A conclusion regarding to which factors are stimulating the founding of plastic to oil companies in Dutch seaports. In the second part of this chapter a discussion about this research is explained.

6.1 ConclusionTo determine the location factors that are important for Dutch plastic to oil companies a review of worldwide plastic to oil companies is made. From the theory a list with location factors is developed. For every worldwide plastic to oil company with a factory location, the list with location factors is tested. Every location factors is classified in three categories: necessary, conducive and negligible. The most important, necessary location factors for the worldwide plastic to oil companies are highway distance, locate on a business park, the availability of feedstock, and the availability of a nearby sales market. The necessary location factors are found with almost all the companies.

From the theory and the necessary location factors for the worldwide plastic to oil companies, many locations in the Netherlands are still capable locations. However, there are surprisingly differences between the location factors of worldwide companies and the location factors of starting Dutch plastic to oil companies. In table 6.1 the differences between the location factors of worldwide plastic to oil companies, the founded location factors for Dutch plastic to oil companies and the availability of the location factors in the Dutch seaports. The similar important location factors are marked in green and the difference between the location factors are marked in red.

The outstanding difference between Dutch companies and the worldwide companies is the port location factor. All the Dutch companies seem to locate in a port, while from the worldwide companies none of the companies is located in a port. In the Dutch economy ports are more important than they are in other countries found in this research. This could help explain why in the Netherlands ports are important. Further research to the available location factors in Dutch seaports explains that all the necessary location factors are there. At the same time the largest two Dutch seaports support the plastic to oil companies. By their search to a more circular and renewing production they support the plastic to oil companies in their ports. The willingness of the two seaports and the available location factors making the difference between other location and the Dutch seaports.

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Table 6.1: Comparing location factorsLocation factor Worldwide Netherlands Dutch SeaportGeographic characteristics

Highway Necessary Necessary YesTrain terminal Negligible Negligible YesPort Conducive Necessary YesUniversity Conducive Negligible YesAirport Negligible Negligible Yes

Agglomeration Business park Necessary Necessary YesChemical cluster Conducive Conducive YesRecycling cluster Conducive Negligible

Feedstock Availability Necessary Necessary YesDemand Certified Conducive Necessary -

Sales market Necessary Necessary YesPollution Country emission

criteriaConducive Conducive -

Power supply Negligible Negligible YesIRR; Quick return on investments

Conducive Not clear yet -

Willingness Location - Necessary Yes

The other factor that differs between Dutch and worldwide plastic to oil companies is the certified demand. The European legislation and Dutch legislation have strict rules on chemical industry and the sales of uncertified fuels. Therefore receiving the certification is more important for the Dutch plastic to oil companies.

Together with the location factors port , certified demand and the willingness of a seaport, the other necessary location factors that influence the location decision for Dutch plastic to oil companies are distance to a highway, to locate on a business park, the availability of feedstock, and the availability of the sales market. The conducive location factors are the presence of a chemical cluster, and the country emission criteria. The remainder location factors are unlikely to contribute to the location decision process.

From the interviews with the Dutch plastic to oil companies it is clear that other factors are influencing the founding of plastic to oil companies as well. There seems to be an uneven level playing field between plastic to oil and waste-to-energy. Plastic to oil can be seen as a method of feedstock recycling. Although many policies are in favour of green, circular and recycling policies, the importance from plastic to oil is not visible. From different waste policies the main priority is to reduce waste and that waste is seen as a resource. Governmental policies can change these shortcomings. By optimizing the entire waste system instead of trying to optimize every new separated collected type of waste higher recycling targets can be satisfied.

The result from this research is to understand the location choice for founding plastic to oil companies in the Netherlands. Although, there is much to learn from the worldwide companies, there seem to be some differences between Dutch location choice and international location choice. Dutch ports are the desired location for plastic to oil companies. All the necessary and conducive location factors come together. The other, most important location factor is the availability of feedstock which is available on a nearby the Dutch seaports. The other factors that influence the location decision of Dutch plastic to oil companies are highway distance, to locate on a business park, the availability of a sales market, and a certified product.

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6.2 DiscussionIt is not surprising that the Dutch location factors are different then the location factors found in worldwide plastic to oil companies. The Netherlands is a unique country which differs in size, location, density of the population and the role as a transit country, compared to the other countries that have plastic to oil factories. Because of this difference, seaports are more important than they are in other countries. The port of Rotterdam is the largest port of Europe and therefore a lot of economic activity is stated in the port areas. With a high population density nearby the ports and many companies established in the ports, this explains the availability of large quantities of plastic waste. This factor is an important location factors and contributes to the location decision for Dutch plastic to oil companies.

In this research some limitations are available. Unfortunately, from many plastic to oil companies there is not a location of their pyrolysis factory available. The consequence is that they are eliminated from this research and the table 3.2 from the companies without a factory location is long. Although, every company found is approached to gather their factory location, this could influence the research a little. The number of plastic to oil companies is larger then used in this research.

Another difficult item is the lack of Dutch plastic to oil companies. The few Dutch plastic to oil companies are not in production yet, so it is more difficult to see if their expectations about the location factors are suitable for future companies. At the same time some of the Dutch plastic to oil companies were cooperating more than others, which makes it more difficult to draw conclusions. Fortunately the Dutch plastics to oil companies have made a location choice already and could explain this location choice. The companies have not mentioned other factors, except the influence of the government so the list with location factors seems complete.

The founded location factors for worldwide plastic to oil companies are supported by the founded theory. The difference between the Dutch and the worldwide plastic to oil companies seems truthful because of the different country elements.

Plastic to oil is a more recently introduced technique to convert plastic. More and more research is done about this topic. However, previous research about a location choice or location factors about plastic to oil companies is not done before. General location theories and location theory for chemical industry are used to examine the possible location factors for plastic to oil companies. This research contributes to the knowledge of the Dutch plastic to oil companies and some departments of the Ministry of Infrastructure and the Environment. More knowledge is gathered about plastic to oil, and it location factors.

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7. Recommendations Plastic to oil is an important circular step and therefore a factory should be established in the Netherlands. However, companies experience some difficulties in closing their business case. The Dutch government could eliminate some policies that form obstacles and barriers. At the same time supporting measures for plastic to oil within the waste hierarchy can developed. The first adjustment is to add an extra level in the Ladder of Lansink. By adding feedstock recycling, plastic to oil is a form of feedstock recycling and this eliminates the uneven level playing field within the Netherlands. In other countries is plastic to oil seen as feedstock recycling, so changing it in the Netherlands will contribute to an even level playing field.

Another way in which the Dutch government can support the plastic to oil companies is to set the first steps to create a green deal plastic to oil. In a green deal, many companies, institutes, investors, and municipalities cooperate on a general volunteering agreement. In this agreement, measures to support plastic to oil companies can be assembled. If obstructing policies exist, they can be adjusted. These appointments can contribute to quickly enroll a network, so the plastic to oil companies can be build.

Many policies contain the advice that the government should support new innovative techniques and initiatives. The establishment of the Circularity Center is a great circular initiative that the government can support. Especially because this center is established by the initiative from a cooperation of companies and support circular research, the government should support them by doing so.

On this moment, many different collection methods for municipal plastic waste are used, and this is not always leading to the best possible results. Every supply chain of additional separated collected waste type is optimized. The consequence is that many different collection methods can be used for all the different types of waste. Instead of optimizing the entire waste supply chain, this is a better solution. It is also better understandable for people to have the same collection methods instead of five differences. Another argument to support this vision of applying more similar collection methods is that this will enlarge the transparency in the waste collection market. Other countries have other collection methods that could optimize the entire supply chain for separated collection of waste. Those other collection methods of waste are interesting enough to reconsider. A better and more transparent collection policy could contribute in more support from inhabitants, which makes the higher recycling targets possible. More separated collection of plastic waste will improve the recycling value and the plastics available for plastic to oil.

Many company initiatives show that many people, companies, and foundations find a more circular economy important and want to eliminate plastic waste to conserve our environment. An example is that the first stores are opened in Europe, even in the Netherlands without any packaging materials. Those grocery stores sell the groceries in your own cans, bottles and cups. Therefore a lot of plastic and other packing materials are saved. The government should support green alternatives which changes behaviour in a positive way.

This research focusses on the location factors for plastic to oil companies in the Netherlands, and in Dutch seaports more particularly. Other factors that influence the founding of plastic to oil companies in the Netherlands are also mentioned. Future research can show a connection between the location factors found for Dutch plastic to oil companies and the eventually chosen location.

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Appendix 1 - Interviews

Ministry of Infrastructure and the EnvironmentSenior policy advisor at the directorate Maritime business, about the connection between oil and seaports, interviewed at the 13th of May 2014.

Policy advisor at the directorate Sustainability, about the circular economy, interviewed at the 16th of May 2014.

Senior policy advisor at the directorate Maritime business, about the connection between green deals and the circular economy, interviewed at the 16th of May 2014.

Senior scientific researcher at the Knowledge Institute Mobility, about prior research and circular economy, interviewed at the 19th of May 2014.

Policy advisor at the directorate Sustainability, about plastics, Circularity Center and the ‘Ketenakkoord’, interviewed at the 21st of May 2014.

Coordinating policy advisor at the directorate Sustainability, about Dutch Seaports, interviewed at the 26th of May 2014.

Senior policy advisor at the directorate Maritime business, about waste, waste management, recycling and LAP 2, interviewed at the 2nd of June 2014.

Other interviewsBusiness developer of the Port of Rotterdam, interviewed at the 26th of May 2014.

Senior policy advisor at the Biofuels department at the Ministry of Economic Affairs, interviewed at the 2nd of June 2014.

Researcher of the Climate change, Energy and Environment department at CPB Netherlands Bureau for Economic Policy Analysis, interviewed at the 6th of June 2014.

Project manager new business at the Port of Amsterdam, interviewed at the 16th of July 2014.

Recycling and resources professor at the TU Delft, interviewed at the 3rd of October 2014.

Plastic to oil companiesCommercial director of Pyroil International, interviewed at the 5th of August 2014.

Commercial advisor of Energy Vision, interviewed at the 6th of August 2014.

Commercial director of BlueAlp BV and project manager at Petrogas, interviewed at the 15th of August 2014.

Founder of Bin2Barrel, interviewed at the 19th of August 2014.

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Appendix 2 – Total list plastic to oil companies

Table 2.1: Total list with plastic to oil companiesCountry Name of the company City InformationAustralia Pacific Pyrolysis Pty Ltd Somersby Prototype

Canada Klean Industries, Inc Vancouver Technique onlyNew Fuel Systems Inc No LocationJBI Global Inc Niagara Falls Technique

China Anhui Oursun Environmental Hefei No factory locationDinter Heavy Industry Machinery Co. Ltd.

Henan Technique

Pyrolysis Oil Shangqiu TechniqueXinxiang Xinda Energy Equipment Co.

Technique

Czech Republic GB Pyrolysis Brno FactoryPlast Oil Prague No location

Germany Alphakat PL Covanta TechniqueNill-Tech GmbH Holzgerlingen FactorySyntrol TechniqueTPL GmbH No factory location

India Accpre Engineering Pvt. Ltd. Hyderabad No location factorsBhagirath Equipments  No factory LocationPyrocrat Systems Mumbai TechniqueVipar Engineering New Delhi No factory locationZorba Industries No factory location

Ireland Cynar Portlaoise No factory location

Japan Blest co Ltd Hiratsuka-shi PrototypeMogami Kiko Co. Ltd Shinjō-shi FactoryOstrand Corporation Tokyo Technique Sapporo Plastic Recycling Co. Sapporo FactoryShonan Trading Co. Ltd Yokohama TechniqueYukaki Nagano-Shi Technique

Poland T Technology Kleszczów No factory location

South-Africa Graham Fuel Technology Pt Ltd No factory location

Sweden Cassandra Oil AB Västeras Factory

Switzerland Granit Systems S.A. No factory locationPlastOil Sihlbrugg Factory

Thailand Polymer Energy Circle Pines No factory Location

United Kingdom Cynar Plc Londen Technique

Harmonic Energy No factory locationPlastic Energy No factory locationVC Cooke No factory location

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Country Name of the company City InformationUnited States Agilyx Tigard Factory

Climax Global Energy Allendale FactoryEnvion Washington FactoryGEEP Barrie FactoryGreenMantra Recycling Technology

Factory

Kool Manufacturing Company No factory locationNatural State Research Stamford FactoryNexus Fuels LLC Atlanta FactoryNortheastern University FactoryPK Clean No factory locationPlastic2Oil Niagara Falls FactoryRecarbon corperation Wilkes Barre FactoryReklaim No factory locationRES PolyFlow Akron FactoryStandard Oil International Ltd. No factory locationVadxx Akron FactoryPlastic Advanced Recycling Corporation

Willowbrook Factory

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Appendix 3 – List with plastic to oil companies left out of the research

Table 3.1: Plastic to oil companies technique onlyPlastic to oil companies Technique only - WorldwideCountry Name of the company CityCanada Klean Industries, Inc Vancouver

JBI Global Inc Calgery

China Dinter Heavy Industry Machinery Co. Ltd.

Henan

Pyrolysis oil City Shangqiu

Xinxiang Xinda Energy Equipment Co.

Germany Alphakat PL Covanta

Syntrol Holzerglingen

India Bhagirath Equipments  Hyderabad

Pyrocrat Systems Mumbai

Japan Blest co Ltd Hiratsuka-Shi

Ostrand Corporation TokyoShonan Trading Co. Ltd. YokohamaYukaki Nagano-Shi

United Kingdom Cynar Plc London

Table 3.2: Plastic to oil companies without location of the factoryPlastic to oil companies - No factory locationCountry Name of the company ApproachCanada New Fuel Systems Inc Website Form

China Anhui Oursun Environmental Website Form

Czech Republic Plast Oil Website Form

Germany TPL GmbH Email

India Pyrocrat Systems Website Form

Vipar Engineering Website FormZorba Industries Website Form

Ireland Cynar Plc Website Form

Poland T Technology Website Form

South-Africa Graham Fuel technology Pty Ltd Email

Switzerland Granit Systems Website Form

Thailand Polymer Energy Website Form

United Kingdom Harmonic Energy Website Form

Plastic Energy Email

VC Cooke Email

United States Kool Manufacturing Company Email

Natural State Research Email

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PK Clean Website FormReklaim Website Form

Table 3.3: Plastic to oil companies left out although in ACC list (Holmes, 2011)

Plastic to oil companies Left out although in ACC list - WorldwideCountry Name of the company CityChina Anhui Oursun

Environment & Technology Corporation

Hefei, Anhui

Ireland Cynar Plc Central Ireland

Canada Klean Industries, Inc

Korea KOREA ECO-System Buchon City

United States Polymer Energy

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Appendix 4 – Location Factors worldwide pto companies Table 4.1: GB Pyrolysis – Czech Republic

GB PyrolyisHudcova 533/78c, 612 00 Brno http://www.gbpyrolysis.com/Location Factors Factors InformationYear 2004Population Brno 385,913Number of plants 45 worldwideGeographic characteristics

Highway (distance in km) 10 Train terminal (distance in km) 1Port (distance in km) >500 University (distance in km) 2Airport (distance in km) 23

Agglomeration Business park yesChemical cluster

Feedstock Availability Plenty availableTypes of plastics Plastics, rubbers, tires

Demand Certified YesProduct Diesel

Pollution Country emission criteria yesPollution No

Employee FewPower supply Needed Self-sufficientCapital cost IRR; Quick return on investments 3 years

Table 4.2: Nill-Tech – GermanyNill-Tech GmbHMax-Eyth Straße 23 D-71088 Holzgerlingen http://www.nill-tech.de/Location Factors Factors InformationYear 1992Population 12,268Number of plants 1Geographic characteristics

Highway (distance in km) 10Train terminal (distance in km) >1Port (distance in km) >500 University (distance in km) 31Airport (distance in km) 30

Agglomeration Business park YesChemical cluster Technological

Feedstock Availability AvailableTypes of plastics

Demand CertifiedProduct Oil, gas

Pollution Country emission criteria German emission lawPollution No CO2 pollution

EmployeePower supply Needed Capital cost IRR; Quick return on investments

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Table 4.3: Mogami Kiko – JapanMogami KikoFukudayama Fukuda Shinjō-shi, Yamagata-ken http://www.mogami-kiko.co.jpLocation Factors Factors InformationYear 2007Population 38,894Number of plants 1Geographic characteristics

Highway (distance in km) 60Train terminal (distance in km) 6Port (distance in km) 59University (distance in km) 64Airport (distance in km) 46

Agglomeration Business park YesChemical cluster Recycling cluster

Feedstock AvailabilityTypes of plastics Thermoplastics

Demand CertifiedProduct Hydrocarbon Oil (79%), Solid

Residue (14%), Off-gas (12%)Pollution Japan emission criteria Approved by National federation

Pollution CO2 decreaseEmployeePower supply Needed Capital cost IRR; Quick return on investments

Table 4.4: Sapporo Plastic Recycle Corporation - JapanSapporo Plastic Recycle Corporation〒003-0849 Hokkaido Prefecture, Sapporo, Shiroishi Ward, Kitago, 2357−10Location Factors Factors InformationYear 1998Population 1,918,096Number of plants 1Geographic characteristics

Highway (distance in km) 2Train terminal (distance in km) 4Port (distance in km) 27University (distance in km) 10Airport (distance in km) 42

Agglomeration Business park YesChemical cluster Recycling cluster

Feedstock AvailabilityTypes of plastics Waste plastics

Demand CertifiedProduct Oil

Pollution Country emission criteriaPollution

EmployeePower supply Needed Capital cost IRR; Quick return on investments

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Table 4.5: Cassandra Oil AB - SwedenCassandra Oil ABSjöhagsvägen 14 SE-721 32 Västerås, Sweden http://www.cassandraoil.com/en/Location Factors Factors InformationYear 2011Population 110,877Number of plants 1Geographic characteristics

Highway (distance in km) 3Train terminal (distance in km) 2Port (distance in km) 3University (distance in km) 4Airport (distance in km) 9

Agglomeration Business park YesChemical cluster Yes

Feedstock Availability Almost inexhaustibleTypes of plastics Tires, Plastic waste, sand oil

Demand CertifiedProduct Oil, gas, carbon black, and metals.

Pollution Country emission criteriaPollution No polluting emissions

EmployeePower supply Needed Self-sufficient with the oilCapital cost IRR; Quick return on investments

Table 4.6: PlastOil AG -SwitzerlandPlastOil AGChrüzegg CH-6340 Baar / Sihlbrugg http://www.plastoil.com/default.htmLocation Factors Factors InformationYear 2013Population 20,000Number of plants 1Geographic characteristics

Highway (distance in km) 2Train terminal (distance in km) 6Port (distance in km) 400University (distance in km) 35Airport (distance in km) 50

Agglomeration Business park YesChemical cluster ?

Feedstock Availability YesTypes of plastics Mixed plastic waste

Demand Certified EN-590 Product Diesel

Pollution Country emission criteria YesPollution No

Employee 25-50 FTEPower supply Needed Capital cost IRR; Quick return on

investmentsROI: 10-16.5% depends on the sale price

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Table 4.7: Agilyx – United StatesAgilyx9600 SW Nimbus Ave, Suite 260 Beaverton, OR 97008 http://www.agilyx.com/Location Factors Factors InformationYear 2007Population 93.542Number of plants 1Geographic characteristics

Highway (distance in km) 1Train terminal (distance in km) 18Port (distance in km) 31University (distance in km) 30Airport (distance in km) 36

Agglomeration Business park YesChemical cluster No

Feedstock Availability Important and availableTypes of plastics Resins 1 to 7

Demand CertifiedProduct Crude oil (80%), natural gas (12%)

Pollution Country emission criteriaPollution

EmployeePower supply Needed Capital cost IRR; Quick return on investments 4 years or less

Table 4.8: Nexus Fuels – United StatesNexus Fuels LLCAtlanta, Georgia 1445 Marietta Blvd http://www.nexusfuels.comLocation Factors Factors InformationYearPopulation 447,841Number of plants 1Geographic characteristics

Highway (distance in km) 5Train terminal (distance in km) 1Port (distance in km) 400University (distance in km) 4Airport (distance in km) 53

Agglomeration Business park YesChemical cluster No

Feedstock AvailabilityTypes of plastics

Demand CertifiedProduct Diesel (70-80%), Natural gas (8-12%)

Pollution Country emission criteriaPollution

EmployeePower supply Needed Capital cost IRR; Quick return on investments X

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Table 4.9: Plastic Advanced Recycling Corporation – United StatesPlastic Advanced Recycling Corporation7884 S.Quincy Street, Willowbrook IL 60527 www.plastic2x.comLocation Factors Factors InformationYear 1996Population 35,983Number of plants 2Geographic characteristics

Highway (distance in km) 4Train (distance in km) 7Port (distance in km) 33University (distance in km) 32Airport (distance in km) 34

Agglomeration Business park YesChemical cluster

Feedstock AvailabilityTypes of plastics

Demand CertifiedProduct Crude oil (50-70%), Natural gas

(15-25%)Pollution Country emission criteria

PollutionEmployeePower supply Needed Capital cost IRR; Quick return on

investments2.5 years

Table 4.10: Plastic2Oil – United StatesPlastic2Oil20 Iroquois Street Niagara Falls, NY 14303 USA www.plastic2oil.comLocation Factors Factors InformationYear 2009Population 49,468Number of plants 1, multiple machinesGeographic characteristics

Highway (distance in km) 3Train terminal (distance in km)

1

Port (distance in km) 42University (distance in km) 7Airport (distance in km) 11

Agglomeration Business park YesChemical cluster Yes

Feedstock AvailabilityTypes of plastics PE, PP, HDPE, LDPE, others

Demand CertifiedProduct No. 6 Fuel, No 2 Fuel (Diesel,

petroleum distillate), Naphtha, 2-4% carbon black, off-gases (10-12%)

Pollution Country emission criteria YesPollution No

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EmployeePower supply Needed Minimal energy required.Capital cost IRR One year

Table 4.11: RES PolyFlow – United StatesRES PolyFlow39 S. Main Street Suite 606 Akron, OH 44308 http://www.respolyflow.comLocation Factors Factors InformationYear 2008Population 198,110Number of plants 1Geographic characteristics

Highway (distance in km) 5Train terminal (distance in km) 3Port (distance in km) 64University (distance in km) <1Airport (distance in km) 8

Agglomeration Business parkChemical cluster No

Feedstock AvailabilityTypes of plastics Resins code 1-7

Demand CertifiedProduct Diesel (33%), Monomers (33%)

Pollution Country emission criteriaPollution

EmployeePower supply Needed Capital cost IRR; Quick return on

investments3-4 years

Table 4.12: Vadxx – United StatesVadxx655 South Broadway Street Akron, OH 44311-1003 www.vadxx.comLocation Factors Factors InformationYear 2009Population 198,110Number of plants 1Geographic characteristics

Highway (distance in km) 2Train terminal (distance in km) 6Port (distance in km) 65University (distance in km) 1Airport (distance in km) 7

Agglomeration Business park YesChemical cluster No

Feedstock AvailabilityTypes of plastics

Demand CertifiedProduct Crude oil (75%), natural gas (15%)

Pollution Country emission criteriaPollution Lowest emission rating

Employee 18Power supply Needed Capital cost IRR; Quick return on investments 1 year

73

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Appendix 5 – Location Factors Dutch plastic to oil companiesTable 5.1: Necessary Location Factors Bin2Barrel

Bin2BarrelLocation Factors Factors InformationPossible location Port of AmsterdamGeographical characteristics

Highway NecessaryTrain Negligible Port NecessaryUniversity NegligibleAirport Negligible

Agglomeration Business park ConduciveChemical cluster ConduciveRecycling cluster Negligible

Feedstock Availability ConduciveDemand Certified Necessary

Sales market NecessaryPollution Country emission criteria ConducivePower supply Needed NegligibleCapital cost IRR; Quick return on investments Not clear yet

Table 5.2: Necessary Location Factors BlueAlp BVBlueAlp BV/ PetrogasLocation Factors Factors InformationPossible location Multiple locations in portsGeographical characteristics

Highway NecessaryTrain Negligible Port ConduciveUniversity NegligibleAirport Negligible

Agglomeration Business park ConduciveChemical cluster ConduciveRecycling cluster Negligible

Feedstock Availability NecessaryDemand Certified Necessary

Sales market ConducivePollution Country emission criteria ConducivePower supply Needed NegligibleCapital cost IRR; Quick return on investments Different every project

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Table 5.3: Necessary Location Factors Energy VisionEnergy VisionLocation Factors Factors InformationPossible location Province of Groningen/ close by

Groningen SeaportsGeographical characteristics

Highway NecessaryTrain Negligible Port ConduciveUniversity NegligibleAirport Negligible

Agglomeration Business park NecessaryChemical cluster NegligibleRecycling cluster Negligible

Feedstock Availability NecessaryDemand Certified Conducive

Sales market ConducivePollution Country emission criteria ConducivePower supply Needed NegligibleCapital cost IRR; Quick return on investments Not clear yet

Table 5.4: Necessary Location Factors Pyroil InternationalPyroil InternationalLocation Factors Factors InformationPossible location Havenschap MoerdijkGeographical characteristics

Highway NecessaryTrain Negligible Port NecessaryUniversity NegligibleAirport Negligible

Agglomeration Business park NecessaryChemical cluster NegligibleRecycling cluster Negligible

Feedstock Availability NecessaryDemand Certified Conducive

Sales market NecessaryPollution Country emission criteria NecessaryPower supply Needed NegligibleCapital cost IRR; Quick return on investments Not clear yet

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Appendix 6 - Plastic to oil figures United States and Europe

Figure 6.1: Plastic to oil location United States

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Figure 6.2: Plastic to oil location Europe

Appendix 7 - Standard question form Dutch Plastic to oil companies

Gesprek met:

Datum:

Bedrijf: Locatie:

Wat is de huidige stand van zaken?

Hoe zit met de CO2 uitstoot bij de pyrolyse? Andere uitstoot?

Waar wilt u de installatie gaan bouwen? Wat voor omgeving?

Welke factoren neemt u mee in dit besluit proces?

Hoe zit het met de inzameling van de plastics?

Kunnen alle soorten plastics gebruikt worden?

Wat is de kwaliteit van de olie?

Heeft u al een werkende installatie buiten Nederland?

Wat zijn de knelpunten voor het opstarten van pto bedrijf?

78

Hoe zit het tijdspad eruit?

Wat zou de rol van de overheid moeten zijn:

Financieel? Wetgeving? Subsidie? Partijen in contact brengen? Vergunningen? Wegnemen van knelpunten Evt andere rol?

Wat is de belangrijkste?

Vertrouwelijk?

Overige aantekeningen

79