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Statkraft and Södra to build advanced biofuel demonstration plant in Norway

Norway-headed global hydropower major Statkraft and Sweden-headed forest owners association Södra have jointly announced that Silva Green Fuel AS, a company owned by Statkraft (51%) and Södra (49%) will build an advanced biofuels demonstration plant based on forest feedstock at Statkraft's biomass hub in Tofte, Norway. The expected investment cost is estimated to be NOK 500 million (≈ EUR 51.14 million) of which around 25 percent will be funded by the Norwegian agency Enova SF.

An aerial view of Statkraft’s Tofte biomass hub in Norway where Statkraft and Södra will build the Silva Green Fuel advanced biofuel demonstration plant to convert forest biomass to liquid transportation fuels (photo courtesy Statkraft).

In 2015 Södra and Statkraft formed the joint venture company Silva Green Fuel AS to establish future commercial production of advanced biofuel based on forest raw materials. The purpose of the demonstration plant to be built at Statkraft’s biomass hub facility in Tofte, Norway is to test technology for continuous production of advanced or second generation biofuel that can directly replace fossil fuels.

The plant will be used to develop both the process and the technology for developing the new biofuels, as well as to test various types of raw materials. Initially, the plant will use feedstock from the forestry industry, but other types of biodegradable material may potentially be used.

Advanced biofuels will be important for the transition from fossil to renewable energy consumption in the transport sector. As Europe’s largest supplier of renewable energy, Statkraft is championing an industry development that will contribute to the green shift, said Christian Rynning-Tønnesen, President and CEO at Statkraft.

Demo plant with full-scale in mind

The demonstration plant is a first step towards a full-scale plant. The plan is to be able to enter a full-scale plant with the production of advanced liquid biofuels for various forms of transportation including aviation.

This is an important decision. The potential of forests is enormous when it comes to finding new, sustainable solutions for products that were previously limited to fossil raw materials. Södra is an expert in forests and industrial processes to extract good products from forest raw materials, and Statkraft specializes in energy. It’s a strong combination, said Catrin Gustavsson, Innovation Manager at Södra.

The Silva Green Fuel advanced biofuel demonstration plant is to be located in the former Södra Cell building (centre) sited on Statkraft’s Tofte biomass hub in Norway.

The annual capacity of a full-scale production line will be between 100 and 150 million litres of biofuel. Initially, the product is intended for heavy road transport. However, the aim is to qualify the biofuel for use in the aviation industry.

With a future commercial facility, we can enable large volumes of biofuels. At the same time, it is important that future decisions on the renewable energy directive in the EU, on how to promote renewable energy, support this type of investment in the production of fossil-free biofuels. Södra has several tracks on developing biofuels, and with this, we take further steps towards a fossil-free future, said Christian Grönvold, Project Manager for the demo plant, Södra.

Hydrofaction technology

The Danish-Canadian company Steeper Energy Aps will supply the technology. Construction of the estimated NOK 500 million (≈ EUR 51.14 million) project will begin in February 2018 and completion is scheduled for 2019.

According to the company, its Hydrofaction technology was selected by Silva Green Fuel after an “exhaustive” due diligence review of some 40 other technologies. Hydrofaction harnesses water brought to supercritical conditions, to cost-effectively convert biomass to high-value liquid biofuels.

The partnership between Silva Green Fuel and Steeper will confirm engineering data and design protocols to de-risk future commercial-scale facilities planned to be built by Silva Green Fuel and will be offered by Steeper globally to other biofuel project developers.

This partnership positions Steeper Energy as a leader in providing advanced renewable fuels that can not only help reduce net carbon emissions but also produce in-demand renewable diesel for use in heavy and long-haul transport sectors, said Steeper Energy’s co-founder and CEO, Perry Toms.

According to Statkraft, the market potential is considerable. If ten production lines were built in Norway and Sweden, they could produce up to 1.5 billion litres annually. This corresponds to 13 percent of the fuel used for road transport in these markets.

Support from Enova

Enova SF, a funding agency owned by the Norwegian Ministry of Petroleum and Energy and charged with supporting the development of energy and climate technology will provide NOK 116.7 million (≈ EUR 11.95 million) in support.

It is a very good news that Statkraft and Södra invest in solutions that can contribute to the transition from fossil to renewable energy in the transport sector. The support from Enova will help to verify and adapt the chosen technology solution in the pilot, said Nils Kristian Nakstad, Managing Director of Enova.

Enova welcomes more projects that can lead to the development of new technology, which in the long term results in reduced greenhouse gas (GHG) emissions, reduced power outages or improved energy efficiency, while at the same time leads to competence development in Norwegian businesses and environmental technologies.

According to Statkraft, the market potential for advanced biofuels is considerable. If ten production lines of its planned 150 million litre per annum capacity Tofte facility were built in Norway and Sweden, they could produce up to 1.5 billion litres annually. This corresponds to 13 percent of the fuel used for road transport in these markets.

Norwegian road transportation consumes approximately 4 billion litres of fuel annually. The government has decided to increase the biofuels blend mandate to 10 percent in 2018. The Parliament has proposed that the biofuels blend mandate be increased to 20 percent by 2020 with 8 percent of the total from so-called advanced biofuels based on waste and residues or forest raw materials.

Enova has an important role to play in supporting the development and introduction of innovative energy and climate technologies and reducing the risk for those ahead. We will help to realize a good technology project that brings us closer to the solutions for the low-emission society, ended Nakstad.

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