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Swedish hydrogen project receives Energy Agency grant

The Swedish Energy Agency (Energimyndigheten) has agreed to cover up to half the cost of the preliminary planning of a new fossil-free hydrogen gas plant that Swedish oil refiner Preem AB (Preem) and state-owned energy utility major Vattenfall AB are planning to build at Preem's Gothenburg refinery. The 18 MW capacity electrolyser will produce hydrogen gas for use in the production of transportation biofuels.

Preem and Vattenfall are going ahead with the previously announced Letter of Intent (LoI) to design and build a hydrogen gas plant at Preem’s Gothenburg refinery to produce hydrogen gas using “fossil-free” electricity. According to a joint statement, the Swedish Energy Agency, through its ‘Industrial Evolution’ (Industriklivet) programme, will cover up to half the estimated SEK 6 million (≈ EUR 535 000) cost for the preliminary planning of the 18 MW capacity plant – expected to be the largest of its kind in Europe.

This initiative has the potential to contribute to achieving the goal of zero emissions for both the industry and the transport sector, said Klara Helstad, Head of the Sustainable Industry Unit at the Swedish Energy Agency.

The hydrogen is needed in the process to produce transportation biofuels derived from Swedish forest industry residues such as tall oil from the pulp industry. Hydrogen gas is currently generated mainly from fossil natural gas, which gives rise to carbon dioxide (CO2) emissions. By producing hydrogen gas from fossil-free electricity instead, these emissions can be avoided.

This is an important step in our transition to generating three million cubic metres of biofuel by 2030, and is entirely consistent with Preem’s vision of being a leader in the transformation towards a more sustainable society, said Petter Holland, CEO at Preem.

The hydrogen plant will contribute to reducing CO2 emissions by 25 000 tonnes per annum from the process, and emissions in the transport sector are expected to fall by around 230,000 tonnes annually when biofuels replace diesel and petrol. This is roughly equivalent to the annual emissions of 80 000 vehicles.

“It is very gratifying that the Swedish Energy Agency also sees the potential in Preem and Vattenfall’s shared target of greatly reducing emissions from road transport. Vattenfall now has a further opportunity to develop the market for hydrogen gas production from fossil-free electricity,” said Magnus Hall, President and CEO of Vattenfall, here seen during the groundbreaking ceremony of the HYBRIT project at SSAB in Luleå in June 2018.

As Sweden’s largest transportation fuel producer, Preem has taken a leading role in the transition to more renewable fuels and a sustainable society with less impact on the environment. Vattenfall is Sweden’s largest electricity generator and says that it has a clear greenhouse gas (GHG) emission reduction goal and taking a leading role in the transition to a sustainable energy system.

Sweden’s environmental targets mean that CO2 emissions from road traffic must be reduced by 70 percent between now and 2030, which in turn means that production of domestic renewable fuels needs to increase considerably.

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