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Danish transport sector to collaborate on sustainable fuel project

Danish transport sector to collaborate on sustainable fuel project
Maersk is one of the six companies involved

Copenhagen Airports, A.P. Moller – Maersk, DSV Panalpina, DFDS, SAS and Ørsted have formed a partnership to develop an industrial-scale production facility to produce sustainable fuels for road, maritime and air transport in the Copenhagen area.

The partnership brings together the demand and supply side of sustainable fuels with a vision to develop a new hydrogen and e-fuel production facility in 2023, which could become one of the world’s largest electrolyser and sustainable fuel production facilities.

When fully scaled-up by 2030, the project could deliver more than 250,000 tonnes of sustainable fuel for busses, trucks, maritime vessels, and airplanes every year.

Production would potentially be based on a total electrolyser capacity of 1.3 gigawatts, with the potential to reduce annual carbon emissions by 850,000 tonnes.

The companies hope that the project can spearhead the maturation of sustainable fuels while creating jobs and new value chains to reinforce Denmark’s role as a green energy leader.

Søren Skou, CEO, A.P. Moller – Maersk, said: “Decarbonising the transport sector is a significant and complex task that requires collaborative contributions from every company, organisation, and country. This project provides a first step in the massive transformation to produce and distribute sustainable energy.

“In Denmark, we have an opportunity now to accelerate the green transformation and take lead in powering the future with sustainable energy and I am pleased that we can contribute with concrete actions. We need many such projects both in Denmark and around the globe to achieve our ambition in Maersk of becoming carbon neutral by 2050.”

If realised as envisaged, the project will be located in the Greater Copenhagen Area and could supply renewable hydrogen for zero-emission busses tendered by Movia and heavy-duty trucks managed by DSV Panalpina, renewable methanol for Maersk vessels and renewable jet fuel (e-kerosene) for SAS airplanes and air transport out of Copenhagen Airports.

The project will require a large-scale supply of renewable electricity, which could potentially come from offshore wind power produced at Rønne Banke off the island of Bornholm.

In order to compete for sustainable fuels to compete with fossil fuels, which are currently cheaper, production of the former will need to be matured and built at industrial scale.

According to the partners, governments and industry must come together to create a framework that incentivises private investments in large-scale sustainable fuel production, in a similar way to the offshore wind sector where costs have fallen by 70% in Northwest Europe since 2012.

The industrial partners see this project as a way to combine the dual objectives of accelerating the green transformation and providing economic stimulus to the Danish economy post the COVID-19 crisis.

It is hoped that the electrolyser facility will be a potential cornerstone in decarbonising the partners’ businesses as well as helping Denmark reach its goal of reducing carbon emissions by 70% by 2030 compared to 1990 by replacing fossil fuels in heavy transport with sustainable fuels.

The project will feature three stages: the first, which could be operational by 2023, comprises a 10MW electrolyser which can produce renewable hydrogen used directly to fuel busses and trucks.

Stage two comprises a 250MW electrolyser facility which could be operational by 2027 when the first offshore wind power from Bornholm could be delivered.

This facility would combine the production of renewable hydrogen with sustainable carbon capture from point-sources in the Greater Copenhagen area to produce renewable methanol for maritime transport and renewable jet-fuel (e-kerosene) for the aviation sector.

Stage three, which could be operational by 2030 when the offshore wind potential at Bornholm has been fully developed, would upgrade the project’s electrolyser capacity to 1.3GW and capture more sustainable CO2.

This would be enough to supply more than 250,000 tonnes of sustainable fuels to be used in busses, trucks, maritime vessels and airplanes.

Torben Carlsen, CEO, DFDS, stated: “The cooperation of fuel users and producers along with scientists and society is the fastest way to make sustainable fuels available as realistic alternatives to the fossil fuels we combust in our vehicles and vessels today.

“I hope that this partnership and our project will help us reach our goal of operating zero-emission ferries and trucks much faster than we had originally anticipated.”

The partnership will now move forward and engage in dialogue with the regulatory authorities on the framework and policies needed to support the development of using sustainable fuels at scale in the transport sector in Denmark, and to seek public co-funding to conduct a full feasibility study of the project.

If the feasibility study confirms the viability of the project vision, a final investment decision for the first stage of the project could likely be taken in 2021.