Södra and Statkraft have made a decision to invest in a biofuel demo facility. The investment will be made through the joint company Silva Green Fuel AS.
The Danish-Canadian company Steeper Energy will deliver the technology. Construction will start in February next year and completion is scheduled for 2019. Enova will finance around 25 percent. The total investment will be approximately SEK 500 million ($59 million).
"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 President and CEO Christian Rynning-Tønnesen.
The purpose of the demonstration plant, which will be located in Tofte, Norway, is to test technology for continuous production of advanced (second generation) biofuel that may directly replace current fossil fuels, as well as testing various types of raw materials. Initially, the plant will use feedstock from the forestry industry, but all biodegradable material may potentially be used.
“This is a milestone decision. The forest offers enormous potential when it comes to finding new and sustainable solutions for products that were previously confined to fossil raw material,” said Catrin Gustavsson, Head of Innovation and New Business at Södra.
Södra and Statkraft formed the joint venture company Silva Green Fuel AS in 2015 to establish future commercial production of advanced biofuel based on forest raw materials. The capacity of a full-scale production line will be between 100 and 150 million litres of biofuel each year. Initially, the product is intended for heavy road transport. However, the aim is to qualify the biofuel for use in the aviation industry.
The market potential is considerable. If 10 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.
”With a commercial facility in place in the future, we can enable large volumes of biofuel. Södra is following several paths for the development of biofuel, in particular, and this represents another step forward towards a fossil-free future,” said Christen Grønvold-Hansen, Project Director for the demo facility at Södra.