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Danish companies team up for renewable fuel project

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Copenhagen Airports, A.P. Moller-Maersk, DSV Panalpina, DFDS, SAS and Ørsted established partnership to develop an industrial-scale production facility to produce renewable fuels for road, maritime and air transport in the Copenhagen region.

The partnership combines the demand and supply side of sustainable fuels with a mission to realize what could become one of the world’s largest facilities for electrolysing and renewable fuel production.

“Whether we operate in road transport, shipping or aviation, we all have a major task to contribute to the sustainable transition in Denmark. The challenge of creating a future-proof and sustainable fuel is common to everyone in the transport sector, and the fact that we are now working together in a partnership is crucial for us to be able to produce sustainable fuel in the necessary quantities. It also supports the ambition to transition Danish aviation to become completely free of carbon emissions in 2050 and make Denmark a pioneer in the development of future climate-friendly fuels.”

Thomas Woldbye, CEO CPH Airport.

The project can lead the maturation of renewable fuels while creating jobs and new value chains to reinforce Denmark’s position as a leader in green energy.

Copenhagen Airports, A.P. Moller-Maersk, DSV Panalpina, DFDS, SAS and Ørsted brought together the demand and supply side of renewable fuels in a partnership with the clear goal of creating a manufacturing facility for hydrogen and e-fuel as early as 2023.

“This ambitious partnership fits well with our long-term targets to reduce emissions and find sustainable solutions for our industry. We are proud to play a part. The transport sector is very important for Denmark but leaves a significant CO2 footprint and we are committed to finding ways to pave the road for a greener future. While this initiative is local, our long-term ambitions remain global.”

Jens Bjørn Andersen, CEO DSV Panalpina.

When fully scaled-up by 2030, the project could supply more than 250.000 tons of renewable fuel per year for buses, trucks, maritime vessels and aircraft.

Production would potentially be based on a total electrolyser capacity of 1.3 gigawatts, making it likely one of the largest facilities of its kind in the world. The production from the fully scaled facility can reduce annual carbon emissions.

Decarbonizing 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.”

Søren Skou, CEO A.P. Moller – Maersk.

COWI and BCG act as knowledge partners for the project, and the Municipality of Copenhagen is funding the project in line with Copenhagen’s ambitious decarbonization policies.

However, the partnership hopes the project will serve as a catalyst over time for similar ventures in other parts of Denmark and internationally.

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

The project would require large-scale renewable electricity supply, which could potentially come from offshore wind power generated at Rønne Banke off Bornholm Island.

“The ability to establish a vision of an industrial-scale sustainable fuel production facility is due to the power of partnerships. 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.”

Torben Carlsen, CEO DFDS.

Such sustainable fuels today come at a greater cost than fossil-based fuels. To become competitive with fossil fuels, sustainable fuel production will need to be matured, built on an industrial scale, and undergo a cost-out journey similar to what has been seen in other renewable energy technologies in the past decade, such as offshore wind, onshore wind and solar photovoltaics. As an example, in Northwest Europe since 2012, the cost of offshore wind has declined by about 70 percent.

“The infrastructure aviation enables has a significant contribution to the global society. SAS has very ambitious targets to reduce its climate affecting emissions and one of the key drivers is to use Sustainable Aviation Fuels. We support multiple initiatives and projects in our home market and hope that this project can commercialize and become an accelerator for the transition to decarbonized aviation.”

Simon Pauck Hansen, executive vice president and COO of Airline Operations, SAS.

While the deep impact of COVID-19 challenges many partners, the partnership’s long-term efforts to fight climate change remain intact. The industrial partners see this project as a way to merge the dual goals of promoting the green transformation and boosting the Danish economy after the COVID-19 crisis.

Denmark is in a unique position to become a hub for sustainable fuel production, job creation and securing a leading position in establishing an entirely new industry that will be key to driving decarbonization towards net zero in 2050, not only in Denmark, but globally as well.

“This project gives Denmark a unique opportunity to spearhead the green transition in the transportation sector: We get to utilize Danish strongholds in, e.g., wind energy, and join forces in the electricity, district heating and transportation sectors. Cooperating across sectors and fostering partnerships among cities, companies and universities is exactly how we create real value and new sustainable solutions. At COWI, we are excited to take part in the project, contributing our knowledge about high-complexity, large-scale projects and green technologies.”

Lars-Peter Søbye, CEO COWI.

The electrolyser facility will not only be a potential cornerstone in decarbonizing the partners’ businesses, but will also make a critical contribution to achieving Denmark’s ambitious goal of reducing carbon emissions by 70 percent by 2030 compared to 1990 by replacing fossil fuels in heavy transport with sustainable fuels.

The vision of the partnership is to develop the project in three stages:

The first stage, which could be operational by 2023, comprises a 10MW electrolyser which can produce renewable hydrogen used directly to fuel buses 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, enough to supply more than 250,000 tonnes of sustainable fuels to be used in buses, trucks, maritime vessels and airplanes. The project has the potential to displace 5% of fossil fuels at Copenhagen Airport by 2027 and 30% by 2030.

The partnership will step forward and engage in dialog with regulatory authorities on the structure and policies required to promote the development of sustainable on-scale use of fuels in Denmark’s transport sector, and to pursue public co-funding to undertake a full project feasibility study.

If the feasibility report supports the project vision’s sustainability, a final investment decision for the project’s first stage will possibly be made as soon as 2021.

Decarbonizing the road, maritime, and aviation sectors is key to bringing our economies around the world to net-zero emissions by 2050. Our vision to produce sustainable fuels in the Greater Copenhagen area will deliver the necessary industrial scaling to drive the needed cost-out towards making renewable fuels competitive with fossil fuels. With the right policy framework in place, this project could be a defining leap forward for the production of sustainable fuels in Denmark, which will further reinforce Denmark’s role as a global leader in technologies and business models for a sustainable future.

Henrik Poulsen, CEO Ørsted.

In Copenhagen, we’ve set the ambitious goal to become the world’s first carbon neutral capital by 2025. We’re already well underway – with district heating, wind turbines, great biking infrastructure, zero emission buses, a green metro, etc. But we need new, sustainable technologies to go all the way. Sustainable fuels are an important means in the fight against climate change and air pollution. It brings us one step closer a greener future.

Frank Jensen, mayor of Copenhagen.

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