- Maersk, Orsted and other Danish companies team up to produce sustainable fuels on a large scale.
- Goal of the partnership is to establish large facility that will provide fuels for maritime, air and road transport.
- Companies say that a hydrogen and e-fuel production site could be up and running by 2023.
Several major Danish firms, including Orsted and Moller-Maersk, have formed a partnership aiming to produce sustainable fuels on an industrial scale, write s Anmar Frangoul for CNBC.
The goal of the partnership — other members include Copenhagen Airports, DSV Panalpina, DFDS and Scandinavian airline SAS — is to establish a large facility that will provide fuels for maritime, air and road transport in the Copenhagen area.
Global hub for sustainable fuels
Denmark could soon become a global hub for sustainable fuels after six of the country’s biggest companies joined forces to launch a major project that aims to create green hydrogen for buses, trucks, ships and airplanes.
Container shipping group AP Moller-Maersk, ferry line DFDS, renewable energy company Orsted, logistics group DSV Panalpina, airline SAS and Copenhagen Airports aim to open the 1.3-gigawatt (GW) e-fuel factory – one of the world’s largest of its kind – within the Greater Copenhagen area in 2023.
Once production is scaled up to full capacity, it could produce more than 250,000 tonnes of clean power annually by 2030.
AP Moller-Maersk CEO Søren Skou said: “Decarbonising the transport sector is a significant and complex task that requires collaborative contributions from every company, organisation and country.”
“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,” he added.
Sustainable fuels project
The proposed scheme could supply renewable hydrogen for Copenhagen’s transit agency Movia’s zero-emission buses and DSV Panalpina’s lorries. It could also provide renewable jet fuel – e-kerosene – for SAS airplanes flying to and from Copenhagen Airport, as well as renewable methanol for AP Moller-Maersk’s ships.
The project – which requires regulatory approval and some public investment before any building work can begin – would require a large-scale supply of renewable electricity, which may come from offshore wind power produced by Orsted at Rønne Banke, off the Danish island of Bornholm.
- Its first stage, which could be up and running by 2023, involves a 10-megawatt (MW) electrolyser that can produce renewable hydrogen used directly to fuel buses and trucks.
- Stage two, set for a 2027 launch, comprises a 250MW electrolyser plant that receives power from Borbholm. This factory would combine the production of renewable hydrogen with sustainable carbon capture from other sites in Copenhagen for creating renewable methanol for ships and e-kerosene for aviation.
- 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 CO2 for sustainable redeployment.
This would be enough energy to create more than 250,000 tonnes of sustainable fuels, which have the potential to displace 30% of fossil fuels at Copenhagen Airport by 2030 – alongside its other uses in road and maritime transport.
DSV Panalpina CEO Jens Bjørn Andersen said: “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.”
He added, “While this initiative is local, our long-term ambitions remain global.”
A feasibility study to confirm the viability of the project is expected to be taken by 2021.
Copenhagen green hydrogen plant
Copenhagen green hydrogen plant could be key to driving down costs of sustainable fuels
The industrialization of sustainable fuels could go a long way to bringing costs down, which could have a wider impact beyond Denmark as they are currently more expensive than fossil fuels.
There’s hopes it could spark a similar “cost-out journey” to renewable energy technologies, such as wind and solar power – with the cost of offshore wind declining by about 70% in north-west Europe since 2012.
For this to happen, the project partners have urged governments to provide incentives for private investments in large-scale sustainable fuel production.
Orsted CEO Henrik Poulsen “Decarbonising 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.”
He said, “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.”
SAS executive vice-president and airline operations COO Simon Pauck Hansen added: “We support multiple initiatives and projects in our home market and hope that this project can commercialise and become an accelerator for the transition to decarbonised aviation.”
Importance of green economy in post COVID-19 world
As well as helping each of the six companies to achieve their own sustainability goals, the new plant will be a major contributor towards Denmark achieving its goal of reducing carbon emissions by 70% by 2030 compared to 1990 levels.
The partners – which will be supported by consultancies COWI and Boston Consulting Group – also believe it will give a boost to the Danish economy post the Covid-19 crisis, which has affected many of the companies significantly.
Torben Carlsen, CEO of DFDS, said: “The co-operation 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.”
Denmark has stated an ambition for its aviation sector to be emission-free by 2050.
Copenhagen Airports CEO Thomas Woldbye added: “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.”
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Source: CNBC
