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Lead­ing Dan­ish com­pan­ies join forces on an ambi­tious sus­tain­able fuel project

26.05.2020
Copen­ha­gen Air­ports, A.P. Moller — Maersk, DSV Panalpina, DFDS, SAS and Ørsted have brought togeth­er the demand and sup­ply side of sus­tain­able fuels in a unique part­ner­ship with the con­crete vis­ion to devel­op a new ground-break­ing hydro­gen and e‑fuel pro­duc­tion facil­ity as soon as 2023. When fully scaled-up by 2030, the pro­ject could deliv­er more than 250,000 tonnes of sus­tain­able fuel for buses, trucks, mari­time ves­sels, and air­planes every year. Pro­duc­tion would poten­tially be based on a total elec­tro­lys­er capa­city of 1.3 gigawatts, which would likely make it one of the world’s largest facil­it­ies of its kind. The pro­duc­tion from the fully scaled facil­ity can reduce annu­al car­bon emis­sions by 850,000 tonnes. COWI and BCG act as know­ledge part­ners for the pro­ject, and the pro­ject is sup­por­ted by the Muni­cip­al­ity of Copen­ha­gen in line with Copen­ha­gen’s ambi­tious policies for decar­bon­isa­tion. How­ever, the part­ner­ship hopes that the pro­ject can, over time, act as a cata­lyst for sim­il­ar pro­jects in oth­er parts of Den­mark and inter­na­tion­ally. If real­ised as envis­aged, the pro­ject will be loc­ated in the Great­er Copen­ha­gen Area and could sup­ply renew­able hydro­gen for zero-emis­sion buses 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 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. Today, such sus­tain­able fuels come at a high­er cost than fossil-based fuels. To become com­pet­it­ive with fossil fuels, the pro­duc­tion of sus­tain­able fuels will need to be matured, built at indus­tri­al scale, and go through a cost-out jour­ney sim­il­ar to what has been seen over the past dec­ade in oth­er renew­able energy tech­no­lo­gies, such as off­shore wind, onshore wind and sol­ar PV. As an example, the cost of off­shore wind has declined by approx 70% in North­w­est Europe since 2012. For this to hap­pen, gov­ern­ments and industry must come togeth­er to cre­ate a frame­work that incentiv­ises private invest­ments in large-scale sus­tain­able fuel pro­duc­tion. Although sev­er­al part­ners are chal­lenged by the deep impact of COV­ID-19, the part­ner­ship’s long-term com­mit­ments to fight­ing cli­mate change remain intact. 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. Den­mark is in a unique pos­i­tion to become a hub for the pro­duc­tion of sus­tain­able fuels, cre­at­ing jobs and secur­ing a lead­ing pos­i­tion in estab­lish­ing an entirely new industry, which will be key in driv­ing decar­bon­isa­tion towards net zero in 2050, not just in Den­mark, but also glob­ally. The elec­tro­lys­er facil­ity will not only be a poten­tial corner­stone in decar­bon­ising the part­ners’ busi­nesses but will also deliv­er a crit­ic­al con­tri­bu­tion to reach­ing Den­mark’s ambi­tious goal of redu­cing car­bon emis­sions by 70% 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 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 as soon as 2021.

Thomas Wold­bye, CEO, CPH Air­port, says:

​“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.”

Jens Bjørn Ander­sen, CEO, DSV Panalpina, says:

​“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.”

Søren Skou, CEO, A.P. Moller — Maersk, says:

​“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.”

Torben Carlsen, CEO, DFDS, says:

​“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.”

Simon Pauck Hansen, Exec­ut­ive Vice Pres­id­ent and COO of Air­line Oper­a­tions, SAS, says:

​“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.”

Hen­rik Poulsen, CEO, Ørsted, says:

​“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. 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.”

Frank Jensen, Lord May­or of Copen­ha­gen, says:

​“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.”

Lars-Peter Søbye, CEO, COWI, says:

​“This pro­ject gives Den­mark a unique oppor­tun­ity to spear­head the green trans­ition in the trans­port­a­tion sec­tor: We get to util­ise 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.” Source: Ørsted, Press Release, 26.05.2020
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