Maersk, DSV Panalpina, DFDS, SAS and Ørsted have formed the first partnership of its kind to develop an industrial-scale production facility to produce sustainable fuels for road, maritime and air transport in the Copenhagen area.
The concrete vision is to develop a new hydrogen and e-fuel production facility as soon as 2023. When fully scaled-up by 2030, the project could deliver more than 250,000 tons of sustainable fuel for busses, trucks, maritime vessels, and airplanes every year.
Production would 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 tons.
The project could potentially supply renewable hydrogen for 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 out of Copenhagen Airports.
The project will require a large-scale supply of renewable electricity, which could 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 approximately 70% in Northwest Europe since 2012. For this to happen, governments and industry must come together to create a framework that incentivizes private investments in large-scale sustainable fuel production.
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.