Sweden-based Scandinavian Biogas will supply bio-LNG to German fueling station operator Alternoil under a new deal revealed on Sunday.
Scandinavian Biogas said in a statement Alternoil would include the long-term bio-LNG supplies in the “climate-neutral” fuel REEFUEL distributed on the German transportation market.
Alternoil owns the REEFUEL brand produced from biomethane rendered by certified biological waste processes and green hydrogen generated by wind energy.
According to Scandinavian Biogas, the firm will supply 8,000 tonnes of bio-LNG during ramp up in 2024 and this will grow to 11,500 tonnes or 160 GWh per year from 2025 to 2030.
This corresponds to over 1 TWh of energy with a total order value of about 2.7 billion Swedish crowns ($268 million), it said.
In addition, the deal also also includes the optionality to increase volumes up to 2 TWh corresponding to 4.7 billion Swedish crowns ($467 million), the bio-LNG producer said.
Scandinavian Biogas based the estimate on agreed annual volumes, current energy prices and the price of CO2-emission reduction benefits.
“Breakthrough agreement”
Earlier this year, Scandinavian Biogas set a long-term target to reach an annual production capacity of 3 TWh of biogas, mainly bio-LNG, in Europe by 2030.
The firm said the contracted volumes with Alternoil correspond to about 25 percent of its planned capacity in 2025.
It will supply bio-LNG from its facilities in Sweden and Norway to Alternoil’s filling stations in Germany.
Alternoil is building a large network of LNG filling station across Germany and plans to have 60 stations by the end of 2022.
Scandinavian Biogas says that 1 TWh of bio-LNG equals to 5,500 trucks driving 100,000 km.
“I am very excited to announce this breakthrough agreement with Alternoil, one of the leading distributors in driving the transition to a carbon-neutral transportation sector,” Matti Vikkula, CEO of Scandinavian Biogas, said.
“This agreement is also a major milestone for Scandinavian Biogas in our ambition to deliver on our previously communicated business plan – achieving an annual capacity of at least 700 GWh by 2024,” Vikkula said.
“We see huge potential in using discarded food and other waste to create carbon-neutral transportation fuel,” Jürgen Muhle, chairman of Altenoil’s parent avanca group, said.
He added that REEFUEL can be used in any LNG-fueled truck and contributes “significantly” to the decarbonization of heavy-duty transport.