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Swedish petroleum company and bunker supplier Preem AB has reached an agreement with Vattenfall to investigate the potential of using hydrogen gas in the large-scale production of biofuel for the Swedish market.

Preem's objective is to produce three million cubic metres of renewable fuel yearly by 2030, which would account for the bulk of the reduction in carbon dioxide emissions in the Swedish transport sector. Vattenfall would be responsible for providing hydrogen gas for the fuel production.

As part of the agreement, Preem and Vattenfall are to set up a work group and carry out a pilot study that will be financed by both parties.

Both companies are to also review the potential of producing green hydrogen gas by utilising electricity from hydro and wind power.

"We need to use many different types of raw materials and produce several different types of fuels to replace fossil fuels with renewables. Many different solutions are also needed. Preem's contribution is to make fuels that are as green and efficient as possible. The collaboration is also a step in our vision to be to the fore in the transition towards a sustainable society," said Petter Holland, CEO and president at Preem.

"This is a significant step for us and I am very positive about the potential of this collaboration. I see both business opportunities and climate benefits, where Vattenfall can contribute with climate-smart and competitive hydrogen gas," commented Magnus Hall, president and CEO of Vattenfall.

Today Preem already produces biofuel or so-called biodiesel (non-fossil diesel) made from tall oil - a by-product of the forestry industry, but it also intends in the future to produce renewable fuel from sawdust and forestry residues from timber felling and lignin from the wood pulp industry.

"Hydrogen gas is a key part of the process to transform renewable raw materials into biofuel. Climate-smart hydrogen gas and different by-products from the wood pulp industry could multiply the production volumes compared to those of today," the project partners said.

Image: Magnus Hall (left), CEO and president of Vattenfall, and Petter Holland (right), CEO and president of Preem.