Liquefied biogas is one of the keys to fossil-free shipping – but lack of supply is a major issue. The Swedish shipping company Furetank has signed a letter of intent with Eskilstuna Biogas, enabling the development of a new biogas plant producing around 5,000 tonnes of LBG annually.

Furetank commits to buying at least 75% of the produced fuel for 10 years. The gas will be extracted from manure and food waste from the municipalities of Eskilstuna and Strängnäs. It is upgraded to a 100% waste-based, fossil-free and renewable biofuel, LBG.

Furetank strives to be a leader in climate and environmentally efficient shipping. They have developed a new series of vessels that are best in class globally, according to the climate standards for shipping set by the IMO. Today these vessels operate mainly on liquefied natural gas, LNG, but the ambition from the start has been to switch over to LBG as soon as possible. Now Furetank takes the first big step towards making the shift.

– It feels fantastic to access liquefied biogas in Sweden. With LBG produced in the right way, we can run our vessels completely without emitting CO2 or harmful particles. This is a strategic move. We developed the new efficient vessels, chose gas as a fuel and offset remaining emissions. Now we move on to securing our own supply of LBG, says Furetank’s CEO Lars Höglund.

Multi-million state support

The biogas plant will be the largest environmental investment in Eskilstuna in 20 years and corresponds to almost 10% of the municipality’s total greenhouse gas emissions, according to Kaj Wågdahl, Eskilstuna Biogas AB Chairman of the Board.

The project receives approximately SEK 140 million in grants from the Swedish Environmental Protection Agency’s support for climate investments. An agreement with a large customer was a requirement for obtaining financing.

– In addition to these grants and public production support for biogas, a long-term agreement with a strong partner is required to make this big investment and achieve the large-scale biogas production that we are planning. It is also very gratifying to find a partner who sees business opportunities in leading the way towards climate neutrality, says Kaj Wågdahl.

One step ahead for the ETS

Before giving the new plant the final go, the production support for biogas recently decided by the Swedish government needs to come into force and all permits need to be in place.

Production is planned to start in the last quarter of 2023, likely well-timed with the launch of the EU Emissions Trading System for shipping. When all shipping companies need to start paying for their carbon dioxide emissions, Furetank will be one step ahead.

– We became the first shipping company in Sweden and second in the world to bunker LBG in 2018. For us it was a statement; we want to head in this direction. Now we have a clear plan for the transition and are negotiating more contracts in Sweden and other European locations. It feels incredibly good. The whole organization enjoys being involved in pushing this development forward and showing that it is possible, says Lars Höglund.