REN-GAS GREEN LIQUID FUELS PRODUCTION - LAHTI

Promoter – Financial Intermediary

NORDIC REN-GAS OY

Location

• Finland

Description

The project concerns the design, implementation and operation of a renewable hydrogen production facility (40 to 50 MW) for the production of synthetic methane, located next to an existing CHP, close to the city of Lahti, Finland. The transportation segment accounts for 22% of the CO2 emissions in Finland, out of which 95% is from road transportation. The country is committed to 50% reduction by2030 compared to 2005 level, aiming to become carbon-free by 2045. In line with the EU regulation, the country is reducing the use of fossil-based fuels in traffic, by implementing a renewable fuel distribution mandate for fuel distributors, requiring a certain share of renewable content within total fuel volume sold. The Finnish government has created a Roadmap to Fossil-Free Transport, which considers biogas as key to reduce emissions from heavy duty vehicle (HDV) transportation. The Roadmap envisages financial incentives, targeting 6200 HDV by2030 to be operated on renewable gas, that should cover the difference between the purchase price of a gas-fuelled truck and the diesel option.

Objectives

The aim is to support EU and national climate and renewable targets for 2030 through the production of renewable hydrogen and derivates (synthetic fuels) to be used in transport. The project would address two main market failures, i.e.: (i) negative carbon externalities, as it ensures the integration of a new renewable fuel in the transport sector, through a large-scale implementation of hydrogen technologies, and (ii) positive learning externalities, as renewable hydrogen and synthetic fuel production can be considered a technology at an early stage of deployment with a significant potential for future cost decrease.

Sector(s)

• Industry - Manufacturing

Proposed EIB finance (Approximate amount)

not disclosed

Total cost (Approximate amount)

not disclosed

Environmental aspects

Hydrogen (H2) modules of the project fall under Annex II of the Environmental Impact Assessment (EIA) directive and are subject to the Seveso Directive (lower-tier). H2 production needs to be aligned with the sustainability and greenhouse gas (GHG) emission savings criteria of relevant EU directives and regulations, incl. the threshold for substantial contribution to climate mitigation, set by the EU Taxonomy, and the EU criteria for additionality, renewability, and the temporal, geographical correlation of the electricity supply to the H2 electrolyser.

Procurement

The project will be operating without exclusive or special rights within the meaning of the EU Utilities Directive 2004/17/EC c.q. 2014/25/EU hence private sector procurement procedures will apply. Equipment and works are expected to be purchased through several contracts for installation and infrastructure (Balance of Plant) of components for a H2 module.

Status

Approved - 21/03/2024