Stockholm Exergi’s flagship Bio-Energy Carbon Capture and Storage (BECCS) project is one of only seven large-scale projects in Europe to be awarded a grant by the EU Innovation Fund. The project has been selected based on its potential to transform the European energy industry and mitigate climate change. APG, on behalf of its pension fund client ABP, owns a 20.5% stake in Stockholm Exergi.
The grant from the EU Innovation Fund will help Stockholm Exergi to fund and build a pioneer full-scale Bio-Energy Carbon Capture and Storage (BECCS) plant. The company has already validated the economic and environmental efficiency of this approach through the use of an R&D installation. Stockholm Exergi expects to launch an industrial scale BECCS facility in 2025, which will be connected to an existing bio-energy combined heat and power plant in Stockholm.
Ahead of sector peers
The European Commission has praised the BECCS concept for its outstanding energy efficiency. This is largely due to its ability to recover heat from the capture and liquefication processes and use it for district heating. Carlo Maddalena, Senior Portfolio Manager Infrastructure at APG said: “We envisage Stockholm Exergi playing a pivotal role in the energy transition and positively contributing to much-needed innovation in the energy sector. The grant by the EU Innovation Fund is a testament to the quality of the company and its management team, which places Stockholm Exergi ahead of its sector peers in Europe.”
Exergi’s BECCS plant will contribute to Stockholm’s ambition to become the world’s first climate-positive capital city. The facility is expected to have a capture capacity of 800,000 tonnes CO2 per year, which is roughly equal to Stockholm’s annual traffic-related emissions. The captured CO₂ will be permanently stored in sub-sea geological aquifers or in depleted oil and gas fields in the North Sea. The EU’s CCS Directive lays out very stringent environmental safety criteria for selecting sites for the geological storage of CO₂. Based on the successful outcome of this first project, Stockholm Exergi plans to build additional facilities at its other bio-energy heat and power and waste incineration plants.
Key tool to drive the energy transition
To achieve the Paris climate goals, it is not sufficient to only reduce CO2 emissions by switching to renewable sources of energy. Of the 78 scenarios of the Intergovernmental Panel on Climate Change (IPCC) compatible with a warming of 1.5°C, 73 partly rely on bio-energy carbon capture and storage to meet the objectives. Once scaled up, Stockholm Exergi expects BECCS to become a key tool to drive the energy transition, limit global warming and meet the Paris climate goals.
The EU Innovation Fund is one of the world’s largest funding programs for supporting innovative low-carbon technologies. The program will provide around €20 billion of support until 2030, aiming to bring industrial solutions that decarbonize Europe to the market and support the transition to climate neutrality. During the first round, a total of 311 projects applied for funds. The 7 projects that were selected are to share the €1.1 billion allocated in this first round of grants.
In June 2021, an APG-led consortium acquired a 50% stake in Stockholm Exergi from Fortum Oyj, a Finnish energy company. The company is the largest supplier of district heating in Sweden and an industry leader in sustainability. Stockholm Exergi has the ambition to become a ‘climate positive’ company by 2025.