Shell pledges financial support to bio-crude project in Norway
Jun 25, 2021
Shell has offered an additional $3 million of financial support to Biozin Holding for ongoing work to build a full-scale bio-crude production facility in Åmli, Norway. This latest sum is in addition to a previous contribution of $3M in 2019.
Shell and Bergene Holm have entered into a new Contribution Agreement with Biozin which will accelerate the development of low carbon fuels technology. This represents a shared strong commitment to decarbonising the transport sector. The project is building towards a full-scale production plant for advanced bio-crude oil in Amli, Norway, with a final investment decision scheduled for the second half of 2023. This new agreement includes increased long-term financial support from Shell, contributing $3M, which is in addition to a previous contribution of $3M in 2019.
"For us in Biozin, it is very positive that Shell and Bergene Holm, with this Contribution Agreement, confirm a long-term commitment in this project," says Thomas Skadal, CEO of Biozin."Shell has the technology and resources, together with Bergene Holm’s extensive experience with feedstock, make us confident that we will be able to realize a full-scale production plant for bio-crude oil in Amli."
The demand for low carbon fuels in transport is expected to double by 2030. Shell, Bergene Holm and Biozin are working to meet this demand and help their customers and society decarboinse their journeys. This investment is an important step on this journey as it will help to scale and de-risk Shell’s IH²® technology which produces low carbon fuels from woody biomass, forestry residues and agricultural waste. There are still technical and project risks to overcome, but once fully scaled, IH²® has the potential to significantly contribute to decarbonising road journeys, marine and aviation by producing renewable gasoline, diesel, marine distillates and sustainable aviation fuel.
Shell’s General Manager for Advanced Biofuels, Andrew Murfin, is pleased with the project so far. “Bergene Holm’s forestry expertise alongside Biozin’s longstanding leadership within the biofuels sector make them perfect partners as we work to scale IH²® technology. Together, we can ensure the project has access to the sustainable wood wastes and sawmill residues it needs while respecting Norway’s forests.
The Norwegian regulatory environment supports biofuels and advanced bio-crude oils projects like this one, and the local authority is actively promoting industrial development. While we still have technical and project risks to overcome, these supporting factors give us a good chance of deploying Shell’s IH²® technology at a commercial scale in Amli. We know that if successful, this project will help our customers decarbonise their journeys.” says Andrew Murfin.
«In connection with the new Contribution Agreement, Bergene Holm has exercised the option to buy Preem’s shareholding in Biozin and provided additional equity to the company. We are now further strengthening our involvement in this project. For us this project is important as it will contribute to sustainable forestry in the region and safeguard raw material supply for the sawmill in Amli. We have in this sawmill invested more than 300 MNOK the last 10 years», says Bergene Holm’s CEO, Erland Lokken.
Since the previous Contribution Agreement was established in November 2019, the IH²® technology, which will be used in the production process, has been further developed and continuously tested by Shell in several international research centers. The final technology qualification remains, which unfortunately has been delayed due to the ongoing Covid-19 pandemic. The plant in Amli will convert feedstock from forest and waste/by-products from sawmills into a sustainable lighthydrocarbon liquid product containing C4-C20 hydrocarbons termed advanced bio-crude oil to be used in all petrochemical products. In full operation, the plant will convert around 1000 metric tons of dried biomass per day. The Advanced bio-crude oil will be sold and further processed into sustainable, renewable products such as Aviation fuel, Diesel and Gasoline blend stocks. The technology also produces Biochar which is a valuable product aiding in Carbon capture. Use of this high value Advanced bio-crude oil and Biochar can reduce the CO2 footprint by 72% – 90% compared to fossil crude oil.
A final decision to invest about NOK 4 billion for the realization of the Biozin Amli plant is expected second half 2023. The first production of bio-crude oil is planned for early 2026.
Biozin is a Norwegian company currently owned by Bergene Holm. Biozin was established to produce renewable biocrude from Norwegian sawmills and forestry residues.
Bergene Holm is the second largest sawmill company in Norway, with about 450 employees and turnover of 1.8 billion NOK. Bergene Holm operates 7 production facilities and other businesses in the South of Norway and has more than 70 years of experience from the Norwegian wood industry.
Shell: As part of our commitment to accelerate the transition to net-zero emissions, purposefully and profitably, by 2050, in line with society, Shell is growing its low carbon fuels. This year Shell announced its ambition to increase the production of renewable fuels eight-fold, and this includes three categories of low carbon fuels: advanced biofuels, renewable natural gas (RNG) and new fuels (as well as Hydrogen).
IH²® process is an advanced hydropyrolysis technology that uses catalyst processes to remove oxygen from biomass to produce hydrocarbon products from the remaining material. Shell has acquired exclusive rights to use and develop the technology.
The carbon intensity of Shell’s products depends on the feedstocks chosen and the process and technologies we use. New technologies are enabling our progression from crops to more sustainable alternative feedstocks, such as agricultural waste, inedible oils or crops (cellulosic biomass) and manure. This improves the sustainability of the products for our customers, and it is our intention to transition towards wastes as our primary feedstocks in the future.