Vattenfall Aims for Electrofuels in Aviation Amid Market Hesitation: A Look Towards the Future

Vattenfall Aims for Electrofuels in Aviation Amid Market Hesitation: A Look Towards the Future

(IN BRIEF) Vattenfall is actively pursuing the development of electrofuels for the aviation industry, specifically focusing on producing electro-sustainable aviation fuel (eSAF) on a large scale. Despite this ambition, the market remains hesitant, with significant growth expected to be delayed until the 2030s. Currently, there are no long-term fuel contracts for eSAF, which has hindered investment decisions in new production facilities. Vattenfall’s HySkies project, aimed at launching production around 2030 in collaboration with Shell, is currently paused, and the same fate may affect its Carbon Capture and Utilization project. Vattenfall emphasizes its commitment to transitioning to a fossil-free society and believes that once market conditions stabilize, it will be prepared to revive these initiatives.

(PRESS RELEASE) STOCKHOLM, 4-Oct-2024 — /EuropaWire/ — Vattenfall is actively pursuing the development of electrofuels for the aviation sector, focusing on large-scale production of fossil-free alternatives like electro-sustainable aviation fuel (eSAF). However, the current market landscape is marked by hesitancy, with significant growth and maturity expected to be delayed until the 2030s.

Vattenfall is committed to evaluating innovative opportunities aligned with its overarching strategy. While many projects emerge from feasibility studies, the timeline for initiating investments can be protracted, depending on various prerequisites.

Per Sundell, Senior Business Developer at Vattenfall, stated, “In relation to the HySkies project, which aimed for production to commence around 2030, we are not receiving the necessary signals from market participants at this time. The indications for the development of electrofuels suggest that market maturation will occur later than initially anticipated, making it premature to advance some projects currently.”

Despite the projected growth in the electrofuels market, Sundell noted the absence of long-term fuel contracts for eSAF, which has contributed to the hesitance in making investment decisions regarding new production facilities.

Since 2021, Vattenfall has collaborated with Shell on the HySkies project to explore the feasibility of producing eSAF at scale in Forsmark. However, both companies now believe that market readiness will take longer than originally assessed, resulting in the current pause of the HySkies initiative. This development may also affect Vattenfall’s Heat Carbon Capture and Utilization (CCU) project in Uppsala. Should market demand increase or the HySkies project resume, there may be opportunities to revitalize the development of CCU.

“Vattenfall sees itself as a partner in the transition to a fossil-free future. As soon as market conditions clarify and demand increases, we are prepared to reactivate this or similar projects. The conditions in the Forsmark area remain conducive,” Sundell added. “We have gained significant insights into the potential of electrofuels, identifying key success factors and how to construct a new value chain for production, as well as the role an energy company can play in that ecosystem.”

In addition to the HySkies initiative, Vattenfall is pursuing other sustainable fuel partnerships, such as its feasibility study for electrofuels in collaboration with St1 on the west coast, where similar challenges have arisen.

Mikael Nordlander, Head of Vattenfall’s Industrial Partnerships, emphasized, “There is an urgent need for solutions to ensure the viability of future air travel. Currently, we lack realistic alternatives to mitigate the climate impact of the hundreds of millions of cubic meters of fossil aviation fuel consumed globally each year. Our recent efforts have reinforced our belief in eSAF as the primary candidate for producing substantial volumes of fossil-free aviation fuel within the next 10 to 15 years. However, we must further address production costs and energy efficiency challenges.”

About Electrofuels:

Electrofuel, a type of Sustainable Aviation Fuel (SAF), is produced using fossil-free electricity, recycled carbon dioxide, and water instead of fossil raw materials. This process employs electrolysis to generate fossil-free hydrogen. Current aircraft are certified to operate with up to 50% SAF, with the remainder being traditional jet fuel.

Media Contact:

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Email: press@vattenfall.com

Source: Vattenfall AB