15 Aug 2024

Ørsted Discontinues E-Methanol Investment in Örnsköldsvik

What was supposed to become Europe’s largest facility for e-methanol for maritime use, FlagshipONE in Örnsköldsvik, is being shut down with immediate effect. This was announced by the owners, Ørsted. However, Liquid Wind, which developed the concept, will continue with their upcoming facilities in Sundsvall and Umeå

In May 2023, the groundbreaking ceremony for what was to become FlagshipONE took place. Here, Ørsted was to produce e-methanol using renewable hydrogen from wind power along with captured biogenic carbon dioxide from the nearby biofuel-fired combined heat and power plant, Hörneborgsverket.

In December last year, Bill Gates’ Breakthrough Energy, in collaboration with the EU and the European Investment Bank, invested 1.3 billion SEK in the project. However, Ørsted has now decided to discontinue the investment.

“The market for green fuels in Europe has developed more slowly than expected, and we do not see it accelerating quickly enough in the short to medium term. Therefore, we are ceasing the development of FlagshipONE before entering the most critical and complex phase of construction, and before committing to further expenditures for a project that has had higher costs than expected,” says Olivia Breese, CEO of Ørsted Region Europe.

Remains Optimistic

FlagshipONE was planned to produce 50,000 tons of e-methanol annually and would require a lot of energy in several ways. Therefore, Övik Energi was to play a key role by supplying electricity, steam, water, cooling, and carbon dioxide.

“It is, of course, sad news that Ørsted has chosen to end the development of what was to become FlagshipONE. It is a strategic decision by Ørsted based on the slower-than-expected demand for renewable fuels for maritime use,” says Roland Nordin, CEO of Övik Energi.

“At the same time, we are optimistic about the future of the transition to renewables, even though some segments are progressing more slowly than anticipated. It is too early to say if anyone else will make a similar investment in the area here in Örnsköldsvik, but there are good conditions for making industrial investments in the area where FlagshipONE was to be located, and the infrastructure is in place,” says Roland Nordin.

Liquid Wind Continues with Plans

The Flagship concept was developed by the Swedish company Liquid Wind. Their business idea is projects for e-methanol for maritime use. They then sell the project to a company that builds and operates the facility.

FlagshipONE was the first facility, and two more facilities are being planned: FlagshipTWO in Sundsvall and FlagshipTHREE in Umeå. These projects are still owned by Liquid Wind and are not affected by Ørsted’s decision to discontinue FlagshipONE.

“It is naturally unfortunate that Ørsted has chosen not to proceed with the facility, but it has no consequences for Liquid Wind and our plans. Sweden is still a suitable place for electrofuels, and we are continuing with the projects in Sundsvall and Umeå,” says Klaudija Cavala, Communications Manager at Liquid Wind, and continues:

“We have several solid projects under development in the Nordic countries, and our goal is to reach more than ten projects with a final investment decision by 2027.”

Drivkrafter för grön sjöfart

Klaudija Cavala pekar också på att rederier fortsätter att beställa metanoldrivna fartyg.

– Det finns en mycket stark drivkraft från rederier och deras kunder för att utveckla grön sjöfart, men det finns också en brist på betydande finansiering för att underlätta att bygga den produktionskapacitet som krävs för elektrobränslen som e-metanol, säger hon.

Hur stort intresset är hos investerare att köpa FlagshipTWO och FlagshipTHREE vill inte Klaudija Cavala säga utan hänvisar till att de lämnar ut information om investerare för varje projekt ”när tiden är rätt”.

På bild: Skiss på den planerade FlagshipONE i Örnsköldsvik.
Foto: Ørsted