Energy company St1 would like to produce electric fuels – EU Commission policy could block production | Yle news

The European Commission wants to link the production of electric fuels directly to the production of renewable electricity. Thus, electricity used for production could not be purchased through the electricity grid. According to energy company St1, this makes it difficult to start production.

EU regulation threatens the production of electric fuels

EU regulation threatens the production of electric fuels

Energy company St1 criticizes the European Commission’s proposal for rules of the game for the production of electric fuels.

The company wants to produce synthetic fuels, ie electric fuels, but according to it, EU regulations make it difficult to start production.

The European Commission wants to link the production of electric fuels directly to the production of renewable electricity.

– If we go to the model proposed by the European Commission, then it will slow down or even prevent the emergence of such production, St1’s Director of Responsibility Timo Huhtisaari says.

Carbon dioxide in electric fuels can be removed from industrial flue gases. Photo: Ismo Pekkarinen / AOP

Electric fuels are fuels that are made by removing hydrogen from water using electricity and mixing it with carbon dioxide from, for example, industrial flue gases.

In particular, electric fuels are intended to replace fossil transport fuels such as petrol and diesel.

Electricity directly from the wind farm

The European Commission has proposed linking the production of electric fuels directly to the production of renewable electricity. According to the proposal, the production plant should therefore receive its electricity directly from, for example, a wind farm, not from the public electricity grid.

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Electric fuels are to be produced, for example, from renewable electricity from wind turbines. Photo: Mikko Savolainen / General

This means that electric fuel production plants should be physically connected to wind farms, for example. It would restrict their construction to areas where there is no production of renewable electricity.

Research Director of Lappeenranta University of Technology Petteri Laaksonen is astonished by the EU Commission’s proposal.

– We have had a guarantee of origin system for electricity for ten years. It has made it possible to buy wind electricity directly from the electricity grid as wind electricity and hydropower as hydropower, Laaksonen points out.

According to Laaksonen, manufacturers of electric fuels should also be able to buy renewable electricity directly from the grid.

Petteri Laaksonen, Research Director at Lahti University of Technology in Lappeenranta, wonders why the EU intends to link the production of electric fuels directly to the production of renewable electricity. Photo: Mikko Savolainen / General

The EU does not want to increase fossil electricity production

The Commission’s proposal is based on the EU’s desire to ensure that the production of electric fuels reduces, not increases, greenhouse gas emissions.

– The production of electric fuels requires a lot of electricity. The EU does not want more fossil fuel electricity to be used to produce them, Industry Adviser Pekka Grönlund about the Ministry of Employment and the Economy.

However, he said that the EU Commission’s position on the matter has not yet been finalized and the Commission will probably clarify the matter before the end of the year.

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According to Grönlund, Finland aims to ensure that electric fuels could also be produced with renewable electricity directly from the electricity grid.

A special problem in south-eastern Finland

Connecting the production of electric fuels directly to the production of renewable energy is particularly problematic in south-eastern Finland.

This is because the construction of wind power in the area has virtually come to a halt. The reason is that the Defense Forces do not grant permits to wind farms because they interfere with area surveillance investigations.

Thus, there are hardly any wind farms in the south-east to run the production of electric fuels.

According to Timo Huhtisaari, St1’s Director of Responsibility, a considerable amount of electric fuels would be needed for the market quickly. Today, the aim is to replace fossil fuels with biofuels. However, this is not enough.

– We do not have enough raw materials for the production of biofuels so that we can meet the goals of reducing the use of fossil fuels, Huhtisaari says.

The market already exists

According to Huhtisaari, the market for electric fuels has already been created legally.

– According to EU guidelines in the summer, synthetic fuels will see a significant role in the EU over the next eight years. Legislation for electric fuels has been created in both Finland and the EU, Huhtisaari says.

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In practice, this means that electric fuels have been included alongside biofuels in the fuel distribution obligation. The distribution obligation means that the transport fuel distributor must mix biofuel with fossil fuel.

Today, 18 percent of biofuels need to be added to fossil fuels, but the number is gradually rising to 30 percent by 2029. From 2023 onwards, the distribution obligation can also be met in Finland with electric fuel.

The problem is that there is practically no electric fuel on the market yet and no production facilities are yet under construction.

Pilot plants are needed

Before building the actual production plant, the energy company St1 wants to get to try out the production of electric fuels. The pilot plant should be large enough.

– It is better to build an industrial-scale pilot plant first than to start building production plants of hundreds or billions of euros at the outset, Huhtisaari says.

Such a pilot plant has been planned in Joutseno, Lappeenranta. The plant would receive carbon dioxide from the Finnsement plant in Lappeenranta and hydrogen as a residue from Kemira’s Joutseno plant.

Read more: The study was completed: a pilot plant producing synthetic fuels could be built in Lappeenranta

In this plan, too, EU regulation has become a problem. Under current EU rules, hydrogen from the Kemira plant cannot be accepted as a raw material for renewable fuel.

– Such hydrogen produced as a residue is interpreted in the distribution obligation as fossil fuel and we should sell the fuel produced from it at the price of fossil fuel. This will prevent the plant from being implemented for the time being, says Timo Huhtisaari, St1 Energy Company’s Director of Sustainability.

The production of biofuels and electric fuels is currently even more expensive than the production of fossil fuels. Their profitable production is only possible if they can be sold at a higher price than fossil fuels under the distribution obligation.