Unutilized residues can increase biogas production with one terawatt hour
Only a small fraction of the organic residues from the Swedish pulp and paper industry are today used for biogas production. Recently performed research shows that biogas corresponding to one terawatt hour can be produced from this residue with the added benefit of greatly reducing the need for electricity in present purification processes. An extended use of these residues would also mean a better distribution of biogas producing facilities in Sweden.
The research leading to these results has been performed at the department of Environmental Change at Linköping University and is a collaboration between the university, Scandinavian Biogas Fuel and Pöyry. The project was financed by the Swedish Energy Agency.
“The results from the project, that was initiated in 2011, forms a base for implementation within the pulp and paper industry and means that we can start an efficient biogas production in regions where other types of substrate are scarce,” says Scandinavian Biogas´ R&D director Jörgen Ejlertsson.
The project has generated a better understanding of the prerequisites within the industry and resulted in a number of biogas production concepts depending on the pulp and paper process in place. This means that efficient biogas processes, where the investment cost per cubic meter biogas are reduced, can be achieved. A biogas production corresponding to one terawatt hour would mean increasing Swedish biogas production by 60% and corresponds to the total amount of biogas upgraded to vehicle fuel in 2014.
The first production site where this knowledge will be put to use is the plant now under construction at Norske Skogs paper and pulp mill Skogn outside Trondheim. The plant will be built by Scandinavian Biogas affiliated company Biokraft AS and will produce liquid biogas corresponding to 125 GWh.
“To achieve a sustainable energy transformation the production of renewable energy carriers needs to be increased. To be able to use residues from pulp and paper production for this purpose is “killing two birds with one stone”; energy rich biogas is produced at the same time as the need for electricity used in wastewater purification can be reduced by up to 50%. For Scandinavian Biogas this is a big step forward in our ambition to reach an in-house biogas production corresponding to one 1 terawatt hour energy by the year 2020,” says Scandinavian Biogas´ CEO and president Matti Vikkula.
For further information please contact:
Matti Vikkula, CEO Scandinavian Biogas, +46 70 597 99 38, email@example.com or, Jörgen Ejlertsson, Director of R&D, Scandinavian Biogas Fuels, +46 73 993 95 73, firstname.lastname@example.org
Scandinavian Biogas Interim Report for the period 1 January – 30 June 2020 Scandinavian Biogas Fuels International AB (publ) Org.nr. 556528-4733
Improved cash flow during January–June 2020 period compared to 2019
Second quarter in brief
- Net sales totalled SEK 77.4 million (89.6), a year-on-year decrease of 13.6%.
- Operating EBITDA for the period was SEK 13,2 million (17.7).
- EBITDA was SEK 5.8 million (17.7). The judicial decision issued in South Korea in July 2020 had a negative impact of SEK 11.6 million on the item ‘raw materials and consumables’ for the quarter.
- The Group posted an operating loss of SEK -19.9 million (-4.4), due in part to the judicial decision in South Korea and to insurance compensation received in Norway.
- The Group posted a loss after tax of -37.4 million (-23.3).
- A total negative impact on earnings of SEK 18.0 million was posted during the period due to the judicial decision in South Korea.
- The credit facility of 200 MSEK was noticed during the quarter. Repayment should be performed before the 30th of September.
- Operating cash flow totalled SEK 26.6 million (-3.9), due in part to improved underlying profitability and improved working capital.
First half-year in brief
- Net sales totalled SEK 174.6 million (176.6) MSEK, a year-on-year decrease of 1.1%.
- Operating EBITDA for the period was SEK 37,6 million (36.3), confirmation that underlying profitability is on a par with the corresponding period last year.
- EBITDA was 36.9 million (36.3). The year-on-year improvement is mainly due to one-off effects: insurance compensation of SEK 10.9 million received in Norway and the negative entry of SEK 11.6 million in conjunction with the judicial decision in South Korea.
- The Group posted an operating loss of SEK -7.2 million (-7.6).
- The Group posted a loss after tax of SEK -39.5 million (-35.6).
- A total negative impact on earnings of SEK 18.0 million was posted due to the judicial decision in South Korea.
- Operating cash flow totalled SEK 61.9 million (-11.1), due in part to improved underlying profitability and improved working capital.
Significant events after the end of the period
Business opportunities throughout the world have been impacted by the COVID-19 in early 2020. The impact on the Group’s business after the end of the period remains limited. Management is closely monitoring the situation and regularly assessing ways in which the situation may affect operations.
The judicial decision in South Korea regarding the upgrading dispute was issued in early July. The ruling was negative, and the previous decision was upheld. The outcome had a negative impact on consolidated profit/loss of SEK 18.0 million.
Management continues to actively work with various financing solutions to ensure a more long-term financing solution. Management is engaged in concrete negotiations with several independent parties deemed capable of refinancing the short-term credit facility of SEK 200 million. As of the date of publication of this interim report, however, such financing has not been finalised.
CEO comments on the interim period
‘The year began well and satisfactorily during the first quarter, but we cannot be satisfied with second quarter results. We failed to achieve the planned profitability, for several reasons. In July we received the unexpected judgment in the upgrading dispute in South Korea. Measures were taken during the second quarter to mitigate the judgement’s negative impact.
Although COVID-19 has had a major economic impact globally and in Scandinavia, its impact on the Group’s business has been limited. The Group is continuing its preparations for the planned growth opportunities, focused on Stockholm LBG and Skogn II investments. The timing of other growth opportunities is affected by financing options in domestic and foreign capital, which have been impacted by COVID-19. Based on the Biogas Commission’s proposal, published before the turn of the year, it appears that conditions for the Swedish biogas industry will be strengthened. The 2020 spring budget also increased the production subsidy for biogas production in Sweden by SEK 120 million.’
President and CEO
All financial information in this report pertains to the Group unless otherwise specified. Figures in brackets relate to the year-earlier period.
Every care has been taken in the translation of this report. However, in the event of discrepancies, the original Swedish will supersede the English translation.
The interim report for the second quarter 2020 for Scandinavian Biogas Fuels International AB (publ) is now available on www.scandinavianbiogas.com
For further information, contact Matti Vikkula, CEO and president,
+46 70 597 99 38, email@example.com
The information in this press release is such that Scandinavian Biogas Fuels International AB (publ) must disclose in accordance with the EU Market Abuse Regulation (EU MAR) No. 596/2014. The information was submitted for publication on August 20, 2020, at 17:30 CET.