Sumitomo and Skovgaard Energy partner to boost biogas and SAF

Sumitomo Corporation has formed a new joint venture with Danish renewable energy firm Skovgaard Energy to accelerate the development of sustainable aviation fuel (SAF) and expand biogas production across Denmark.

The new company, North Sky, will focus on producing approximately 40 million Nm³ of biogas annually - enough to meet the gas needs of around 20,000 Danish households.

It also plans to build on Skovgaard Energy’s existing biogas infrastructure while exploring the potential of e-SAF, an emerging sustainable aviation fuel made from carbon dioxide and green hydrogen.

This marks Sumitomo Corporation’s first foray into the biogas sector and forms a central part of its broader strategy to scale up its energy solutions business, one of the key pillars of its Medium-Term Management Plan.

Denmark, known for its agricultural output, is positioning biogas as a cornerstone of its transition to carbon neutrality. With a national target to fully replace fossil natural gas with biogas by 2030, the country is investing in infrastructure that utilises organic waste as renewable energy sources. Biogas plays a dual role: reducing greenhouse gas emissions and increasing energy self-sufficiency by relying on domestic raw materials.

Skovgaard Energy, founded in 1999, has a strong track record in renewable energy and already operates biogas facilities that process cattle manure. The company has also secured long-term feedstock supply agreements with Danish agricultural cooperatives, ensuring a steady input of raw materials through to 2032. It has also secured land suitable for Power-to-X projects, including the development of e-SAF.

By combining Sumitomo Corporation’s extensive European business network with Skovgaard Energy’s technical expertise and local partnerships, North Sky aims to become a key player in Denmark’s green energy transition.

Denmark’s near-total reliance on renewable electricity makes it well placed to produce green hydrogen, a key component in the synthesis of e-SAF. With its own network of biogas plants, the new joint venture will also be able to supply the necessary biomass-derived carbon dioxide efficiently and cost-effectively.

The collaboration aligns with the Sumitomo Corporation Group’s wider commitment to achieving carbon neutrality across its operations by 2050. The group is already active in other bioenergy projects globally, including the MORISORA Project in Japan for domestic SAF production, and a partnership with Malaysian firm reNIKOLA to explore biomethane opportunities in Southeast Asia.