Valio and St1 form JV to produce biogas for transport

Food company Valio and energy firm St1 have formed a joint venture (JV) to produce biogas as a transport fuel in Finland.

Using dairy farm manure and agricultural by-products, the JV will produce the biogas while creating significant climate benefits and strengthening Finland’s energy and fuel self-sufficiency.

The JV aims to build 8-10 biogas production and liquefaction plants by 2030 and produce 1 TWh of renewable transport fuel, corresponding to a quarter of the biogas need for Finland’s roadmap to fossil-free transport. St1 will distribute the gas through its nationwide network of fuelling stations for heavy-duty vehicles.

“Alongside climate actions, we must secure the continuity of Finnish food production: expenses for farms are at a historic high, and fertiliser, energy and forage costs are continuing to rise,” said Teresa Laimio, chair of the board of directors of the JV, and Valio’s executive vice-president of sustainability and stakeholder relations.

Matti Oksanen, director of St1’s gas business, commented: “Achieving the target of the roadmap to fossil-free transport requires significant investments in securing the supply of biogas feedstock, subsidising investments, and increasing the use of biogas in transportation.

“Creating incentives for transport operators to invest in gas-powered fleets is also essential because the target requires 6,000-8,000 biogas-powered trucks on our roads by 2030. The use of biogas in heavy transport can achieve significant emissions reductions, and biogas has a key role also in St1’s own energy transition.”

The planned annual production capacity of the first liquefied biogas plant is 125 GWh, and the goal is for it to be operational by 2026. The planned capacity is “exceptionally large”, the companies noted. Based on preliminary studies, some 330 farms could participate. The climate impacts are also significant; the plant’s annual production is estimated to reduce CO2 emissions by 71,000 tonnes a year.

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