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Valio, St1 create JV to produce biogas for transport

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Food company Valio and energy company St1 are establishing a joint venture (JV) to produce renewable biogas from dairy farm manure and other agricultural by-products for use as a transport fuel.

The new company is targeting up to 1,000 GWh of biogas production by 2030, the amount is one-third of the biogas needed for Finland’s fossil-free transport roadmap.

Significant emissions reductions can be achieved by using biogas for heavy-duty transport. However, the prerequisite for creating a supply and demand that aligns with Finland’s biogas target is that the biogas-powered transport fleet becomes significantly more common in Finland, said the companies.

The JV will produce biogas primarily from cow manure, although other agricultural and food industry by-products can also be used.

Two alternatives will be considered for producing the biogas; one is that the biogas will be produced at individual farms or farms in a shared biogas plant; the other is that the biogas will be produced in a larger biogas plant to which the manure would be transported from local farms. Both options are possible in Valio and St1’s joint project.

St1 will mainly distribute the JV’s biogas through its nationwide network of fuelling stations for heavy-duty vehicles. Valio and St1 will also transition to the increased use of manure biogas in their own logistics.

“We have identified strategic focus areas where we can best achieve our goal in creating a sustainable carbon cycle,” said St1 Oy’s CEO, Mika Wiljanen.

“By investing in renewable energy and the transition of the energy sector while ensuring the necessary cash flow, we are solving global energy challenges.

“Entering the biogas business is a concrete step in the consistent and long-term implementation of our growth strategy.

“Domestic manure biogas can reduce the emissions from heavy-duty transport quickly and efficiently while simultaneously improving Finland’s fuel self-sufficiency. This is an opening from two Finnish players in bringing domestic manure biogas to the markets.”

Through biogas production, milk’s carbon footprint will decrease by one quarter, according to Valio, when both agricultural and transport emissions are taken into account.

Valio’s CEO, Annikka Hurme, commented: “Valio aims to cut milk’s carbon footprint to zero by 2035. The use of manure as a transport fuel is one of the most important handprint actions in our climate programme.

“The intention is that dairy farms can take part in the biogas production with a low threshold. It’s clear that production must be a profitable business also from the dairy farms’ perspective.”

Liquids and dry materials left over from production can be used as recycled fertilisers for fields, reducing the use of chemical fertilisers and nutrient run-off into waterways.