EU-Catalyst Backs Ørsted's FlagshipONE E-Methanol Project

On December 1, during COP28, Ørsted unveiled a significant boost to its FlagshipONE E-Methanol Project with Breakthrough Energy Catalyst acquiring a 15% equity stake in FlagshipONE and offering a grant, contingent on meeting funding conditions.

This support is expected to facilitate Ørsted's pursuit of long-term offtake agreements, introducing a novel model for the shipping sector to procure fuel. These agreements will play a pivotal role in securing the necessary capital for scaling the production of green fuels in future projects.

To further fortify the project, Ørsted anticipates additional backing in the form of a grant from Horizon Europe and a quasi-equity investment from the European Investment Bank (EIB) through InvestEU. The EU funding is derived from Horizon Europe and the EU Innovation Fund within the framework of InvestEU, following established governance procedures. Ørsted asserts that the EU funding will play a crucial role in supporting the initial commercial demonstration of FlagshipONE's technology.

Werner Hoyer, the President of the European Investment Bank, underscored the importance of innovative solutions in attaining climate neutrality. He expressed that guiding the world towards a net-zero trajectory demands transformative technologies, particularly in addressing the challenging-to-abate sectors of the economy. He expressed the EIB's intention to support Ørsted's FlagshipONE project through the EU-Catalyst Partnership to decarbonize the heavy shipping industry.

Mads Nipper, Group President and CEO of Ørsted, highlighted the strategic partnership with Breakthrough Energy Catalyst, the European Commission, and the EIB. He expressed confidence in applying Ørsted's experience in scaling technologies to advance the maturation of the European Power-to-X (P2X) industry.

Rodi Guidero, Executive Director of Breakthrough Energy, emphasized the tangible impact of Breakthrough Energy Catalyst's approach in advancing FlagshipONE. He outlined the collaboration's role in progressing through development, construction commencement, and ultimately achieving operational status, serving as a blueprint for accelerating first-of-a-kind solutions aligning with Europe's decarbonization goals.

FlagshipONE, originally developed by Liquid Wind and acquired by Ørsted in December 2022, received its final investment decision (FID) and commenced construction on May 24, 2023. Situated at the biomass-fired combined heat and power plant Hörneborgsverket in Örnsköldsvik, operated by Övik Energi, FlagshipONE will produce e-methanol using renewable electricity and biogenic carbon dioxide captured from Hörneborgsverket.

The project will utilize steam, process water, and cooling water from Hörneborgsverket, with excess heat from the e-methanol production process integrated into Övik Energi's district heating supply. With an expected operational date in 2025, FlagshipONE aims to produce approximately 50,000 tonnes of e-methanol annually, enabling >95% reduction in carbon emissions for shipping industry off-takers compared to conventional fossil fuels.