Vattenfall has closed an agreement with Swedish refiner Preem to deepen a partnership for the production of fossil-free hydrogen on a large scale for biofuel production, electrification and power supply.

The two companies will work on a joint project for fossil-free hydrogen production through water electrolysis at Preem’s Hisingen island refinery outside Gothenburg. The aim is to develop a 20MW plant, which would be Europe’s largest water electrolysis plant for the refinery sector.

"Hydrogen is an important component in our production of renewable fuels, but supplies of fossil-free hydrogen are low,” Preem chief executive Petter Holland said.

“The partnership with Vattenfall allows us to produce fossil-free hydrogen using electrolysis, which will increase the renewability of our fuels by a few more percent. The plant maximises the currently available grid capacity, which needs to be expanded to reach its full potential."

Most hydrogen is currently produced using fossil-fuel sources, mainly natural gas. The element is widely used for the production of chemicals and in industry, and only slowly emerging as transport fuel. A wide-scale use of hydrogen made from fossil-free sources is seen as a promising means to decarbonise transport, but its production today is still expensive.

Sweden’s ambitious climate targets require a reduction of CO2 in the transport sector by 70% between now and 2030, which puts pressure on companies to provide more renewable-sourced fuels.

"Partnerships with Preem and Swedish industry are crucial if we are to achieve success in the most important issue of our time: meeting the climate challenge,” Vattenfall chief executive Magnus Hall said.

“The new agreement deepens, reinforces and broadens the partnership. It gives us the potential to produce fossil-free fuel on a large scale."

Preem’s objective is to produce three million cubic metres of renewable fuel by 2030, which it says together with direct electrification would account for the bulk of the Sweden’s CO2 emission reduction in transport.