French project developer Verso Energy has signed a co-operation agreement with the Finnish city of Oulu to work on a €1.4bn ($1.47bn) facility processing green hydrogen into synthetic aviation fuels, or “e-SAF”.
Oulu’s government will advance the zoning of the city port’s green transition industrial area to fit the project, which could produce 80,000 tonnes of e-SAF per year.
“In Finland, the zoning process can run parallel to a company's project planning, offering more flexibility compared to some other countries," said Marko Kilpeläinen, director of urban environment services for the city government.
The EU has set out mandates in its RefuelEU Aviation regulation for 1.2% of aviation fuel to be produced from renewable hydrogen and captured carbon by 2030, as well as requiring 2% sustainable aviation fuel by this year.
So far, uptake of even biogenic SAFs has been slow, with Finland’s largest domestic airline Finnair’s SAF consumption only making up 0.2% of its overall fuel mix in 2023.
The EU regulation also includes penalties worth twice the difference of the average price of conventional jet fuel and SAFs per tonne of non-compliant fuel, which some analysts suggest will drive the aviation industry to sign offtake agreements, despite the high price of green hydrogen-based fuels.
“Finland is a very attractive country for e-SAF production, and the Oulu site has all the qualities to be a very competitive site at the European level,” Antoine Huard, CEO of Verso Energy.
The French firm has three green hydrogen or e-SAF projects under development in its home country, although none are due to be commissioned in the next year.
The agreement with Oulu is also due to expire at the end of next year, with the parties expected to work towards an implementation deal by then with defined threshold investments and a clear division of responsibilities.
