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The Volvo Group and Daimler Truck AG to lead the development of sustainable transportation by forming joint venture for large-scale production of fuel cells

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The Volvo Group and Daimler Truck AG to lead the development of sustainable transportation by forming joint venture for large-scale production of fuel cells. Image: Daimler Truck AG
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Sharing the Green Deal vision of sustainable transport and a carbon neutral Europe by 2050, two leading companies in the commercial vehicle industry, Daimler Truck AG and the Volvo Group, have signed a preliminary non-binding agreement to establish a new joint venture. The intention is to develop, produce and commercialize fuel cell systems for heavy-duty vehicle applications and other use cases. Daimler will consolidate all its current fuel cell activities in the joint venture. The Volvo Group will acquire 50% in the joint venture for the sum of approximately EUR 0.6 billion on a cash and debt free basis.

“Transport and logistics keep the world moving, and the need for transport will continue to grow. Truly CO2-neutral transport can be accomplished through electric drive trains with energy coming either from batteries or by converting hydrogen on board into electricity. For trucks to cope with heavy loads and long distances, fuel cells are one important answer and a technology where Daimler has built up significant expertise through its Mercedes-Benz fuel cell unit over the last two decades. This joint initiative with the Volvo Group is a milestone in bringing fuel cell powered trucks and buses onto our roads,” says Martin Daum, Chairman of the Board of Management Daimler Truck AG and Member of the Board of Management of Daimler AG.

“Electrification of road transport is a key element in delivering the so called Green Deal, a carbon neutral Europe and ultimately a carbon neutral world. Using hydrogen as a carrier of green electricity to power electric trucks in long-haul operations is one important part of the puzzle, and a complement to battery electric vehicles and renewable fuels. Combining the Volvo Group and Daimler’s experience in this area to accelerate the rate of development is good both for our customers and for society as a whole. By forming this joint venture, we are clearly showing that we believe in hydrogen fuel cells for commercial vehicles. But for this vision to become reality, other companies and institutions also need to support and contribute to this development, not least in order to establish the fuel infrastructure needed,” says Martin Lundstedt, Volvo Group President and CEO.

The Volvo Group and Daimler Truck AG will be 50/50 partners in the joint venture, which will operate as an independent and autonomous entity, with Daimler Truck AG and the Volvo Group continuing to be competitors in all other areas of business. Joining forces will decrease development costs for both companies and accelerate the market introduction of fuel cell systems in products used for heavy-duty transport and demanding long-haul applications. In the context of the current economic downturn cooperation has become even more necessary in order to meet the Green Deal objectives within a feasible time-frame.

The common goal is for both companies to offer heavy-duty vehicles with fuel cells for demanding long-haul applications in series production in the second half of the decade. In addition, other automotive and non-automotive use cases are also part of the new joint venture’s scope.

To enable the joint venture, Daimler Trucks is bringing together all group-wide fuel cell activities in a new Daimler Truck fuel cell unit. Part of this bundling of activities is the allocation of the operations of “Mercedes-Benz Fuel Cell GmbH”, which has longstanding experience in the development of fuel cell and hydrogen storage systems for various vehicle applications, to Daimler Truck AG.

The joint venture will include the operations in Nabern/Germany (currently headquarters of the Mercedes-Benz Fuel Cell GmbH) with production facilities in Germany and Canada.

The signed preliminary agreement is non-binding. A final agreement is expected by Q3 and closing before year-end 2020. All potential transactions are subject to examination and approval by the responsible competition authorities.

Facts: Fuel cells and hydrogen as fuel

  • A hydrogen fuel cell converts the chemical energy of the fuel, in this case hydrogen, and oxygen (in the air) into electricity. The electricity powers the electrical motors that propel an electrical vehicle.
  • There are two main ways to produce the hydrogen needed. So-called green hydrogen can be produced locally at the gas station, using electricity to convert water into hydrogen. Blue hydrogen is expected to be produced from natural gas, utilizing carbon capture technology to create a carbon neutral fuel.

Environment

‘e5 Consortium’ established to promote zero-emission electric vessel

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‘e5 Consortium’ established to promote zero-emission electric vessel. Image: MOL
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Seven companies-Asahi Tanker Co., Ltd., Idemitsu Kosan Co., Ltd., Exeno Yamamizu Corporation, Mitsui O.S.K. Lines, Ltd., Tokio Marine & Nichido Fire Insurance Co., Ltd., Tokyo Electric Power Company, and Mitsubishi Corporation-today announced establishment of the “e5 Consortium,” with the goal of establishing new ocean shipping infrastructure services through various initiatives to develop, realize, and commercialize zero-emission electric vessels.

Coastal shipping in Japan faces structural issues such as a shortage of mariners due to the aging of the seagoing workforce, not to mention the aging of the vessels. In addition, the ocean shipping industry has urged the coastal shipping industry to reduce emissions of greenhouse gases (GHGs) as one of Japan’s measures to address climate change.

The seven e5 Consortium corporate members are focusing their attention on fulfilling the potential of electric vessels to solve these urgent issues. The consortium aims to establish a platform that offers innovative ocean shipping infrastructure services based on electric vessels bringing to bear the strength, technological know-how, networks, and other advantages of each member company.

As the first phrase of the project, the consortium plans to launch the world’s first zero-emission electric tanker, powered by large-capacity lithium ion batteries, in March 2022 (Note 1). e5 Lab. Inc. will serve as the executive office of the e5 Consortium.

The e5 Consortium will promote the sustainable growth of coastal shipping in Japan and contribute to the nation’s social and economic development by providing added value to the coastal shipping industry through the development and introduction of advanced vessels.

What is ‘e5’?
A provider of safe, reliable, and high-quality transport service, based on the realization of five core values: “electrification,” “environment,” “evolution,” “efficiency,” and “economics.”

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New P4G getting to zero coalition partnership will map the business case for shipping’s sustainable energy shift

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New P4G getting to zero coalition partnership will map the business case for shipping’s sustainable energy shift. Image: Pixabay
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Global Maritime Forum, World Economic Forum, Friends of Ocean Action, International Association of Ports and Harbors, Environmental Defense Fund, and University College London Energy Institute are proud to announce that they have partnered with global network P4G.

The new P4G Getting to Zero Coalition Partnership builds on the Getting to Zero Coalition, which unites more than 130 public and private organizations and has been endorsed by Governments in 14 countries. The goal of the Coalition is to have commercially viable zero emission vessels operating along deep sea trade routes by 2030 as a key step towards achieving the climate goals set by UN maritime agency, the International Maritime Organization.

“Investing in abundant untapped renewable resources can be one of the most effective measures in reaching net zero by 2050 in order to avoid serious impacts of climate change. This is where the Getting to Zero Coalition partnership comes in and P4G is pleased to be a part of this wider global energy transition. We look forward to further collaborating with change-makers and leaders around the world to accelerate decarbonizing shipping and bring sustainable development gains to developing and emerging countries,” says Ian de Cruz, P4G Global Director.

Public-private collaboration is key

Collaborative efforts are a requisite to overcome the barriers and reap the rewards of shipping’s green, systemic change.

“The P4G Getting to Zero Coalition Partnership will engage with public and private stakeholders from Indonesia, Mexico and South Africa, and together identify concrete, actionable business and investment opportunities that can accelerate shipping’s decarbonization and contribute to sustainable and inclusive economic growth,” says Johannah Christensen, Managing Director, Head of Projects & Programmes, Global Maritime Forum.

Three country-specific opportunity reports will serve as a national blueprint for reducing emissions from shipping and generate learnings that can be used to involve other developing and emerging economies.

A trillion-dollar market opportunity

Shipping’s decarbonization is an integral part of the wider energy transition. Marine vessels account for about 4% of global oil demand, making shipping’s green transition both a climate necessity and a trillion-dollar market opportunity to develop the ships and fuels that will drive this transition.

“The maritime industry has made it clear that the future of shipping is carbon free,” says Aoife O’Leary, Director at Environmental Defense Fund. “The industry’s target of reducing greenhouse gas emissions by at least 50% by 2050 will create a trillion-dollar market opportunity to kick start a worldwide transition to zero carbon shipping.”

Infrastructure investment can drive substantial development gains

Investment in the land-based energy infrastructure that is required to decarbonize shipping holds the potential to drive substantial development gains.

A study by the Energy Transitions Commission and UMAS for the Getting to Zero Coalition estimates the cumulative infrastructure investment that is needed in the next 20 years for shipping to make the transition to zero carbon energy sources to be approximately US$1-1.4 trillion. The land-based infrastructure and production facilities make up around 87% of the total.

“Shipping’s decarbonization can spur investment in large-scale energy projects and in ports of developing and emerging countries with access to abundant untapped renewable energy resources that can be converted into zero carbon fuels and power maritime shipping and a range of other industries,” says Patrick Verhoeven, Managing Director-Policy and Strategy, International Association of Ports and Harbors.

Shipping’s decarbonization should leave no country behind

Any agreement on policy to enable shipping’s transition from fossil fuels must respect principles of equity and ensure there are no strong negative impacts on developing countries.

“It is crucial that developing countries are leaders of shipping’s decarbonization. This will need public-private multi-stakeholder dialogue to ensure that all circumstances are considered both in SIDS and LDCs and the countries this project will study.

The P4G Getting to Zero Coalition Partnership will explore how it can accelerate shipping’s green transition while taking into consideration the technological and economic impact on trade and opportunities for developing states, to ensure access to affordable, reliable, sustainable and modern shipping for all,” says Dr Tristan Smith, Reader at the UCL Energy Institute and Director of UMAS.

An opportunity to rebuild a better more resilient economy

The P4G Getting to Zero Coalition Partnership aims to identify new growth opportunities that will be needed as countries seek to recover better from the current COVID-19 pandemic.

As policymakers formulate policies and stimulus measures to kickstart the global economy, they have a unique opportunity to rebuild a better more sustainable and resilient economy by taking the long-term impacts of investments on the climate into consideration.

Lessons of the coronavirus tell us that there is a need for a resilient and future-proof strategy to shape a sustainable future to avoid another global emergency that will have destructive and irreversible consequences on human wellbeing.

“I warmly welcome P4G support for this vital Mission Possible Platform industry initiative, one of seven industry transitions we are championing, which in this case will accelerate the move to net zero emissions in the global shipping sector. The Getting to Zero coalition has set an ambitious goal for shipping and is shaping up to be a leading example of what is possible: creating a zero emission industry by a transition that creates sustainable jobs and prepares the sector better for the shocks of the future,” says Anthony Hobley, Director of Mission Possible Platform, World Economic Forum

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Wärtsilä and Vantaa Energy Ltd. to cooperate on a carbon neutral synthetic biogas production project in Finland

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Wärtsilä and Vantaa Energy Ltd. to cooperate on a carbon neutral synthetic biogas production project in Finland. Image: Wartsila
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The technology group Wärtsilä and Vantaa Energy Ltd., a Finnish energy company, have signed an agreement on a joint concept feasibility study for a Power-to-Gas facility at Vantaa Energy’s waste-to-energy -plant in the city of Vantaa in the capital region. The co-development agreement was signed in May and is valid for 12 months.

The Power-to-Gas facility would produce carbon-neutral synthetic biogas using carbon dioxide emissions and electricity generated at the waste-to-energy plant. The purpose of the joint study is to confirm the optimal size of the project, the cost of synthetic biogas for district heating, and to understand the boundary conditions for project feasibility. Once feasible, the parties intend to continue joint development of the project towards a commercial-scale pilot project. Synthetic biogas would replace the use of conventional natural gas in district heating, thereby reducing Vantaa Energy’s carbon dioxide emissions.

“We need to take fast and determined action in order to stop the climate crisis. In this situation, we energy companies have a significant role to play. We have stepped up the pace, and we will end the use of coal already in 2022. We want to be a driver for change in the energy sector. We are actively and with an open mind seeking the best possible methods of producing energy in a smart and sustainable way and at a reasonable price. This project is an important step towards our goals,” says Jukka Toivonen, CEO of Vantaa Energy Ltd.

“Wärtsilä has been actively working on and investing in Power-to-X research since 2018, during which time we have gained a thorough general understanding of the technology. This co-development agreement will allow us to apply the know-how into a real project. We are very excited about this opportunity as it will demonstrate the feasibility of synthetic fuels as an integral part of power and heat systems, while developing the overall sector coupling concepts going forward. Both Vantaa Energy and Wärtsilä share a vision of a 100% renewable energy future, and this project is a perfect place to start building that vision into concrete business,” says Matti Rautkivi, Director, Strategy and Business Development at Wärtsilä Energy Business.

Wärtsilä will contribute its know-how in Power-to-Gas process and technologies, while Vantaa Energy will bring its experience and understanding of the district heating business and project-specific requirements to the feasibility study.

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