Preem and Vattenfall have partnered to study the use of climate-smart hydrogen gas in the large scale production of biofuel for the Swedish market.

The partnership will also evaluate options to produce green hydrogen gas by using electricity generated from hydro and wind power.

Both firms will form a work group to carry out pilot study on the large scale biofuel project. The cost of the project will be equally shared by both parties.

Preem aims to generate about three million cubic metres of renewable fuel yearly by 2030, which could lead to a significant reduction in the carbon dioxide emissions in the Swedish transport sector. Vattenfall will supply climate-smart hydrogen gas for the fuel production.

Currently, Preem produces biofuel or biodiesel from tall oil, a by-product of the forestry industry.

It is also planning to produce renewable fuel from sawdust and forestry residues, including timber felling and lignin from the wood pulp industry.

Preem CEO and president Petter Holland said: "We need to use many different types of raw materials and produce several different types of fuels to replace fossil fuels with renewables.

“Many different solutions are also needed. Preem's contribution is to make fuels that are as green and efficient as possible. The collaboration is also a step in our vision to be to the fore in the transition towards a sustainable society.”

Vattenfall president and CEO Magnus Hall said: "This is a significant step for us and I am very positive about the potential of this collaboration. I see both business opportunities and climate benefits, where Vattenfall can contribute with climate-smart and competitive hydrogen gas.”

Vattenfall is a Swedish-state owned energy company that carries out operations in Sweden, Germany, the Netherlands, Denmark, UK and Finland, while Preem is the Swedish fuel firm that operates 570 fuel stations for private and commercial traffic.