Skogn LBG Plant: Pioneering Biogas Power in Norway

Climate-conscious craftwork

At 130km long, the Trondheimsfjord is Norway’s third-longest fjord. An important waterway since the Viking age, the fjord’s icy blue waters are surrounded by rare wildlife, rolling green hills, and small settlements humming with activity. On the inlet’s eastern shore sits the village of Skogn, which in 2018 became home to the world’s largest liquid biogas fuel (LBG) facility.

With an optimum run-rate output of 250 gigawatt hours per annum, and capable of producing up to 25 million normal cubic meters of fuel a year, the Skogn plant is one of the most advanced in existence. Primarily involved in the transformation of raw materials, such as fish waste and industry by-products, into fuel for buses, heavy transport, vans, ferries, and rail transport, the Skogn

Photo: Kenneth Kvande
Photo: Kenneth Kvande

facility is proudly operated by Biokraft – one of the world’s leading producers of LBG. Håvard Wollan, Biokraft’s CEO, explains how the pioneering production facility came to be:

“With the Skogn LBG plant, Biokraft took a first mover position, betting on the advancement of the LNG/LBG fuel market in Europe,” he says. “In retrospect, the LBG fuel market for heavy road transportation has developed more rapidly than we originally thought and we are seeing very promising development in the shipping segment as well.

“All LBG produced at Skogn is from waste, and we also produce renewable industry chemicals and renewable bio fertilizer. The farmers in Mid-Norway are, so far, very pleased with our product, citing that Biokraft’s bio fertilizer is both good agronomy and good economy for them. Additionally, it helps to reduce the carbon footprint of food production, which is gaining more importance in the Norwegian agricultural sector every year.”

Founded in 2009 by a consortium of experienced entrepreneurs, Biokraft was established with the ambition to build a new, modern, industrial venture producing biofuels. The company’s first factory was built in 2011 at Selva in Mid-Norway and was designed to produce bio-oil. After selling the Selva facility in 2013, Biokraft has since focused on LBG production. The construction of the plant at Skogn marked a major milestone in this journey and since its commission, the facility’s output has not disappointed.

“The first LBG produced at the Skogn factory arrived in September 2018,” Håvard reports. “Since then, throughout 2019 and 2020, Biokraft has delivered positive EBITDA every month. Driven by what the Skogn facility is offering us, we ended the first quarter of 2020 with a record high EBITDA and profit before tax.”

As one might expect, a project as complex and sizable as construction of the world’s largest biogas plant required support from a strong network of vendors, contractors, and partners. Fortunately for Biokraft, the firm could rely on its strong relationship with Wärtsilä, a smart technologies and lifecycle solutions company renowned for its work in energy markets.

“Wärtsilä delivered the processes for both upgrading and liquefying the biogas at our Skogn factory,” Håvard reveals. “If these processes do not work properly, we will not have any LBG to sell and deliver to our customers, so it’s been great to work with a company we know we can rely on.”

Thanks to the support of companies like Wärtsilä, and the subsequent success of the Skogn facility, Biokraft has been able to secure contracts with companies like Hurtigruten.

The business partnered with the Norweigan cruise line in 2019 as part of a record-breaking multi-year deal in which Biokraft agreed to supply the firm with climate-neutral LBG to power its ships. The fuel will be created using organic waste.

“For Hurtigruten, it means they can provide state-of-the-art cruise operations with a significantly lower carbon footprint. For Biokraft and the whole industry, this deal and market move shows that LNG/LBG is a low-carbon footprint solution that delivers,” Håvard asserts. “As a whole, the sector is searching for the best way to make the transition to greener shipping. We believe LNG/LBG is the way to go, and that it will remain the way to go for many, many years.

“We are still a relatively small company, but in spite of our size, I would say that we probably invest as much time and money in research and development as anybody else,” he adds. “Making money from ongoing operations has the highest priority, but we are always investing in strengthening our long-term competitive advantage through focused innovation. One of the explorative projects we are currently involved in is looking at how to improve the business from our own residual flows, after LBG production, as well as how to produce LBG in new and novel ways with both respect to unusual feedstocks and unique production processes.”

As a business so committed to progress and creating a better tomorrow, Biokraft is pleased to work with a product in LBG that is inherently positive for the environment. In 2018, the company received Levanger SV’s Environmental Award and more recently, Biokraft’s sustainability efforts were supported by comments from the Zero Emission Resource Organization, which stated that biogas is a ‘doubly climate neutral’ substance.

Photo: Kenneth Kvande
Photo: Kenneth Kvande

“When you add up the greenhouse gas emission reductions from producing biogas from waste, applying LBG as fuel, and replacing conventional fertilizer with bio fertilizer, you get more than 100 per cent,” Håvard states. “LBG fuel is a renewable fuel, but it also helps to retract CO2 from our atmosphere. As such, I have no doubt that biogas is one of the most important climate risk mitigation strategies of our time.

“At Biokraft, we believe that sustainability will be an increasingly important competitive advantage in the Norwegian industry. We want to be a service partner that significantly contributes to the sustainability of our clients, be it by utilizing waste and by-products in an optimal way, by providing renewable climate-friendly fertilizers in agriculture, or by replacing fossil fuels in transport. We have ambitions to utilize Norwegian raw materials and work towards using both forest waste and marine energy crops for biogas fuel. Pilot trials over the years have tested the biological process and our process plant is manned by experienced players with vital oil and gas sector knowledge, which will, no doubt, prove highly beneficial going forwards.”

Though the Covid-19 pandemic may have caused a downturn across many areas of the oil and gas industry, Biokraft is determined to build upon its successes, and as such, the firm is already preparing for the commencement of its next major infrastructure development – Skogn II.

“Our existing plant’s new sister site – Skogn II – will be a large-scale industrial LBG factory,” Håvard comments. “We are currently readying ourselves for construction to begin and are pleased to announce that we will be supported by Andion throughout. An industry leader in biogas production and wastewater treatment, Andion will be one of the key contractors in the Skogn II construction project. We have been impressed with the leadership and competence of the group and have the highest expectations going forward. It is a partnership with a lot of promise.”

Supported by an experienced team within the organization, Håvard is proud of the way Biokraft has negotiated both the construction and operational phases of the company’s growth, but the CEO does not plan on slowing down any time soon. By no means willing to rest on his laurels, Håvard is keen to drive the company forward, spurred on by a mission to prove that Biokraft is one of the leading companies in the international biogas industry.

“It has been a privilege to experience the rapid development of this industry over the last decade,” he declares. “During the most recent years, we have seen new and substantial interest from biogas-focused private equity firms and institutional investors. My own belief is that the green transition will only take place when the financial sector comes fully on board. What we are seeing now, including the strong interest in high-ESG-scoring companies in the stock markets, is very promising. We believe that rapidly increasing demand in LBG fuels for heavy road transport and green shipping will continue to drive our growth.”

Biokraft AS
Products: Liquid biogas fuels