Renewable energy firm OX2, forestry association Södra, and project developer TES have entered the pre-front-end engineering (pre-FEED) phase for the project.

One operational, the plant aims to produce around 86,000 tonnes of e-NG per annum by combining hydrogen produced onsite using renewable electricity with biogenic carbon dioxide (CO2) captured from Södra’s pulp mill at Värö.

The project has secured SEK 16.8 million (€1.6m) in funding from Sweden’s Energy Agency and aims to be operational by the early 2030s.

An offtake agreement with an unnamed energy major covering most of the facility’s production capacity has already been signed, according to the group.

Emelie Zakrisson, Country Manager at OX2 Sweden, said the project could deliver large-scale e-NG for distribution through existing infrastructure.

“Combining Sweden’s natural resources with industrial know‑how gives this project the potential to support the industry’s transition, cut emissions and move Sweden closer to real energy self-sufficiency,” she said.

While often criticised for its potential high costs due to the use of green hydrogen and captured CO2, e-NG as a carbon-neutral drop-in gas has been gaining traction.