ExxonMobil is buying a 49.9% stake in Biojet, a Norwegian biofuels company that plans to convert forestry and wood-based construction waste into biofuels and biofuel components, the company said in a Jan. 11 statement.
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"The agreement with Biojet AS advances ExxonMobil's efforts to provide lower-emissions products for the transportation sector," said Ian Carr, president of ExxonMobil Fuels and Lubricants Co. in the statement.
"Using our access at the Slagen terminal, we can efficiently distribute biofuels in Norway and to countries throughout northwest Europe," he added.
Biojet plans to develop up to five facilities to produce the biofuels and biofuel components. The company anticipates commercial production to begin in 2025 at a manufacturing plant to be built in Follum, Norway, the statement said.
Under the agreement, ExxonMobil will be able to purchase as much as 3 million barrels/year of biofuels that can be used for passenger vehicles and heavy trucks initially, with the possibility of expanding into marine and air transportation applications.
Biofuels and biofuel components produced by Biojet can meet the requirements for advanced fuels under Norwegian, EU and UK regulations, and biofuels produced from wood waste can help reduce life-cycle greenhouse gas emissions by 85%, the statement said.
Biofuel prices have been rising globally as demand continues to grow. Prices for Biodiesel FAME-10 barges in the Northwest Europe Amsterdam-Rotterdam-Antwerp hub averaged $2,331/mt in fourth-quarter 2021, up from the $1,700/mt in third-quarter 2021, according to S&P Global Platts assessments.
Capital focus on low-carbon fuels
The investment in Biojet builds on ExxonMobil's ongoing efforts to develop low-carbon fuel products. In 2021, the company established a Low Carbon Solutions business unit and under its purview, is currently evaluating biofuels, carbon capture and storage, and hydrogen projects around the world.
"We plan to invest $15 billion over the next six years on lower emission initiatives, reflecting the growing portfolio of attractive opportunities and the increased support we are seeing from private and public investment, partnership opportunities and policies," said Kathryn Mikells, ExxonMobil's CFO on the company's Dec. 1 capital spending call.
While ExxonMobil's initial focus is on CCS, hydrogen and biofuels, lower emissions capital spending also include repurposing existing refinery units, coprocessing biofeeds, and purchase agreements.
The Biojet purchase takes the company one step closer to its stated goal to produce 40,000 b/d of low emissions fuels by 2025, joining projects already underway.
In August 2021, ExxonMobil's Canadian affiliate, Imperial Oil, advanced plans to build a 20,000 b/d renewable diesel complex on the site of its existing 200,000 b/d Strathcona refinery in Edmonton, Alberta. The facility is expected to be online in 2024 and will use locally grown plant-based feedstock and hydrogen with CCS as part of the manufacturing process.
The project will use blue hydrogen produced by natural gas with CCS to further reduce its carbon intensity.
In April 2021, ExxonMobil signed a deal with Global Clean Energy to be the exclusive buyer of renewable diesel from the Bakersfield, California, refinery when it comes online in early 2022, purchasing up to 5 million barrels/year, doubling its initial offtake agreement.
The Bakersfield project will use a process developed to use camelina as a feedstock.