Södra, OX2 and TES have decided to move into the next phase of developing a potential facility for producing e-NG - a renewable gas that can replace fossil natural gas - in Värö. With support from The Industrial Leap, the parties are launching an in‑depth feasibility study to assess the project's technical, legal and commercial conditions.

Södra, OX2 and TES are now taking the next step in exploring the possibility of capturing biogenic CO₂ from Södra's pulp mill in Värö and converting it into renewable gas, known as e-NG. With support from the Industrial Leap, the parties are commencing a detailed feasibility study running until summer 2027. The study will generate the technical, legal and commercial documentation required ahead of a future decision on a FEED phase and a potential investment.

The feasibility study covers key issues such as land conditions, permitting processes, water supply, raw‑material flows, technical solutions, market dynamics, business model and access to renewable electricity. The work will show how a full‑scale facility could be integrated with Södra's Värö pulp mill, including the supply of biogenic CO₂ and energy collaboration.

The need for renewable energy carriers is rising rapidly as industry transitions and demand for alternatives to fossil natural gas grows. At the same time, raw materials are increasingly sought after, making it more important to use every part of the forest resource efficiently. By utilising the biogenic CO₂ currently released to the atmosphere, we can create additional value from an existing side stream and strengthen our competitiveness. The market for renewable gases such as e-NG is growing quickly in both Sweden and Europe, and Värö offers unique conditions - with stable CO₂ flows, access to renewable electricity and close proximity to the West Swedish gas grid. Altogether, this makes the site particularly well‑suited for testing a new value chain that strengthens energy security and makes more of every tree.

"For us, this project is about creating long‑term value throughout the value chain. By making use of the biogenic CO₂ already present in our processes, we can develop a business that enhances profitability while contributing to the industry's need for renewable energy solutions. At the same time, we increase the value of every tree and reduce dependence on fossil gas in Swedish and European industry. It's a step that combines business logic with resource efficiency - and that is exactly how we want to drive our development forward," says Johannes Bogren, Executive Vice President Södra Bioproducts

The project is based on a collaborative approach in which each party contributes a key part of the value chain. Södra supplies the biogenic CO₂ generated in the pulp mill's processes and the expertise required for industrial integration. OX2 develops the renewable electricity needed for hydrogen production. TES provides the technology and international experience of producing eNG and building the infrastructure required to deliver the renewable gas to the market. Together, the parties create a complete value chain - from raw material and energy to end product and distribution.

A future facility could produce around 1.2 TWh of e-NG per year, corresponding to approximately 15 percent of today's volumes in the West Swedish gas grid.

"The pilot trials we are conducting in Värö this spring for the capture of biogenic CO₂ show strong potential to turn flue gases into a raw material that creates value and new revenue in our operations. It is a good example of how we are working to make more of every tree while strengthening our competitiveness," says Jenny Gotthardsson, Mill Manager at Södra Cell Värö.

The project is funded through the Industrial Leap, which is part of the EU Recovery and Resilience Facility (RRF) and Next Generation EU. The Industrial Leap is a government initiative run by the Swedish Energy Agency.