The City of Oulu and French company Verso Energy have signed a co-operation agreement aiming to build a hydrogen processing plant in Oulu. Verso Energy intends to construct a plant with a yearly production capacity of 80 000 tonnes of e-SAF. The estimated value of the project is €1.4 billion, and it is expected to create 250 jobs.
Signing the co-operation agreement strengthens the City of Oulu’s status as a key hydrogen hub in the Nordics. Verso Energy’s hydrogen refining plant in the port area of Oulu will be the largest of its kind in Finland so far. The cooperation agreement is valid until the end of 2026.
Antoine Huard, CEO of Verso Energy, stated at the yearly Northern Power event in Oulu that the biggest city within the Arctic region indeed has everything it takes to produce emission-free aviation fuel in an environmentally friendly way.
– Finland is a very attractive country for e-SAF production, and the Oulu site has all the qualities to be a very competitive site at the European level. We are very honoured by the confidence that the elected representatives of Oulu have placed in us, Huard says.
– The excellence of the cooperative work with both the City of Oulu and the Port of Oulu was decisive for the development of this project, which will allow Finland to demonstrate the potential to reconcile job creation, industrial growth and sustainable development, Huard adds.
Verso Energy has several hydrogen and synthetic fuel plants in pipeline in France, but the plant being planned for Oulu, Finland, is among the company’s first projects abroad. Verso Energy’s production of synthetic fuels is based on the production of renewable hydrogen on site and biogenic carbon dioxide captured from paper and pulp mills near the site. Verso Energy offers synthetic fuels for both aircraft and ships.
Starting this year, fuel used at the EU’s largest airports must include a 2% blend of sustainable aviation fuel (SAF). Currently, there are no SAF production plants in Finland.
Co-operation agreement prepares for final investment decision
The signing of the co-operation agreement means that the City of Oulu will proceed with the zoning of the Port of Oulu green transition industrial area, and the requirements and objectives of Verso Energy and the City of Oulu will be accommodated in co-operation.
Verso Energy is responsible for the surveys, plans and permits concerning its future site. The agreement enables Verso Energy to commence the planning of plot use, to initiate environmental impact assessment and to begin applying for permits required by their operations. Application for the building permit can also be prepared alongside the zoning process.
Marko Kilpeläinen, Director of Urban Environment Services for the City of Oulu, highlights fluent co-operation as Finland’s strength in attracting the green transition investments.
– In Finland, the zoning process can run parallel to a company’s project planning, offering more flexibility compared to some other countries. The scale of investments required for the green transition industrial projects is so substantial that this kind of phased commitment helps projects move toward the final investment decision more smoothly, Kilpeläinen says.
In addition to the city’s zoning and building control authorities, BusinessOulu, Port of Oulu and the local energy and water companies Oulun Energia and Oulu Waterworks are involved in the planning process. Co-operation with the relevant government authorities is also carried out early on.
Threshold investments to be agreed in more detail
The co-operation agreement remains in effect until the end of 2026. During this period, both parties are committed to advancing the project toward the next phase – the implementation agreement. The implementation agreement will outline key aspects such as threshold investments and the division of responsibilities.
– I am glad that Verso Energy’s project has progressed so smoothly so far. This also indicates that our city has a valuable role to play in the green transition. As a city, we create the conditions for companies to invest here. I want to thank the city’s experts for their efforts so far and Business Finland for facilitating the initial contact with Verso Energy, says Ari Alatossava, Mayor of Oulu.
– As the plans for Verso Energy’s project and zoning of the area progress, we will define in more detail how the costs of earthworks and electrification of the area will be shared between the city and the company. However, the overall framework for cooperation for the next two years is clear under this agreement, Alatossava continues.
The co-operation agreement between Verso Energy and the City of Oulu was sealed at the annual Northern Power business forum, which gathered 450 hydrogen industry professionals in Oulu. At the event, Verso Energy and the Port of Oulu also signed their own co-operation agreement.
Media contacts for further inquiries:
VERSO ENERGY: Mrs. Stéphanie Lefebvre-Oustry, slefebvre@aromates.fr, +33 6 11 47 48 83
City of Oulu: Mr. Marko Kilpeläinen, Director of Urban Environment Services, marko.kilpelainen@ouka.fi, +358 40 5133650
BusinessOulu: Mr. Janne Hietaniemi, Key Account Director, janne.hietaniemi@businessoulu.com, +358 40 649 1211
Project background and additional information
2023:
City of Oulu initiates the zoning for the Port of Oulu green transition industrial area. The aim of the zoning is to update the local detailed plan of the port area to align with the future operations of the Port of Oulu and to designate industrial plots and infrastructure connections to facilitate green transition industrial projects in connection with the port.
2024:
On 14 February, the City of Oulu announces an application procedure at the Northern Power event to find the most suitable green transition operator for the Port of Oulu. Business Finland facilitates the initial contact with Verso Energy.
2 May – 3 July: registration procedure open. 10 operators submit applications within the deadline.
09/2024: The City makes a criteria-based decision based on a report by the consulting company AFRY and further interviews with the applicants. The evaluation criteria emphasises the feasibility of the operator’s plans in the area, suitability for the area near the Port of Oulu, support for the strategic objectives of the City of Oulu, and sustainability.
26 November: Verso Energy is planning a hydrogen plant in Oulu | City of Oulu
The progress of the zoning process and related agreements in the City of Oulu
Reservation of area for planning at the beginning of the cooperation: the Urban Environment Committee of the city considers the applicant to be suitable partner whose activities the city aims to enable in the area. An area is specified and provisionally reserved for the applicant’s plans.
Cooperation agreement at the beginning of zoning: agreeing on matters during zoning phase and confirming the area reservation.
Implementation agreement, before the plan is approved: agreeing and committing on matters and implementation costs after the local detailed plan enters into force.
Land lease agreement before the building permit is granted, transfer of land tenure and related rights and responsibilities after the entry into force of the land use plan.
VERSO ENERGY is a carbon-free energy company specializing in the development of projects designed to make possible a decarbonized and competitive energy mix with a high proportion of renewable energies. Co-founded by Xavier Caïtucoli and Antoine Huard, VERSO ENERGY is a new player in the energy transition specializing in the development, financing and operation of carbon-free energy production assets.
What is SAF?
Synthetic aviation fuel is made from renewable hydrogen and carbon dioxide, which can be captured from industrial emissions or the air. Hydrogen is produced through electrolysis using renewable energy sources. The fuel is created by combining hydrogen with carbon, providing a sustainable alternative to fossil-based jet fuel.
The ReFuelEU Aviation Regulation has set a minimum supply mandate for Sustainable Aviation Fuels (SAF) in Europe, starting with 2% in 2025 and increasing to 70% in 2050.
Net zero 2050: sustainable aviation fuels
The International Air Transport Association (IATA) estimates that by 2025 SAF production is expected to reach 2.1 million tons (2.7 billion litres), representing 0.7% of global jet fuel production and 13% of total renewable fuel capacity.
More than 40 industrial projects have been published in Europe, especially in Norway, Sweden, France and Germany, exploring the start of synthetic aviation fuel production.