Dutch developer announces plan for EUR 1 bln green methanol project in Estonia

TALLINN - Power2X, a project developer based in the Netherlands, is in the planning phase of a green methanol project which would see an investment of more than one billion euros in Estonia.

The envisioned facility, situated in the industrial area of Niidu in Parnu, aims to produce up to 500,000 tons  of green methanol per year once fully developed. The production will be based on locally sourced sustainable forestry outputs and flexible green hydrogen, powered by Estonia's emerging offshore wind developments, the project developer specializing in the energy transition said in a press release on Wednesday.

This strategic investment aims to support the creation of a flexible hydrogen economy that can absorb the intermittency of offshore wind power production, that will empower offshore wind expansion and enhance regional energy security. The produced green methanol could decarbonize chemical materials production, aviation fuels, Estonian ferry lines and shipping and other hard to decarbonize industries, domestically or abroad with the potential to save one million tons of carbon dioxide per year.

The project intends to use world scale advanced gasification and methanol synthesis technology, and has ensuring safety and reliability as core values. As a primary input, the facility will take sustainably harvested biomass and residual forestry streams from Estonia, aligning with Power2X's strong commitment to sustainability and decarbonization of the energy and materials industries. A significant portion of this biomass is currently exported as pulp logs, pellets and wood chips with limited economic value-add in Estonia.

During development, construction and long term operations, the project is expected to contribute to a significant GDP increase for Estonia, creating more than 2,000 jobs during construction and over 200 long term stable supply chain and operations jobs locally.

The project, now in the feasibility stage and progressing through permitting, is seeking to secure sufficient biomass volumes. With operations targeted to commence in 2028, the project could assume a pivotal role in the European transition towards more sustainable feedstocks and energy sources for the chemicals sector and to decarbonize aviation and shipping. Power2X acknowledges the crucial role these industries play in the energy transition for Estonia as well as the EU and aims to significantly contribute to their decarbonization.

Peter Daemen, project executive at Power2X, described the project as a unique opportunity to establish a leading green methanol facility in Europe and to propel Parnu and Estonia into a hub for sustainable industries, contributing significantly to the national energy transition.

Parnu Mayor Romek Kosenkranius said that due to the potential of offshore wind farms and biomass recovery, completely new development opportunities have opened up for the city of Parnu in the field of green energy.

"According to the plan offered by Power2X, future new logistics opportunities in Parnu County, including the Rail Baltic freight station, will be combined with our traditions in optimizing the industry. Modern green fuel production has several positive effects on the economic development of the region and the whole of Estonia and confirms the importance of larger volumes of renewable electricity," the mayor said.

Power2X develops large-scale decarbonization projects, focusing on clean hydrogen, ammonia, and methanol, with a diverse portfolio of projects across Europe, including MadoquaPower2X, a circa 500 megawatt green ammonia production facility in Portugal, and ErasmoPower2X, a gigawatt-scale solar power generation and green hydrogen production project in Spain. Headquartered in Amsterdam, Power2X has a team of approximately 70 professionals and is financially backed by CPP Investments, the global investment management organization that invests the Canada Pension Plan (CPP).