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Sysav's carbon capture project faces funding hurdles despite municipal support

EnvironmentEnvironment
Sysav's carbon capture project faces funding hurdles despite municipal support
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  • Sysav's carbon capture project costs 3.7 billion kronor and aims to capture 400,000 tons of CO2 annually.
  • Municipal support includes a loan from Malmö, but only 4 of 14 owner municipalities have agreed to financial guarantees.
  • The project targets operation by 2030, with financing relying on EU and state loans, and faces risks despite profitability arguments.

The company has asked its owner municipalities for financial guarantees, such as loans or surety bonds, to strengthen its chances in this year's EU application, after failing to receive EU money in its two most recent applications. The Malmö city council has decided to provide a loan of nearly 1.2 billion kronor, and in 2024, all owner municipalities except Kävlinge supported the investment, though no monetary demands were made at that time. According to major media reports, when Sysav requested financial guarantees, only 4 out of 14 municipalities said yes, with Lund municipality, like Malmö, citing climate importance but choosing not to promise money currently, instead remaining positive pending better commercial viability investigations and owner dialogue. In Malmö's city council, the Sweden Democrats voted alone against the loan.

The project hopes to be operational by 2030, with Sysav planning to make the final investment decision during 2027. The technology is described by Sysav as an established technical solution with clear climate benefits, and the captured carbon dioxide would be converted into liquid and stored underground, though a final storage site has not been chosen. According to major media reports, the capture corresponds to up to 95 percent of the carbon dioxide emissions from the incineration lines the facility will connect to.

Financing for the billions is intended to come mainly from loans and support from the EU and the Swedish state, with at most 5 percent funded by Sysav's own funds. Sysav believes building the facility will be more profitable than not, as the company expects emission allowance prices to rise sharply over the next 10–15 years, aiming to avoid those costs and earn money by selling negative emission certificates. However, the project is considered a risk due to technology and financing, and good environmental intentions do not guarantee a sound business idea.

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Sysav's carbon capture project faces funding hurdles despite municipal support | Reed News