Baltics’ first biomethane plant to be built in Kunda for €3.5 million
Greengas Energy OÜ, a locally owned company, and aspen pulp producer Estonian Cell AS have signed a long-term purchase and sale agreement whereby the Baltic States’ first biomethane production plant will be set up in Kunda, on Estonia’s northern coast, for an investment of approximately 3.5 million euros.
Greengas Energy is planning to produce 6-7 million cubic meters of biomethane per year, which, according to the company, is comparable with the amount used annually by city buses operating in Narva, Tartu and Pärnu.
"Financed by Greengas Energy OÜ, construction of the biomethane production plant will begin this year, and the first output will be released into the gas network in 2017," Greengas Energy board member Marko Tiiman said.
Tiiman described the unit's planned annual output capacity as remarkable on the EU scale as well, and said that the investment will help Estonia meet its renewable energy goals in the transport sector as well.
Biomethane will be produced at the new facility from biogas supplied by Estonian Cell, the latter of which has already produced more than three million cubic meters of biomethane in the first five months of 2016.
“So far, we have used biogas we have produced in our own production process,” explained Siiri Lahe, a board member at Estonian Cell. “During breaks we have let some of the valuable biogas just burn in the air. The biomethane production plant will allow all of the biogas we produce to be utilized.”
“We hope that potential consumers will be encouraged by this to switch to biomethane and to apply for support from open support measures in collaboration with the Environmental Investment Center,” said Ando Leppiman, deputy secretary general for
"We hope that potential consumers will be encouraged by this to switch to biomethane and to apply for support from open support measures in collaboration with the Environmental Investment Center," said Ministry of Economic Affairs and Communications’ Deputy Secretary General for Energy and Construction Ando Leppiman.
Greengas Energy was advised in the transaction by Law Firm GLIMSTEDT, which is also helping to draft the legislation necessary for the development of the biomethane production project. Raidla Ellex served as legal advisor to Estonian Cell.
Greengas Energy is a biofuel production company established in 2015, which has been developed jointly by Glimstedt Energia OÜ and Greengas OÜ.
Estonian Cell’s aspen pulp mill in Kunda, Lääne-Viru County, went into operation in 2006, with sales in 2015 totaling 78 million euros. The firm began producing biogas in 2014, and is currently the biggest producer of biogas in Estonia, producing approximately 50 gigawatt-hours’ worth per year.