Danish startup raises 10-million euros to scale up climate-neutral marine fuel

Danish biofuel startup Kvasir Technologies announced June 18 that it has raised 10-million euros (USD$11.46 million) in a Series A investment round with participation from European Energy as a new investor, alongside existing investors EIFO, Mærsk Growth and Footprint Fund.

The investment will accelerate the scale up and commercialization of Kvasir Technologies’ climate-neutral marine fuel.

At the same time, European Energy and Kvasir Technologies are entering into a strategic partnership by establishing the company KVEEN Biofuels, which is working towards the construction of a commercial-scale plant to produce biofuels using Kvasir Technologies’ patented technology.

“This investment round enables us to take the next crucial steps in developing and scaling our technology,” said Joachim Bachmann Nielsen, the CEO of Kvasir Technologies. “At the same time, it underlines that there is still strong support for solutions that can deliver real climate impact in the maritime sector.”

Kvasir Technologies, a spin-out from research at the Technical University of Denmark, has developed a new technology to convert a wide range of nonedible lignin-based residues from agriculture and forestry into refined biofuels for shipping.

The climate-neutral biofuel can serve as an immediate replacement for fossil marine fuel without the need to modify ship engines or change existing infrastructure.

This is a key point in a capex-intensive sector with long-lived assets.

“What will be decisive for Kvasir’s technology is that, through innovation and scaling, we achieve attractive price points for customers and thereby secure long-term offtake agreements before construction begins,” said Knud Erik Andersen, CEO of European Energy. “We have some experience with that process and look forward to the collaboration.”

The new funding will be used, among other things, to scale the technology at Kvasir Technologies’ test facility in Fredericia, Denmark, which can produce up to 2 metric tons of biofuel per day.

At the same time, development work will begin on the first commercial plant in the city of Aabenraa in the southern part of Jutland, which will demonstrate the technology on an industrial scale.

“With European Energy, we gain a partner with proven experience in developing and financing energy infrastructure at scale,” said Ulrik Falkenberg Lending, the chief commercial officer of Kvasir Technologies. “This reduces the risk of our first commercial plant and accelerates our route to market.”

The investment comes at a time when several climate startups are facing difficulties raising capital.

Due to the maturity of its technology, attractive commercial prospects and a clear path to commercialization, Sara Sande, partner and head of thematic venture investments at EIFO said Kvasir Technologies has nevertheless managed to attract a strong investor syndicate.

“Kvasir Technologies represents a technological solution with strong potential to reduce CO2 emissions in one of the hardest sectors to decarbonize,” Sande added. “The combination of scalable technology, a biofuel that can be used in existing fleets and strong partnerships makes the case particularly attractive.”