Biogas Behemoth

Sumitomo Corp. has established a joint venture, North Sky A/S, with Skovgaard Energy (SE), a company engaged in the development of renewable energy to produce biogas and Power to X such as e-sustainable aviation fuels (e-SAF). The new company aims to produce around 40 million Nm³ of biogas – equivalent to the annual gas consumption of about 20,000 Danish households. It will also expand SE’s existing biogas production sites across Denmark. Further, leveraging knowledge gained from the biogas business, the joint venture will develop other bioenergy sources, including e-SAF, a sustainable aviation fuel. This marks Sumitomo Corporation’s first participation in a biogas production business and will accelerate the growth of its energy solutions division, one of the key growth areas in its current Medium-Term Management Plan.

Since its founding in 1999, SE has developed renewable energy projects such as wind power. Today, it owns facilities for biogas production from cattle manure and land for developing Power to X business such as e-SAF. SE has also built strong partnerships with agricultural cooperative associations in Denmark and has signed a long-term raw materials supply agreement through 2032. This will ensure a stable supply of raw materials for biogas production.

By combining Sumitomo Corporation’s business network in Europe with SE, the new company aims to expand the biogas business and develop e-SAF production. As a synthetic fuel produced from biomass-derived carbon dioxide (CO₂) and green hydrogen, e-SAF is expected to see rising demand as it moves towards commercialization. Denmark generates around 90% of its domestic electricity from renewable sources, giving it an advantage in procuring green hydrogen. By expanding biogas operations across the country, the new company will be able to supply biomass-derived CO₂ – an ingredient in e-SAF – stably and at low cost from its own plants.

Denmark aims to make full use of organic waste generated through farming while achieving carbon neutrality. The country has set a target to power its national gas grid entirely with biogas by 2030. Biogas – produced from organic waste such as food residue and livestock manure – is attracting increasing attention as a renewable energy source. Because it does not emit CO₂ during combustion but instead returns only the CO₂ originally absorbed by its raw materials, it contributes to achieving carbon neutrality. In addition, by using domestically sourced raw materials, biogas enhances energy self-sufficiency and drives the development of new production facilities across the country.