Volvo's carbon-free car factory

Volvo has announced that its manufacturing plant at Tuve in Sweden will use carbon-free energy from 2007. The company's facilities are responsible for 1% of Sweden's CO2 emissions.

The plant's electricity will be provided by five 2MW wind turbines - two of them on the Tuve site - which will be built and operated by local energy company Göteborg Energi at a cost of SKr110 million. Process heat will be provided by a SKr15 million 10MW biomass boiler, probably fuelled by wood pellets.

Volvo said that initially it will pay a higher price for energy under the 10-year contract, but "it's not hideously expensive". In the medium term the company expects that its energy costs will be below the market average, with other benefits arising from having "predictable" prices and guaranteed carbon-free generation.

Excess electricity will be exported to Göteborg Energi's network and excess heat from the boiler will feed a district heating system. Those exports are likely to grow: Tuve, like the rest of Volvo's plants, aims to reduce energy consumption by 20% over the next few years.

Sweden has a tradable certificate regime for renewable power generation similar to that in the UK. Göteborg Energi will benefit from sale of renewable energy certificates, and Volvo may also benefit under the EU emissions trading scheme.

Volvo said that its move would cover CO2 emissions from the site only, and not from business travel. Nor would it cover emissions from Volvo's products, where the company says it is "working intensely" to improve environmental performance.

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