Volvo Group Skövde, has been awarded up to €49 million from the EU Innovation Fund to support the CarbonSmart Factory: SPACE project. This initiative aims to advance Volvo’s transformation through net-zero innovation and clean technology. The project pioneers a sustainable manufacturing transformation by integrating electrification, advanced industrial Artificial Intelligence and hydrogen technologies to achieve a substantial reduction in greenhouse gas emissions at the Skövde foundry.
One of the more energy-intensive parts of the automotive industry is the smelting and casting of iron and steel components. Volvo Group’s Skövde Plant, which manufactures engines and transmissions, accounts for around 10% of the company’s total operational greenhouse gas emissions, but thanks to the SPACE project that is set to change.
The aim of the EU-funded project is to shift from fossil-based furnace fuels to green electricity and hydrogen, reducing greenhouse gas emissions by around 88% in our manufacturing process. Central to this transformation is the integration of green technologies, including electric furnaces powered by green electricity, hydrogen replacing propane, as a fossil-free fuel alternative, advanced heat recovery systems to capture and reuse energy, cutting-edge AI-powered energy management to optimize energy use across operations
The Innovation Fund is the EU fund for climate policy, with a focus on energy and industry. It aims to bring to the market solutions to decarbonize European industry and support its transition to climate neutrality while fostering its competitiveness. The Innovation Fund is one of the world’s largest funding programs for the demonstration of innovative low-carbon technologies.
The Innovation Fund’s goals are to:
This is done by funding innovative projects focusing on:
The industrial program SPACE contains four sub projects. The overall target is to decrease the CO2 footprint by 40.000 ton annually.
Industrial AI
The goal of this sub-project is to develop an industrial AI platform that helps optimize energy use at the Skövde plant. By doing this, we can reduce our energy consumption and free up power on the grid for others to use. Instead of reserving energy in advance, we would plan our processes based on forecasts of energy availability, cost, and other factors. The AI platform could also be used at other Volvo sites and even by external companies.
FEMS (Future Electric Meltshop)
The cupola furnaces at the Skövde foundry run on fossil coke and account for over 10% of the Volvo Group total yearly CO2 emissions from production. By replacing them with electric induction furnaces powered by green electricity, we can nearly eliminate these emissions. In addition to the environmental benefits, the switch will also increase flexibility in the types of materials the foundry can produce.
Hydrogen and electricity replacing propane
Currently, propane is used to dry, heat, and sinter casting ladles. This setup will be replaced with electric heaters powered by green electricity for temperatures below 600 °C, and hydrogen for temperatures above 600 °C. As a result, CO2 emissions from this process will be close to zero. At the same time, the existing propane burners will be replaced with oxyfuel burners, reducing gas consumption by more than 50%.
Energy systems
By reusing heat from our own manufacturing processes, we can significantly reduce the amount of district heating we need to buy from external sources. An internal district heating system will be built to connect the different buildings at the Skövde plant, allowing heat and cooling to be shared where it's needed most.
The Science Based Targets initiative enables Volvo Group to set emission reduction targets in line with leading climate science. It provides target setting methods that reduce greenhouse gas emissions and transform business operations to fit the future low-carbon economy. These targets are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement – to limit global warming to well below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C.
As part of our commitment to Science Based targets, Volvo Group aims to significantly reduce our Scope 1 and 2 emissions. Scope 1 occurs directly from our operations, while Scope 2 emissions are indirect emissions, such as those from electricity generation for our operations, including emissions from production plants, engineering centers, offices, and dealerships.
Our target is to reduce these emissions by 50% by 2030 compared with 2019 levels. This reduction can be achieved through two main strategies: conserving energy by implementing energy-efficient technologies and reducing greenhouse gas intensity by increasing the share of renewable energy at our sites and by energy suppliers.
We transition towards sustainable foundry operations by electrifying key processes and integrating AI technologies, reducing CO₂ emissions by 88% from our foundry process. This project is a vital part of Volvo Group’s journey towards net-zero emissions.
