Denmark-based European Energy has partnered with Canadian ethanol producer Greenfield Global to develop an e-methanol production facility with an annual capacity of 48,000 tonnes in Québec, Canada, Engine reported.

The proposed plant will be established at Greenfield Global’s existing fuel ethanol distillery, where biogenic carbon dioxide (CO2) generated during the ethanol fermentation process will be captured and used as a feedstock.

The captured CO2 will be combined with green hydrogen produced using renewable electricity to manufacture up to 48,000 tonnes of e-methanol annually.

The companies are considering the shipping industry as one of the potential markets for the fuel, European Energy said. The Danish company already supplies e-methanol to the maritime sector from its Kasso facility in Denmark, with A.P. Moller-Maersk among its major offtakers.

Québec was chosen for the project due to its availability of low-cost, low-carbon hydropower and supportive policies for investments in low-carbon technologies. The existing infrastructure at Greenfield Global’s facility and its access to domestic and European markets also make the location suitable, European Energy said.

Knud Erik Andersen, Chief Executive Officer of European Energy, said the partnership with Greenfield Global offered an opportunity to develop a competitive e-methanol facility in Québec while creating a platform for the company’s future expansion across North America.

The companies have not announced a timeline for the project. They plan to initiate commercial discussions with prospective offtakers after completing preliminary engineering studies and starting construction of the grid connection.