EU support for Volvo Group CarbonSmart initiative
Skövde engine plant awarded funding to advance net-zero innovation and clean technology
VOLVO Group’s truck engine manufacturing plant in Skövde, Sweden, has been awarded up to €49 million from the EU Innovation Fund to support the CarbonSmart Factory project: SPACE – an initiative that aims to advance Volvo’s transformation through net-zero innovation and clean technology.
The ambitious transformation project is aiming for significant reduction of CO2 emissions from manufacturing processes within the plant. With support from the EU, Skövde will become a pioneering example of decarbonized heavy manufacturing.
Rickard Lundberg, vice-president of powertrain production at the Skövde plant, said: ‘We will transition towards sustainable foundry operations by electrifying key processes and integrating AI technologies, reducing CO2 emissions by 88% from our manufacturing process. This project is a vital part of Volvo Group’s journey towards net-zero emissions.’
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 project will also introduce three innovative solutions for energy storage, allowing the plant to balance energy use and production.
Iron battery: Using existing furnaces to store energy for high-demand periods
Hydrogen battery: Using green hydrogen and adding the possibility to store energy seasonally
Water battery: Reusing hot water to reduce energy needs for heating and melting processes.
Together, these systems will allow the plant to balance energy use and production, improving operational flexibility while addressing the grid capacity limitations that many large-scale electrification projects face.
The Skövde plant has been conditionally granted up to €49 million by the European Union’s Innovation Fund. The project will be preceded by a pre-study conducted together with Skövde Energi and AI Sweden, funded by Advanced Digitalization through Vinnova.
