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Volvo and Westport look to establish joint venture to reduce long-haul transport emissions

July 20, 2023
in Business
Volvo and Westport look to establish joint venture to reduce long-haul transport emissions
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Volvo Group and Westport Fuel Systems Inc. will establish a joint venture to accelerate the commercialization of Westport’s HPDI fuel system for long-haul and off-road applications. Volvo and Westport both want to create sustainable transport solutions to accelerate the decarbonization efforts of global trucking, engine, and equipment manufacturers for their customers and society.

Westport’s HPDI fuel system supports carbon reductions in hard-to-abate sectors like heavy-duty and off-road mobility. HPDI enables trucking and off-road equipment manufacturers to address the challenges of meeting the regulatory requirements of Euro 7 and the U.S. EPA while offering end users affordable options that are powered by carbon-neutral fuels like biogas, zero-carbon fuels like green hydrogen, and other renewable fuels. While Volvo will be a key customer of the joint venture, the joint venture’s mandate will be to enhance the commercialization of HPDI through the addition of new trucking and equipment manufacturers as customers.

Westport will contribute current HPDI assets and activities including related fixed assets, intellectual property, and business into the joint venture. Volvo will acquire a 45 percent interest in the joint venture for approximately U.S. $28 million (approximately SEK 300 million) plus up to an additional U.S. $45 million (approximately SEK 500 million) depending on the performance of the joint venture.

Volvo aims to reach net-zero greenhouse gas emission-enabled products, solutions, and services by 2040. Volvo believes that the future will demand diverse propulsion solutions for diverse applications to meet environmental demands. Volvo advocates for a three-pronged approach: battery-electric, fuel-cell electric, and internal combustion engines.

“Decarbonization with internal combustion engines running on renewable fuels, especially with HPDI, plays an important part in sustainable solutions,” said Lars Stenqvist, chief technology officer at Volvo. “HPDI has been on the road in Volvo trucks for over five years and is a proven technology that allows customers to significantly reduce CO2 emissions in LBG (Liquefied Biogas) applications here and now and is a potential avenue for hydrogen.”

“Westport is advancing fuel system solutions to help our customers affordably address the most pressing challenge of carbon reduction while continuing to utilize existing manufacturing infrastructure,” said David Johnson, chief executive officer at Westport.

Completion of the joint venture is conditional on the successful negotiations and execution of a definitive investment agreement, joint venture agreement, supply agreement, and development agreement. The joint venture is expected to launch in the first half of 2024.

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Copyright for syndicated content belongs to the linked Source : HeavyEquipmentGuide.ca – https://www.heavyequipmentguide.ca/article/40539/volvo-and-westport-look-to-establish-joint-venture-to-reduce-long-haul-transport-emissions

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