Technology firm Liquid Wind has won a €3.6 million ($4.19 million) grant from Swedish agency Industriklivet to support pre-engineering work for its planned e-methanol plant in Ornskoldsvik.

The facility will produce about 100,000 mt/year of e-methanol by combining green hydrogen with captured biogenic CO2 from a nearby biofuel-powered CHP plant, the company said in a statement on its website on Monday.

The e-methanol produced will be catered to demand from various sectors, including shipping.

Unlike grey methanol, which is derived from natural gas steam reforming, e-methanol is a cleaner alternative with lower carbon emissions.

Dual-fuel methanol ships can use e-methanol without requiring major modification.

“We are pleased to receive the Industriklivet support for our project in Örnsköldsvik,” Claes Fredriksson, founder of Liquid Wind, said.

“It represents a strong commitment from the Swedish government that not only accelerates the transition to fossil-free eFuel production in Sweden but also sends a powerful signal to international investors and offtakers.”

In February, Liquid Wind announced plans to develop the Swedish plant in collaboration with power utility firm Övik Energi.