Transforming VAROPreem’s refinery for a climate-neutral future

By 2035, VAROPreem aims to have a climate-neutral value chain in place and reduce its fossil emissions by 90% (compared to 2018 levels) – indeed a bold target for Sweden’s largest fuel producer. It is all about replacing fossil feedstocks with renewable ones. And therein lies the challenge.

Hydrogen is a key enabler

The demand for renewable fuel is increasing, but renewable feedstocks, such as pine oil and used cooking oil, contain more oxygen than fossil feedstocks (such as crude oil). To remove this oxygen, you add hydrogen (H2 at 99.99% purity), which binds it.

To this end, VAROPreem has revamped its hydrogen production unit (HPU). Upgrades include a new TPR reactor, an upgraded process gas boiler, an expanded pressure swing adsorption system as well as enhanced cooling capacity.

“Synsat modifications ensure a reliable, cost-efficient hydrogen supply by recovering and purifying hydrogen from existing refinery streams,” says Mats Wang-Hansen, Senior Market Director, Renewable Energy and Industry at COWI.

Reduced emissions 

The revamped Synsat facility was recommissioned in the summer of 2025, and the HPU was put into operation in October. The result: VAROPreem’s annual renewable production capacity increased by an impressive 900,000 m³.

End-user fossil emissions – the vehicles that fill up their tanks with VAROPreem’s fuels – account for 85% of the fossil emissions from the company’s value chain. These fossil emissions will be reduced by 2 million tonnes of CO₂ annually.

To put this in perspective, Sweden’s total emissions in 2024 amounted to 47.5 million tonnes of CO₂  equivalents, according to the Swedish Environmental Protection Agency. So, VAROPreem’s 2-million-tonne reduction translates into a 4.2% reduction in fossil fuel emissions nationwide. 

Delivering results

“This project not only advances VAROPreem’s climate goals but also demonstrates how strategic investments in renewable infrastructure and process optimisation deliver substantial environmental and economic returns,” says Mats Wang-Hansen. 

Selected through a competitive tender, COWI served as the EPCm contractor for the HPU revamp. For those wondering what hides behind that acronym, EPCm means that COWI has provided the following services:

 - design and engineering: multi-disciplinary detailed design, equipment specification, and safe, constructible plant layout 
 - procurement and quality: full procurement services, supplier coordination, and quality assurance to ensure timely, cost-efficient delivery 
 - construction and commissioning: oversight of all construction phases, HSE (health, safety and environmental) coordination, and commissioning support, ensuring a smooth handover and operational readiness. 
 

Facts

• The transformed Synsat plant enables up to 40% renewable feedstock in conventional diesel production.
• The upgrade replaces up to 950,000 m³ of crude oil each year.
• The project began in 2019 with an investment cost of around SEK 6 billion.
• One third of Sweden's total fossil emissions comes from domestic transport, of which road traffic accounts for 90%.