Volvo Group and Westport sign LOI to establish joint venture to reduce CO2 emissions from long-haul transport
by CM staff
The joint venture is expected to launch in the first half of 2024.
Photo: CNW Group/Westport Fuel Systems Inc.
VANCOUVER — Volvo Group and Westport Fuel Systems Inc., a supplier of alternative fuel delivery systems and components for the global transportation industry, have signed a non-binding letter of intent to establish a joint venture to accelerate the commercialization and global adoption of Westport’s HPDI™ fuel system technology for long-haul and off-road applications.
Westport’s HPDI fuel system is a solution supporting carbon reductions in hard to abate sectors like heavy-duty and off-road mobility. HPDI enables the world’s trucking and off-road equipment manufacturers to address the challenges of meeting the regulatory requirements of Euro 7 and the US 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 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 per cent interest in the joint venture for the sum of approximately US$28 million plus up to an additional US$45 million depending on the performance of the joint venture.
Volvo’s ambition is to reach net-zero greenhouse gas emission-enabled products, solutions, and services by 2040. 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. 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,” said Lars Stenqvist, Chief Technology Officer of Volvo.
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.
