Volvo Group Receives EU Innovation Support for CarbonSmart Initiative

Rhea-AI Summary

Volvo Group (OTC:VLVLY) has secured up to €49 million in EU Innovation Fund support for its CarbonSmart Factory project at the Skövde engine plant in Sweden. The initiative aims to transform manufacturing operations through innovative clean technology implementation, targeting an 88% reduction in CO₂ emissions.

The project introduces advanced green technologies including electric furnaces powered by green electricity, hydrogen fuel systems, and AI-powered energy management. Three innovative energy storage solutions - Iron Battery, Hydrogen Battery, and Water Battery - will be implemented to optimize energy usage and address grid capacity challenges.

Positive

• Secured €49 million in EU Innovation Fund support for sustainability initiatives
• Project targets 88% reduction in CO₂ emissions from manufacturing processes
• Implementation of three innovative energy storage solutions to improve operational efficiency
• Integration of advanced green technologies including AI-powered energy management

Negative

• Significant capital investment required for plant transformation
• Project implementation may face grid capacity limitations
• Dependency on successful integration of multiple new technologies

GOTHENBURG, Sweden, June 24, 2025 /PRNewswire/ -- Volvo Group's engine plant in Skövde, Sweden, has been awarded up to €49 million from the EU Innovation Fund to support the CarbonSmart Factory project: SPACE. This initiative aims to advance Volvo's transformation through net-zero innovation and clean technology.

"We 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." says Rickard Lundberg, Vice President Powertrain Production Skövde Plant.

The initiative is an ambitious transformation project aiming for significant reduction of CO₂ emissions from manufacturing processes within Skövde Plant. With support from the EU, the plant will become a pioneering example of decarbonized heavy manufacturing.

Driving Industry Leadership in Sustainability

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.

1. Iron Battery: Uses existing furnaces to store energy for high-demand times.
2. Hydrogen Battery: Uses green hydrogen, adding possibilities to store energy seasonally.
3. Water Battery: Reuses 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 grid capacity limitations that many large-scale electrification projects face.

The Skövde plant is conditionally granted up to €49M by Innovation Fund, European Commission. The project is preceded by a prestudy conducted together with Skövde Energi and AI Sweden, funded by Advanced Digitalization through Vinnova.

June 24, 2025

For more information, contact:

Rickard Lundberg
VP Powertrain Production Skövde Plant 
rickard.lundberg@volvo.com
+46 790 62 43 78

Maria Hillerström
Manager Communication Strategy Skövde Plant
maria.hillerstrom@volvo.com
+46 735 58 84 97

Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Climate, Infrastructure and Environment Executive Agency (CINEA). Neither the European Union nor the granting authority can be held responsible for them.

Funded by the European Union
Emission Trading System
Innovation Fund

For more information, please visit volvogroup.com 
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The Volvo Group drives prosperity through transport and infrastructure solutions, offering trucks, buses, construction equipment, power solutions for marine and industrial applications, financing and services that increase our customers' uptime and productivity. Founded in 1927, the Volvo Group is committed to shaping the future landscape of sustainable transport and infrastructure solutions. The Volvo Group is headquartered in Gothenburg, Sweden, employs more than 100,000 people and serves customers in almost 190 markets. In 2024, net sales amounted to SEK 527 billion (EUR 46 billion). Volvo shares are listed on Nasdaq Stockholm.

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/ab-volvo/r/volvo-group-receives-eu-innovation-support-for-carbonsmart-initiative,c4167818

The following files are available for download:

https://mb.cision.com/Main/39/4167818/3519497.pdf	Press Release - Volvo Group Receives EU Innovation Support for CarbonSmart Initiative
https://news.cision.com/ab-volvo/i/skovde-plant-1860x1050,c3421066	Skövde plant 1860x1050

 

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SOURCE AB Volvo

FAQ

How much EU funding did Volvo Group (VLVLY) receive for the CarbonSmart initiative?

Volvo Group has been conditionally granted up to €49 million from the EU Innovation Fund to support the CarbonSmart Factory project at its Skövde plant.

What is the expected CO2 emission reduction from Volvo's CarbonSmart project?

The project aims to reduce CO₂ emissions by 88% from the manufacturing process at the Skövde plant through electrification and AI technologies.

What energy storage solutions will Volvo implement in the Skövde plant?

Volvo will implement three innovative solutions: Iron Battery using existing furnaces, Hydrogen Battery for seasonal energy storage, and Water Battery for reusing hot water in heating processes.

How will Volvo's CarbonSmart project transform its manufacturing process?

The project will integrate electric furnaces powered by green electricity, replace propane with hydrogen fuel, implement advanced heat recovery systems, and utilize AI-powered energy management for optimization.

When did Volvo Group announce the EU Innovation Fund support?

Volvo Group announced receiving the EU Innovation Fund support on June 24, 2025.