VH Global Sustainable Energy Opportunities PLC (LSE:GSEO) has agreed a 15-year offtake deal to sell the food-grade carbon dioxide (CO2) gathered from its UK net-zero power plant to an industrial gas supplier.
At least 85% of the CO2 gas collected from the carbon capture process at the Nottinghamshire combined heat-and-power power plant will be supplied to the UK arm of Buse Gases, a German-owned group that is one of the leading suppliers in the industrial and speciality gas markets.
Food-grade CO2 has a 99.99% purity rating and can be used by the drinks industry to add bubbles to mineral water, soft drinks and alcoholic drinks, to dispense beer in pubs and in the packaging of fresh foods and meat.
The commercialization of food-grade CO2 from the carbon capture of a power plant under a long-term inflation-linked offtake agreement is thought to be a first-of-its-kind.
Food-grade CO2 is typically a byproduct of fertiliser or ammonia production in the UK, with production of food-grade CO2 from a flexible gas power plant thought to be unique in the UK.
Historically in the industry, CO2 offtake deals are signed for one to three years.
The UK is structurally short of supply of food-grade CO2, with fertilizer facilities in England being shut down to further increase the reliance on CO2 imports.
"The ability to secure such a long-term contract reflects the ability of [the trust's investment manager] Victory Hill, working together with Landmark Power, GSEO's operating partner in this asset, to leverage their industry knowledge," the trust said in a statement.
Revenue from the Buse agreement will be on top of the 15-year power purchase agreement already secured for the plant, lifting the expected annual total return for the project to 8%.
Victory Hill and Landmark Power were said to be exploring other opportunities to create additional value for the 10MW high-efficiency power plant, which uses natural gas as its feedstock but as the CO2 is captured it means it is a net zero asset.