In a bid to combat CO2 emissions in long-haul transport, Volvo Group has inked a deal with Westport Fuel Systems Inc. The agreement, stemming from a previously announced Letter of Intent, paves the way for a joint venture aimed at expediting the commercialization and global adoption of Westport’s High Pressure Direct Injection (HPDI™) fuel system technology for long-haul and off-road applications.
The finalization of the joint venture hinges on specific conditions, including regulatory and government approvals. It’s slated to kick off post the formal closing, expected in the second quarter of 2024.
HPDI technology offers a promising solution to cut down greenhouse gas emissions by replacing traditional fuels like diesel with carbon-neutral or zero-carbon alternatives such as biogas or hydrogen.
Lars Stenqvist, Volvo Group’s Chief Technology Officer, highlighted the significance of decarbonization through internal combustion engines running on renewable fuels. He emphasized that HPDI, a technology already integrated into Volvo trucks for over five years, presents a viable means for customers to substantially reduce CO2 emissions, particularly in Liquified Biogas (LBG) applications.
Under the terms of the agreement, Westport will contribute specific HPDI assets and opportunities, including related fixed assets, intellectual property, and business, to the joint venture. Volvo Group, on the other hand, will secure a 45% stake in the venture, with an initial investment of around US$28 million, payable upon closing, and an additional potential investment of up to US$45 million contingent on the venture’s performance.
