Industrial energy users across Europe are accelerating efforts to reduce carbon emissions while maintaining reliable operations. In this context, HoSt Group has commenced construction of a 25 MW wood waste-fired combined heat and power (CHP) facility in the Osnabrück region of Lower Saxony. The project marks a significant milestone in the industrial energy transition and highlights the growing role of biomass-based energy systems in replacing coal-fired infrastructure.
The new facility is being developed to replace a former industrial coal plant previously used by the customer. Commercial operations are expected to begin by mid-2027. Once completed, the plant will deliver sustainable heat and electricity for industrial processes while reducing dependence on fossil fuels.
The project has been structured under an Energy-as-a-Service model. Under this arrangement, HoSt Group will finance, construct, own and operate the renewable energy installation. The industrial customer will only purchase the generated energy and will not be required to invest in the infrastructure itself.
This approach is gaining traction in energy-intensive sectors. Many manufacturers are seeking low-risk pathways to decarbonise operations without diverting capital from their core business activities. The model also allows industrial users to secure stable energy pricing during a period of fluctuating fossil fuel costs and rising carbon prices under the European Emissions Trading System.
The total investment value of the project is estimated at approximately €35 million. Financing has been provided by Rabobank. HoSt Group will remain responsible for permitting, plant management and daily operations for a minimum period of 12 years.
The CHP plant has been engineered specifically for high-demand industrial applications. It is designed to supply up to 30 tonnes of high-temperature process steam per hour. In addition, the site will generate 2 MW of electrical power for industrial use.
Locally sourced waste wood will be utilised as the primary fuel. This supports a circular energy model while reducing reliance on imported fossil fuels. The fuel strategy also aligns with strict European Union emissions regulations and Renewable Energy Directive certification requirements.
Industrial sectors requiring continuous steam generation are increasingly examining biomass solutions. Reliable steam production remains essential for industries such as chemicals, food processing, paper manufacturing and heavy industrial operations. Stable thermal output is therefore considered critical for operational continuity.
According to HoSt Group, the transition from coal and natural gas to renewable residual streams will significantly lower emissions. Approximately 65,000 tonnes of carbon dioxide emissions are expected to be eliminated annually compared with the previous fossil-based energy system.
The project demonstrates how industrial decarbonisation can be combined with economic competitiveness. Energy price volatility has placed pressure on industrial operators across Europe in recent years. At the same time, carbon pricing mechanisms continue to increase operating costs for fossil fuel-based facilities.
Biomass CHP systems are therefore being viewed as an alternative for long-term energy stability. Industrial operators can benefit from predictable pricing structures and reduced exposure to fossil fuel market fluctuations. Lower emissions also support compliance with corporate sustainability targets and tightening environmental regulations.
Tjeerd Smit, Executive Director at HoSt Group, stated that industries require dependable infrastructure to support a seamless transition towards carbon neutrality. He noted that renewable residual streams can effectively deliver high-pressure steam, heat and electricity for industrial applications without disrupting core production activities.
Marc Schmitz, Head of Project Finance Europe at Rabobank, emphasised the importance of stable energy infrastructure in supporting industrial decarbonisation. He stated that sustainable and competitive low-carbon energy systems are becoming an essential component of Europe’s wider heat transition strategy.
The project further strengthens HoSt Group’s position in the renewable energy sector. The company specialises in engineering and constructing high-technology green energy systems across multiple international markets. Its broader objective is to achieve 25 million tonnes of carbon dioxide savings by 2032 through the deployment of renewable energy technologies.
The Lower Saxony development reflects a broader shift occurring within European industry. Manufacturers are increasingly prioritising low-carbon thermal energy solutions that combine reliability, regulatory compliance and cost efficiency. Biomass-fired CHP technology is expected to play an expanding role in supporting these objectives.
As industrial companies continue to modernise energy infrastructure, projects such as the Osnabrück CHP facility are likely to serve as reference models for future coal replacement initiatives across Europe.
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