Syntholene Energy Corp (TSXV: ESAF) has signed a one-year site lease and received a construction permit for a demonstration facility at the Husavik Power Station in Nordurthing municipality, northern Iceland, where the company will test a geothermal-coupled solid oxide electrolyzer cell (SOEC) system designed to produce synthetic jet fuel. The site lease was executed on April 13, 2026; the construction permit was issued March 17 and is valid through March 2027.
The Husavik Power Station stopped geothermal power production in 2010 but was preserved with its core systems intact. Syntholene intends to leverage the geothermal heat available from the adjacent Hveravellir field to reduce the net electricity consumption of its SOEC electrolysis process. The company claims the thermal integration cuts eSAF production cost by 70% compared to competing electrolysis technologies, though the basis for that figure is not detailed in the press release. The demonstration program will run approximately 1,000 hours of effects testing to generate data for engineering optimization, permitting, and commercial scale-up validation, with third-party technoeconomic validation by a major petroleum EPC firm planned for early 2027.
The eSAF cost problem is real: electrolytic hydrogen remains expensive enough that power-to-liquid jet fuel typically prices several times above fossil kerosene even with current incentives. If the geothermal coupling genuinely reduces electricity demand at the electrolyzer, the economics could shift materially — but the demonstration exists precisely to determine whether the laboratory assumption holds at operating scale.
“This lease and permit represents a transformational step in establishing Syntholene’s Icelandic footprint.” — Dan Sutton, CEO, Syntholene Energy Corp
“This lease and permit represents a transformational step in establishing Syntholene’s Icelandic footprint,” said CEO Dan Sutton, who described the site as offering “an exceptional combination of geothermal availability, infrastructure, workforce readiness, and political alignment.” Mayor Katrin Sigurjonsdottir of Nordurthing said the municipality’s goals “align with the goals of” Syntholene regarding “sensible use of geothermal energy to produce cost effective and environmentally friendly synthetic fuel.”
The demo facility is the latest in a series of steps Syntholene has taken since listing on the TSX Venture Exchange. In January 2026 the company secured an expression of interest from Icelandair for 250 million litres of eSAF over ten years, subject to pricing and commercial terms yet to be negotiated. In February, it selected Dynelectro — a Danish electrolyzer company it described as the developer of the world’s most efficient SOEC — as its technology vendor, and added former Icelandair COO Jens Thordarson to its advisory board. In March, it closed a $3.75 million private placement and completed a conceptual design report and technoeconomic analysis.
The pathway Syntholene is testing sits in the power-to-liquid segment that European blending mandates are creating specific demand for. ReFuelEU’s eSAF sub-mandate requires 1.2% electrofuel from 2030, rising to 5% by 2035. Production at commercial scale does not yet exist. Syntholene is one of a cluster of startups — including Metafuels (methanol-to-jet, Rotterdam) and Sora Fuel (direct air-to-jet, US) — trying to reduce the cost gap before the mandate creates legally enforceable demand in 2030.
