ŠKO-ENERGO’s Eco-Friendly Power Generation: A Transition from Coal to Biomass

By Sophia Francise

July 14, 2023

Škoda Auto’s subsidiary ŠKO-ENERGO, which is in charge of providing energy and heating for Mladá Boleslav, is launching a project to modernize its plant to use 100% biomass.

Škoda Auto, a Czech Republican car manufacturer, has been on a journey towards achieving carbon neutrality.

“At Škoda Auto and ŠKO-ENERGO, we are walking the walk when it comes to delivering on our ambitious sustainability goals: The proposed transformation of the ŠKO-ENERGO plant represents the most radical modernization of the company’s energy supplies in the last 25 years,” said Michael Oeljeklaus, Škoda Auto Board Member for Production and Logistics, and Chairman of the ŠKO-ENERGO Supervisory Board.

The project, which is expected to kick off in 2024, will build to its fully carbon-neutral energy production by transitioning to phyto-pellets and wood chips.

The project, which is estimated to cost €141 million ($158 million), will upgrade the heating plant to one of the largest projects of its kind in the Czech Republic.[1]

“At the same time, the scope of the planned project is also one of the largest in the Czech Republic, with estimated costs of €141 million. Over half of this will be covered by subsidies from the Czech Republic’s State Environmental Modernisation Fund. This impressively demonstrates what we are able to achieve on the basis of close, trusting cooperation with our stakeholders,” said Oeljeklaus.

The plant, which is a step toward Škoda’s ambitious strategy to achieve the environmental targets in its Next Level Strategy 2030, is eyeing to start operating within three years.

“Our existing heating plant already upholds modern standards and employs progressive technologies. As part of ŠKO-ENERGO’s strategy, we are committed to ensuring carbon-neutral energy production. Modernizing the power plant at the Škoda Auto manufacturing site is absolutely crucial to this plan. In just three years from the start of construction, both the manufacturing plant and households in Mladá Boleslav will have access to an eco-friendly heat source,” said Tomáš Kubín, the managing director at ŠKO-ENERGO.

Transitioning from Fossil Fuels to Carbon-Neutral Fuels

The project will involve a total revamp of the power plant, where they will switch from fossil-fueled boilers to exclusive-use biomass.

They will be made up of 70% wood chips and 30% phyto-pellets and will save an estimated 290,000 tonnes of CO2 each year.

The biomass will be verified in accordance with both European and Czech legislation, highlighting the overall sustainability of the supply chain. 

ŠKO-ENERGO power plant has used biomass since 2005 and is currently combining it with coal.


By 2022, Škoda Auto’s Czech production plants used 35% renewable energy, a steady increase in eco-friendly fuel usage.

The transition is part of Škoda Auto’s ambitious environmental targets, where it is aiming to reduce its carbon footprint by transitioning to carbon-neutral production at its Czech Republic and India plants by the end of this decade. 

The plant in Vrchlabí already achieved this milestone in 2020.


  1. Škoda Auto, ‘Škoda Auto on the road to carbon neutrality: ŠKO-ENERGO power plant to transition to 100% biomass’, 13 June 2023, https://cdn.skoda-storyboard.com/2023/07/230713_SKO-ENERGO-power-plant-to-fully-transition-to-biomass_d6abf677.pdf.[]