Öresundskraft has made the final investment decision for the project, which involves capturing, transporting and storing carbon dioxide, known as CCS.
The technology has been described as crucial for Helsingborg to achieve its climate goals.
The carbon dioxide - 200,000 tons annually - will be temporarily stored in the port of Halmstad before being transported further for final storage under the North Sea, Öresundskraft writes in a press release.
A similar project is being carried out at Värtaverket in Stockholm.
The EU Innovation Fund and the Swedish Energy Agency have provided funding during the course of the project.
