EU awards Finnish biorefinery projects EUR 258.5 million

Finnish companies UPM and Vapo will make investment decisions on Strasbourg and Kemi biodiesel plants in the coming 12-18 months.

The European Commission has awarded the Finnish forest industry company UPM a grant of EUR 170 million for a solid wood-based biorefinery (BTL) project in Strasbourg, France, as part of the EU’s NER300 programme. Finland’s state-owned energy company Vapo has also been awarded EUR 88.5 million for the construction of a biodiesel plant in Kemi, northern Finland.

“The EU’s decision is recognition for UPM’s genuine knowledge in biofuels development work. The technology in the field continues to develop strongly. UPM’s Lappeenranta Biorefinery project will give us good experience also when considering the solid wood-based biorefinery,” says Petri Kukkonen, Head of UPM Biofuels.

World’s first biodiesel refinery

UPM started the construction of the world’s first wood-based biodiesel producing refinery in Lappeenranta, eastern Finland, in summer 2012. The plant is being constructed without any public funding and will produce renewable diesel out of crude tall oil, a residue of pulp production. The process is based on hydrotreatment and production will start in summer 2014.

UPM’s biorefinery planned for Strasbourg will produce renewable diesel from energy wood, such as logging residue or bark. The main end product of both biorefineries, one using solid wood and the other using tall oil as raw materials, is second generation wood-based renewable diesel called UPM BioVerno.

According to UPM, it will continue to clarify the investment prerequisites for the Strasbourg biorefinery. The investment decision is subject to the economic operating environment and the long-term outlook for the market price and availability of wood. Also, amendments to biofuels’ raw material-related directives that are currently being considered by the EU will have an impact on UPM’s investment decision. The final assessment on the investment will be made within 12-18 months.

The EU’s NER300 programme (New Entrants Reserve) is one of the key components of the political decisions targeted at reducing Europe’s carbon footprint.

Sources: UPM, Helsingin Sanomat