Friday, January 18, 2019

UPM May Build New Biofuel Plant in Finland

Posted by February 5, 2018

Pulp and paper maker UPM is looking at building a new renewable fuel plant in Finland, it said on Monday, part of efforts to find new sources of growth in response to falling paper demand in Europe.

UPM is the world's largest maker of graphic papers such as newsprint and magazine paper, where demand is in decline due to a shift from print to digital publishing.

The proposed plant in Kotka, southern Finland would produce about 500,000 tonnes of advanced biofuels for the transport sector.

The biofuel would be made of renewable feedstocks that could include sawdust, wood branches and an inedible oilseed crop that UPM has developed for growth in Uruguay.

The plant's size would clearly exceed UPM's existing, 100,000 tonne biofuel plant in Lappeenranta, Finland.

"We will not comment on a possible price tag at this point ... Lappeenranta plant cost 150 million euros, this project would obviously be much larger," Petri Kukkonen, Vice President of UPM's Biofuels Development, said.

He noted that UPM had only just started an environmental impact assessment for the possible plant and that he had no projections on when it could be up and running.

With the Lappeenranta plant, started in 2015, UPM was the first in the world to produce biofuel in commercial quantities from "crude tall oil", a residue of wood pulp production that produces significantly lower emissions than traditional diesel fuel.

UPM has not disclosed financials for the plant, but Kukkonen said the operation was profitable.

Last week, the company last week reported falling 2017 sales at its European paper division, its largest unit, but growth in other, more profitable products. The bulk of UPM's profits comes from pulp and paper products as well as its energy assets.

Last year, UPM started evaluating the potential of building a smaller biorefinery in Germany to convert wood into materials that can be used in textiles, bottles, composites and plastics.

Reporting by Jussi Rosendahl

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