by Jussi Rosendahl (Reuters Canada) It has created a modest 200 jobs in a Finnish forestry industry that has lost around 20,000 in the past decade, but UPM-Kymmene’s new biofuels plant offers long-awaited growth and hope.
The 180 million euro ($200 million) investment in wood-based renewable fuel production marks the first major case of transformation in a sector that has long been managing decline.
UPM still makes 50 percent of its revenue from sales of paper, and biofuels can’t yet plug a gap created by consumers in European export markets shifting from magazines and newspapers to smartphones and tablets.
But the new plant, a global first, is already breaking even after little more than a year in operation in the eastern town of Lappeenranta; its success now needs to be replicated across the economy if Finland is to drag itself out of stagnation.
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UPM’s plant is the first of its kind in commercial use, making biofuel for diesel vehicles from crude tall oil, a residue of pulp production.
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It uses crude tall oil from a pulp mill on the same site – which also has a biomass power plant and a sawmill – as well as other mills elsewhere. The product is blended with conventional diesel fuel.
“The first year was a bit challenging, which is natural when you’re ramping up a plant which is first of its kind,” said the plant’s production manager Jaakko Nousiainen. Once the 100,000 tonne target was reached, UPM would look at ways of increasing capacity by improving the production process, he added.
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Finland has set a target for 20 percent of all transport fuel to be from renewable sources by 2020, rising to 40 percent by 2030. The European Union target is just 10 percent by 2020. READ MORE