Stora Enso and Neste plan to turn wood scraps into biofuel
Joint venture of forest company and oil refiner praised as "ideal"
The wood processing company Stora Enso and the oil refiner Neste Oil plan to build Finland's first factory that turns wood into biological fuel. The plant is to be built in Varkaus in the southeast of Finland.
The aim of the project is to make use of felling scraps, small trees, and stumps that would otherwise be left in the forests after felling.
At the factory, the wood-based biomass will first be converted into crude biodiesel, which will then be sent to the Neste Oil refinery in Porvoo, which will be turned into a fuel that can be used in vehicles and machinery operating on diesel oil.
Stora Enso CEO Jukka Härmälä feels that the joint venture of a forest company and an oil refinery is ideal, as it allows the refinery to get biomass from forests without having to set up a separate logistics chain.
The production process for the crude biodiesel that is to be produced at the Varkaus plant. It willproduce heat and electricity for use locally and crude biodiesel to be refined into commercial fuel at Neste Oil's refinery in Porvoo.
The recovery and utilisation of gas produced in the processing of wood is a problem that experts around the world have been struggling with.
The method to be used at the Varkaus plant is based on a process developed by Technical Research Centre of Finland (VTT) which has been tested on a smaller scale since the autumn.
The VTT project, which is partially funded through public money, has been operating for four years.
Neste Oil has made considerable progress in the development of biological fuels based on plant oils and animal fats. However, the company's CEO Risto Rinne says that an alternative that is based on raw material that cannot be used for food is sorely needed.
The EU countries have agreed that in 2010 5.75 per cent of fuel used in transport should be of biological origin, and that this should be raised to ten per cent by 2020.
"We will need new raw materials. The vegetable oils grown in fields will not be enough to satisfy it", Rinne said.
Stora Enso's Härmälä says that he hopes to build more bio-fuel plants "as quickly as possible".
He wants that biological fuel plants to be set up alongside pulp mills. He believes that three such plants could be built in connection with Stora Enso sites in Finland, and that a total of six such plants could be set up in Finland.
Härmälä would not comment on the idea of building bio-fuel plants in other countries. However, he said that appropriate locations could be found in South America and China.
"It would be good to take these kinds of realities into consideration in new pulp mills."
Härmälä was critical of the subsidies given for the small-scale burning of wood, which he said is the least efficient use of biological energy.
He said that the Varkaus plant would put the activity into a "sensible industrial scale".
He added that Varkaus was chosen as the location of the first one because it is optimal for the acquisition of wood. "Varkaus has a million cubic metres of biomass in a radius of 80 kilometres, and three million cubic metres in a radius of 120 kilometres."
Stora Enso and Neste Oil are working on the bio-fuel project together, but the agreement leaves open the possibility for the two sides to operate independently.
"We haven't sealed an eternal marriage", Härmälä said.
"However, we are in love", Rinne added.
Neste Oil press release, 16.3.2007: Neste Oil and Stora Enso to join forces in biofuel development