UPM's Biofuels business resources are currently directed to the construction of the Lappeenranta biorefinery. The company will also continue to clarify the investment prerequisites in Strasbourg. The final assessment on the investment will be made within 12-18 months.
UPM's 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 EU's decision is recognition for UPM's genuine knowledge in biofuels development work. The technology in the field continues to develop strongly. UPM Lappeenranta Biorefinery project will give us good experience also when considering the solid wood-based biorefinery," says Petri Kukkonen, Head of UPM Biofuels.
The EU's NER300 programme (New Entrants Reserve) is funded by the sale of emission allowances to European companies. The programme is one of the key components of the political decisions targeted at reducing Europe's carbon footprint. UPM biofuels reduce greenhouse gas emissions considerably compared to fossil transport fuels.
UPM's first biorefinery project in Lappeenranta proceeds
UPM started the construction of the world's first wood-based biodiesel producing refinery in Lappeenranta in summer 2012. UPM's Lappeenranta biorefinery, constructed without any public funding, 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.