UPM: Biofuels Digest’s 2015 5-Minute Guide

As a frontrunner of the new forest industry UPM “leads the integration of bio and forest industries into a new, sustainable and innovation-driven future.” UPM’s structure consists of the following business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper ENA (Europe and North America) and UPM Plywood.

UPM uses fibre and forest biomass in its current products and its aim is to create new growth opportunities based on continuous product development and innovation. UPM provides smart and sustainable products and solutions for its customers worldwide.

Biofuels are a topical example of UPM’s innovation work, with the renewable diesel biorefinery in Lappeenranta due to start operating in summer 2014. Other new businesses include  biocomposites, which are already being marketed to customers, as well as biochemicals and biofibrils, which are currently in the development phase.

In 2013, UPM’s sales exceeded € 10 billion. UPM is present in 65 countries and has production plants in 14 countries. The company employs approximately 21,000 people worldwide. UPM shares are listed on the NASDAQ OMX Helsinki stock exchange.

Model:

Owner-operator

The Situation:

In January 2015, the world’s first wood-based renewable diesel biorefinery started commercial production in Lappeenranta, Finland. UPM Lappeenranta Biorefinery is based on a hydrotreatment process developed by UPM, and produces approximately 120 million liters of renewable UPM BioVerno diesel yearly.

The UPM BioVerno diesel is produced out of crude tall oil, a residue of pulp production, in the UPM Lappeenranta Biorefinery. A big portion of the raw material come from UPM’s own pulp mills in Finland. UPM BioVerno renewable diesel reduces greenhouse gas emissions by as much as 80 per cent compared to traditional diesel. Based on research, high quality UPM BioVerno works with all diesel motors just as well as any regular diesel. UPM has a sales agreement with NEOT (North European Oil Trade), a wholesale organization of oil and biofuel products.

Renewable chemicals are also part of UPM’s BioFore strategy — not wholly unexpected, though the fast-tracking of the foray into chemicals has caused surprise. One critical component was to establish a source of renewable sugars — and, in stealth mode over more than a year, UPM has been chewing through an evaluation process for a technology partner, that ultimately selected supercritical technology and tapped Renmatix as the partner.

In June 2013, UPM and Renmatix, Inc. signed a non-exclusive joint development agreement to further develop Renmatix’s water-based Plantrose™ process. Offering cost-competitive bio-alternatives, the process converts woody biomass into low-cost sugar intermediates for biofuels. Under the agreement, the companies hope to take the second-generation lignocellulosic production process to commercial scale.

Past Milestones:

In December 2014, UPM and WWF Finland have developed a list of joint measures to promote sustainability int he wood-based liquid biofuels industry in Finland. The parties will jointly conduct a scientific forest carbon impact study related to wood-based biofuels. UPM and WWF Finland also commit to further developing the FSC standard and promoting its credibility and use in Finland.

In March 2014, Fortum, UPM and Valmet joined forces to develop a new, winning technology to produce advanced high value lignocellulosic fuels, such as transportation fuels or higher value bio liquids. The idea is to develop catalytic pyrolysis technology for upgrading bio-oil and commercialise the solution. The five-year project is called LignoCat (lignocellulosic fuels by catalytic pyrolysis). The project is a natural continuation of the consortium’s earlier bio-oil project together with the VTT Technical Research Centre of Finland, commercialising integrated pyrolysis technology for production of sustainable bio-oil for replacement of heating oil in industrial use.

Also in March 2014, VTT and UPM announced that the tests they’ve been performing on UPM’s renewable diesel since last May have shown that the fuel works just as well as fossil diesel. The tests used a 20% blend of UPM’s BioVerno on four Volkswagen Golf 1.6 TDI cars that traveled 20,000 km each during the course of the trial. The tests looked at fuel functionality in the engines as well as fuel consumption.A joint production by UPM and Helsinki Metropolia University of Applied Sciences, the Biofore concept car, was premiered at the 84th Geneva International Motor Show, March 6-16, 2014. Various parts of the concept car are made from UPM’s biobased materials – the UPM Formi biocomposite and UPM Grada thermoformable wood material. These materials will significantly improve the overall environmental performance of the car, without compromising quality or safety. The concept car will be fuelled by UPM BioVerno wood-based renewable diesel.

In January 2013, the European Commission awarded a $222 million grant to Finland’s UPM to develop a wood-to-biodiesel facility in Strasbourg. Finalization of the project is expected to take place during the next 12-18 months as the last studies regarding the availability and sourcing of wood-based raw materials  are completed.

In November 2012, UPM laid the foundation stone at its Lappeenranta Biorefinery. Construction began in summer 2014 and the biorefinery will start producing renewable diesel made from tall oil in 2014. “The EUR 150 million investment to Lappeenranta is UPM’s spearhead project and the first step on our way to becoming a significant producer of advanced second generation biofuels. The Biorefinery is also a focal part in the realisation of our Biofore strategy, combining the bio and forest industries,” says UPM President and CEO Jussi Pesonen. The UPM Lappeenranta Biorefinery is the first significant investment in a new and innovative production facility in Finland during the ongoing transformation of forest industry. It will be realised without public investment grants.

In June 2010, additional detail was been forthcoming on the UPM Kymmene advanced biofuels project at the at the Kaukas mill in Lappeenranta. The company, which will produce renewable diesel, renewable gasoline and renewable kerosene from bio-oil made from fats, oils and wood waste, will also produce a renewable naphtha. The plant is now expected to debut at a 5.5 Mgy capacity, up from an original disclosures of an initial capacity of  680,000 gallons per year. The plant is now expected also to have a potential capacity in the 55 Mgy range.

Future Milestones:

Future Commercial scale technology deployments, inclusing (potantially) the Strasbourg project

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