Paper firm spending $600 million on biorefinery
Friday 28 Feb 2020
It is one of the first major investments in chemical production by a paper company. Several major paper producers, including Stora Enso and Smurfit Kappa, have in recent years launched programs to develop wood-to-chemical processes in a bid to offset declining paper demand.
The Leuna facility will chip wood, extract lignin and sugars, and convert the sugars into chemicals. UPM expects its cost of production to be comparable with that of fossil-based alternatives. “The supply of biochemicals is very limited,” UPM CEO Jussi Pesonen says in a statement. “Due to this, high-quality sustainable alternatives are priced at a premium in the markets.”
“This is without doubt an interesting development, and its implications can be significant, as it offers more sustainable solutions to fossil-based products we use every day,” says Alejandro Mata, a director at the consulting firm Fastmarkets Risi.
But Mata does not expect other paper companies to follow suit at such a large scale in the near future. “The entry barriers are considerable,” he says, adding that UPM has had to invest significant R&D resources to reach the point where it can scale up the technology.
Source: cen.acs.org, Photo: UPM
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