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Chinese energy giant plans €1bn biofuel plant in northern Finland

The Chinese firm Kaidi announced that it wants to build a big biodiesel refinery in Kemi. Kaidi Finland's CEO says this signals a new phase in Finnish industrial history, driven by the need to replace fossil fuels with biofuels.

Pekka Koponen tiedotustilaisuudessa Finlandia-talossa Helsingissä.
Kaidi Finland CEO Pekka Koponen spoke at Helsinki's Finlandia Hall on Feb. 10. Image: Antti Aimo-Koivisto / Lehtikuva

One of China's largest bio-energy companies intends to build a large biodiesel refinery in northern Finland.

It made the announcement at a high-profile event at Finlandia Hall on Wednesday morning, where the head of its newly-established Finnish subsidiary spoke alongside top officials from the Ministry of Employment and the Economy.

The total investment could be as much as a billion euros, says Pekka Koponen, CEO of Kaidi Finland. Construction could begin next year, creating an estimated 4,000 jobs during the building process. After the plant is up and running it would have a staff of around 150.

Up and running in 2019?

The refinery's raw material would be so-called "energy wood," which includes scrap wood and by-products of logging such as roots and stumps, making it the first of its kind in the world. Kaidi estimates that it would produce some 200,000 tons of biofuel annually, with three quarters of that biodiesel and the rest biogasoline.

The final investment decision and selection of partners will be made this year, says Koponen. The refinery would begin commercial operations by the end of 2019.

Koponen modestly claimed that the announcement signals a new phase in Finnish industrial history, driven by the need to replace fossil fuels with biofuels. He pointed out that Finland is well placed to be a European leader in the field thanks to its forest know-how, technology and resources.

Minister: "Badly needed"

Minister of Justice and Employment Jari Lindström welcomed the news, saying that the investment is "just the kind of news that our country badly needs at the moment".

Kaidi Finland, which was set up this year, is owned by Sunshine Kaidi New Energy Group. The firm already has biomass refineries in China and Vietnam.

Established in 1992, Kaidi has a market value of more than seven billion euros and a payroll of more than 8,000 people.

According to Kaidi's website, it aims to "build a low-carbon circular economic system, with industry as pillar, industry driving agriculture, covering new energy industry, green agriculture, and forest, so as to benefit peasants, China, and the world."

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