The Ministry of Employment and the Economy aims to boost biofuel production using domestic logging scraps as raw material. The main obstacle is the costly investment needed for efficient generation.
“In order for this to make sense, we have to set up very large facilities, which cost a lot,” explains Jukka Saarinen, a senior engineering advisor at the ministry. “On the other hand, this is a good product that can be used to fill the tanks of diesel vehicles pretty much anywhere from zero up to 100 percent.”
The first such refineries will cost an estimated 500 million euros apiece. The European Union has already agreed to provide some subsidies, and Finland’s state-owned fuel company Vapo is now gathering basic capital from investors. A final go-ahead decision on the first Finnish project is expected next autumn.
UPM bets on pine power
Meanwhile the Finnish forest products giant UPM has secured subsidies for a similar project in France. The company is already building a different kind of biorefinery in Lappeenranta, eastern Finland. It will produce second-generation biodiesel for transport from crude tall oil from pine, a by-product of pulp manufacturing.
Petri Kukkonen, UPM’s Vice President, Biofuels, is confident that the plant will be commercially viable. He is wary about the idea of plants running on logging waste, though.
“When a study shows whether it makes sense, then we’ll make decisions based on that. But it’s very hard to say when a new technology will be ready. If there’s a refinery by the end of this decade, then that’ll be good,” he told Yle.
St1 expanding waste usage
The St1 service station chain is already offering 85 percent ethanol petrol made from food waste from homes, shops and industry. It can only be used in flexible-fuel vehicles, but lower levels of ethanol can be mixed into standard gasoline for use in regular cars.
St1 Biofuels has five small refineries around the country and plans for more, says CEO Mika Aho.
“We intend to expand the production of ethanol through this decentralised system, in the future using waste material that contains cellulose as raw material,” he says. This could include sawdust, straw or waste liquor from paper or pulp plants.
These are all domestic sources that do not compete with food production. This is in contrast with the South-East Asian palm oil that is primarily used by Finland’s Neste Oil in its E10 petrol, for instance.
According to an EU directive, renewable energy should account for at least 10 percent of road transport fuel by the end of this decade. Finland has set its own target of 20 percent.
This may also include cars running on biogas or electricity – as long as it is produced from renewable sources.