Biofuel ecosystem

In recent years, biofuels from residues and wastes have gained greater attention in low-carbon fuel regulations. Such fuel have a substantial potential role in reducing Greenhouse Gas (GHG) emissions from the transport sector. The EU has set a target that 10% of traffic fuels should consist of biofuel by 2020, but Finland has set the even more ambitious target of 20% bio by 2020. This is considered viable since Finland is able to increase the domestic biofuels production with new technologies so to benefit from the so called double credit mechanism. This means that biofuels made out of lignocellulosic, non-food cellulosic, waste and residue materials will count double towards the goal.

Unlike in other European countries, strict forest protection is emphasized in Finland. Under various protection programmes and decisions, the area of protected forests has been tripled over the past 35 years. The total area of protected forests and forests under restricted use is almost 3 million hectares, or 13.0% of all forest land. The percentage of strictly protected forests in Finland (5.2% of forest land) is the highest in Europe. Kainuu is a very sparsely populated region with an area of 24,453 km² and population of 80,100. It has extensive forest energy resources. The forested area is more than two million hectares, near to 20 hectares of forest for every citizen. The sustainable cutting plan in the Kainuu region is 4.7 million m³/a. Only one million m³ is processed in the region and half of the whole potential remains unused. Refining high quality fuels from local energy resources offers great potential for the development of the region.

Construction of Kainuu's first bioethanol plant has begun, Kajaani will be a location for St1 Biofuels Ltd.'s bioethanol plant which allows to produce ethanol from a new sustainable source that does not come from the food chain. Therefore the plant project in Kajaani is a significant new venture for St1 Biofuels, both technologically and commercially. The project also will have a huge impact on Kainuu’s economy as the facility will bring a new kind of business ecosystem into the region.


Continuous development of biofuels ecosystem


The EU proposal places great emphasis on the use of wastes and residues as raw materials for biofuels, and our forest industry offers significant domestic raw material potential for sustainable bio-ethanol production. In summer 2014, North European Bio Tech Oy (NEB) announced it would be investing in a €40m 10m l/y cellulosic ethanol plant at Kajaani, using local sawdust as a feedstock. The plant will be implemented and operated by St1 Biofuels Oy. Construction is due to start in mid 2015, with production scheduled to start by mid 2016. ST1 Biofuels will produce bioethanol from waste sawdust, promising environmental, employment and other benefits for Kainuu region. The project will generate about 200 person-years of employment during the design and construction phase, when it’s ready, it will directly and indirectly employ more than 30 people.

Kainuu has significant opportunities in the bioeconomy field, and the ST1 venture is a good example. We have every prerequisite to be a forerunner in the global bioeconomy, with our natural resources, traditions of using them sustainably and our high level of know-how. Not to mention, forest resources, water, energy and biomass are available at affordable costs compared to global market pricing. Also, the Finnish energy tax reform (1 January 2011) gave a tax incentive to bio components meeting the sustainability criteria. MP Eero Suutari says, “The Kajaani venture is also positive from a climate point of view, as it will cut carbon dioxide emissions by about 16,000 tonnes annually.”

The process of making bioethanol has several by-products, many of which can be utilized as a raw-material in after products. The regional development strategy has defined this as a key growth sector and due this end development resources are ring fenced to provide support actions in the creation of the ecosystem.

Corporate Highlights

St1 Biofuels Ltd.

St1 sell traffic fuel containing biofuel at hundreds of service stations across Finland, Sweden and Norway. The company is striving to create fuel mixes with increasing proportions of 2nd generation biofuel in the form of bioethanol made of organic residuals and by-products.

Kajaaniwood Ltd.

Kajaaniwood supports the Pölky sawmills in the procurement of raw materials. Kajaaniwoods saw line cuts the Kainuu pine and spruce for further processing. Sawmill’s by-product sawdust is a suitable raw material for bioethanol production.

Renforsin Ranta Business Park

Renforsin Ranta is a business park that was founded by UPM in 2008 on the site of its former paper mill. The existing diversified infrastructure makes Renforsin Ranta an attractive option for new companies seeking to grow. Currently, the business park houses 25 companies that employ more than 500 employees.

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