Neste, Stora Enso to produce biofuel from wood

Neste Oil Corp. has signed an agreement with Finnish paper maker Stora Enso Oyg to jointly develop technology for producing new-generation biofuels from wood residues.

Mar 19th, 2007

By OGJ editors
HOUSTON, Mar. 19 -- Neste Oil Corp. has signed an agreement with Finnish paper maker Stora Enso Oyg to jointly develop technology for producing new-generation biofuels from wood residues. This decision aids the European Union's mandate of replacing 5.75% of fossil fuels used in transportation with biofuels by 2010 and 10% by 2020.

The joint venture partners will first design and build a €14 million demonstration plant to be integrated into the energy infrastructure at Stora Enso's Varkaus Mill in Finland. The plant, to be owned equally by the partners, is expected to start up in 2008. Gas produced will equal the energy needed to heat 4,300 homes and cut carbon dioxide emissions "significantly," Neste said.

Neste and Stora Enso will team up with VTT Technical Research Centre of Finland to implement the development phase and commercialize wood-based biofuel production.

"The challenges related to generation of clean synthesis gas from wood will need to be solved before wood-based biomass can be used in biofuel production," Neste said.

Following the development phase, if technical solutions are ready and the partners have gained enough experience from the demonstration plant, the JV will build a full-scale commercial production plant at one of Stora Enso's mills. This facility also will be owned on a 50:50 basis.

Stora Enso will supply the wood biomass and utilize the heat generated at its pulp and paper mill, while Neste will be responsible for final refining and marketing of the biofuels.

In addition to using wood, Neste said, the project will also focus on using Fischer-Tropsch process to produce crude biodiesel from gas, which will be refined at its Porvoo refinery.

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