UPM invests in a biorefinery to produce biobased chemicals from wood at Leuna


Type of post: NEWS.

UPM enters the biobased chemicals business by investing in a biorefinery at Leuna (Germany). The biorefinery will produce a range of 100% wood-based biobased chemicals which will enable a switch from fossil raw materials to sustainable alternatives in various end applications. The investment opens totally new markets for UPM with large growth potential for the future.

Figure 1. UPM bio-MEG

In October 2017, UPM announced that it was evaluating the construction of a wood-based biorefinery to produce green chemicals in Germany and some preliminary information about its plans was unveiled. Yesterday, the Finish company confirmed its intention of investing in that project aimed at creating a totally new sustainable business in biochemicals with large growth potential. A combination of sustainable wood supply, unique technology concept, integration into existing infrastructure at Leuna as well as the proximity to customers will ensure competitiveness of operations. The safety and sustainability of the value chain will be based on UPM’s high standards.

Location
Chemical Site Leuna close to Halle-Leipzig.
InfraLeuna GmbH, in the state of Saxony-Anhalt, offers very competitive conditions for constructing a biorefinery with its existing permitting processes, logistics arrangements and infrastructure for various services and utilities.
[Note: Chemical Park Frankfurt-Höchst was pointed out as potential location in a previous press release.]
Feedstock
Wood sourcing will be based on forest thinnings and residues of regional sawmills.
Availability of sustainably sourced hardwood in the region is good.
Products and production capacity
- Bio-monoethylene glycol (bio-MEG) and bio-monopropylene glycol (bio-MPG).
Application areas for bio-MEG include textiles, PET bottles, packaging and deicing fluids. Bio-MPG is used for example in composites, pharma, cosmetics and detergents. The global glycols market represents more than 30 Mtons in size and is expected to grow annually approximately by 4%.
- Lignin-based renewable functional fillers.
They are used in different rubber applications as a sustainable alternative to carbon black and silica. The global market for carbon black and silica combined is more than 15 million tonnes with an expected annual growth of approximately 3%. Besides climate benefits UPM’s new renewable functional fillers will provide additional benefits such as lighter weight and high purity.
Production   capacity
220,000 metric tons per year.
[Note: 150,000 metric tons per year was pointed out as target capacity in a previous press release.]
Investment
550 M€.
Following the decision UPM increases the estimate for total capital expenditure in 2020 to 1,300 M€.
Timeline
- The engineering and planning is on-going.
- The tendering for the main equipment, recruitment for the project and permitting process will start immediately.
- Permitting will proceed parallel to the investment project in line with German legislation.
- Start-up: End of 2022.
- Once the facility is fully ramped up and optimized, it is expected to achieve the ROCE target of 14%.

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