31 Mar 2021
EUR 63 million
Infrastructure, transportation and telecom
|Date of agreement:||30 Oct 2020|
|Amount in EUR:||EUR 200 million|
|NACE sector / loan type:||Manufacture of other organic basic chemicals|
The loan has been provided to UPM-Kymmene Oyj for financing the construction of an industrial-scale biorefinery in Leuna, Germany. The UPM Leuna biorefinery will convert wood into a range of 100% wood-based next generation biochemicals that offer renewable and sustainable alternatives to fossil materials in various consumer-driven end-uses.
Main products include bio-monoethylene glycol (BioMEG) and lignin-based renewable functional fillers. In addition, the facility will produce bio-monopropylene glycol (BioMPG) and industrial sugars.
The facility is expected to be operational by the end of 2022, and it will produce approximately 220.000 tonnes of renewable biochemicals annually.
UPM-Kymmene Oyj is a Finnish forest industry company, consisting of six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Speciality Papers, UPM Communication Papers and UPM Plywood. The group employs around 18,349 people and has production plants in twelve countries. UPM is listed on NASDAQ OMX Helsinki.
The project significantly expands the product portfolio of UPM into new markets with large growth potential for the future. The commercialization of the new products relies on outcomes from the company’s R&D activities in biochemical production, mostly conducted at the company’s R&D unit in Lappeenranta, Finland. The project thus contributes to the development of transferable knowledge in the forest sector the forest products sector and may have some demonstration effects that facilitate further development of wood-based chemicals in member country companies.
The biorefinery will annually produce 220,000 tons of biochemical products that can replace fossil-based materials in various consumer goods. Thus, these biochemicals can enable the transition into a bio-based and circular economy, resulting in reduced pollution. Wood biomass will be sourced from sustainably managed forests in the region. The company has estimated that the carbon footprint of biochemical products will be significantly lower than of corresponding conventional chemical products. A third party verified Life Cycle Assessment (LCA) of the production is planned for 2021 to confirm the carbon footprint.
Indicators for the expected impact of the investment:
Annual output: 220,000 tons of biochemical products that can replace fossil- based materials in various consumer products
R&D to sales ratio of UPM: 0.5%
This is a project with a potentially extensive environmental and/or social impact (category A, read more)
An Environmental Impact Assessment (EIA) report was completed in January 2020. The biorefinery will be located within the limits of the existing chemical industry park in Leuna, where the necessary infrastructure – including traffic routes, drainage and wastewater treatment systems, water supply and energy supply – are already in place. The operation of the biorefinery is not estimated to cause any significant negative impact on surrounding areas and also the impacts on natural environment are assessed to be limited. The potential impact on nearby residential areas include air, odour and noise emissions, which will be mitigated using the relevant abatement methodology.
Environmental and building permits are still pending but permit decisions are expected to be received by early 2021. In addition, UPM plans to have a third party verified Life Cycle Assessment (LCA) of the production in the beginning of 2021.
UPM has certified environmental (ISO14001 and EMAS), quality (ISO9001) and occupational health and safety (OHS18001) management systems in place. Specific plans for environmental, health and safety management for the construction and operation of the biorefinery are prepared. Further steering comes in form of the common requirements for the industrial park and from the park operator InfraLeuna.
The company is committed to the Science Based Targets (SBT) initiative and the UN Global Compact’s Business Ambition to limit global temperature rise to 1.5˚C. UPM aims to mitigate climate change and drive value creation through innovating new products and by practicing sustainable forestry. In addition, the company has committed to a 65% reduction in CO2 emission by 2030.