Swedish forest industry major Svenska Cellulosa Aktiebolaget (SCA) and Finland-headed energy company St1 Nordic Oy (St1) have announced that they have entered into a joint venture to produce and sell liquid biofuels. SCA will supply tall oil, a by-product from its kraft pulp mills, to the joint venture and will invest approximately SEK 0.6 billion (≈ EUR 58.8 million) in the yet-to-be-named company.
SCA and St1 will be equal shareholders of the joint venture, which will itself have a 50 percent share in the St1 Gothenburg Biorefinery in Sweden.
Partnership with SCA is a key element in the implementation of our renewable fuels investment program and it secures the supply of renewable feedstock materials to meet the ambitious Nordic climate targets for 2030, said Henrikki Talvitie, CEO of St1 Nordic Oy.
Secure feedstock to St1 Gothenburg Biorefinery
In Gothenburg, St1 is investing an estimated SEK 2.5 billion (≈ EUR 245 million) in a biorefinery unit at its oil refinery. Currently under construction, the biorefinery unit will have the capacity to produce 200 000 tonnes per annum of liquid biofuels.
It is designed to optimize the production of renewable diesel (HVO) and sustainable aviation fuel (SAF) using a variety of feedstocks and is expected to be operational in Q2 2023.
The announced joint venture will have access to SCA’s tall oil, a by-product from the kraft pulp production at SCA’s mills in Östrand, Obbola, and Munksund.
St1 takes stake in SCA Östrand Biorefinery
As part of the agreement, St1 also becomes a 50 percent shareholder of SCA Östrand Biorefinery. The Östrand biorefinery project has recently received environmental permits for the production of 300 000 tonnes of liquid biofuels based on black liquor, a by-product from kraft pulp production, and solid biomass residues such as sawdust or bark.
The biorefinery in Östrand is a development project where a number of technological challenges remain to be solved before a project design can be finalized.
In line with our communicated long-term strategy, we will now with the joint venture with St1 go from being a supplier of tall oil to the chemical and fuel industries to becoming active in the further refining of our renewable raw materials, said Ulf Larsson, President, and CEO of SCA.
