Svenska Cellulosa Aktiebolaget (SCA) and St1 Nordic Oy (St1) have declared that they have entered into a joint venture to manufacture and sell liquid biofuels. The Swedish forest industry major will supply tall oil, which is a by-product from its kraft pulp mills, and will invest approximately SEK 0.6 billion (EUR 58.8 million) in the joint company.
Both the Swedish and Finnish companies will be equal shareholders of the joint venture, which will itself have a 50% 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.
St1 is investing an estimated SEK 2.5 billion (EUR 245 million) in a biorefinery unit at its oil refinery in Gothenburg. Although still under construction, the biorefinery unit will have the capacity to produce 200.000 tonnes of liquid biofuels annually.
The facility 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 the second trimester of 2023.
As part of the agreement, St1 also becomes a 50% shareholder of SCA Östrand Biorefinery. The Östrand biorefinery project received environmental permits for the production of 300.000 tonnes of liquid biofuels based on black liquor, another by-product from kraft pulp production, and solid biomass residues such as sawdust or bark. Still, 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.