Investors mull EUR1bn biorefinery in Estonia

Domestic sector investors are considering building a biorefinery in Estonia with a EUR1bn investment. If it goes ahead it would be the largest ever industry investment in Estonia.
Investors mull EUR1bn biorefinery in Estonia

Wood biorefinery components (Etschmann DECHEMA, CC-BY-SA)

After completion it would also be the most modern biorefinery in Europe. The value added by the mill would be EUR210 to EUR270m, approximately 1-1.4 per cent of Estonia’s GDP in 2015.

Wood is currently exported to Nordic countries as a raw material and the biorefinery would increase the added value to the wood by four to five times, according to the investors.

According to the National Renewable Energy Action Plan, Estonia’s target for 2020 is a 25 per cent share of energy from RES in gross final energy consumption with at least 10 per cent share of biofuels in final energy consumption in the transport sector.

According to the National report on RES submitted to the EU in 2015, Estonia already fulfilled the EU requirement of over 25 per cent share of RES in total energy in final energy consumption.

However, the requirement of 10 per cent of RES in transport is very far from the required 10 per cent required by the EU.

The highest shares of renewables were found in Sweden, Latvia, Finland and Austria but the EU has set countries different individual goals according to their circumstances, and only Estonia exceeded theirs.

Margus Kohava, a forestry industry expert, and Aadu Polli, who has international forest industry sector experience, are leading the biorefinery project.

“The biorefinery would annually increase Estonian exports by EUR250-350m, meanwhile the value of overall exports of Estonian products would grow by 2-3 per cent. As a result of building the mill, Estonian’s manufacturing industry sector’s average added value would increase by 7-9 per cent per employee,” Kohava said.

The mill would create 200 qualified new direct jobs outside the capital region and in addition 500-700 new jobs in the value chain servicing the mill.

It would become a unique new-generation bioproducts mill in Estonia that would, in an environmentally sound way, make products from renewable raw materials such as market pulp or other bioproducts made from cellulose, hemicellulose and lignin including green energy.

The plant would produce 25 per cent more renewable energy than its own use for the production process. The electricity production from renewable energy would increase by 34-45 per cent in Estonia.

According to the initial prognosis, the biorefinery would launch production in 2022, the investors said. The annual planned production capacity would be up to 700,000 tons of pulp. As a raw material, the mill would annually use approximately three million cubic meters of pulpwood and wood chips that are currently being exported out of Estonia with four to five times lower value. The wood would mostly come from Estonia and also from Latvia or Lithuania if necessary, the investors said.

Various locations in Estonia are being analyzed as the potential sight for the biorefinery. The prerequisites for the mill include 100 hectares of land, a location close to raw materials with an operating network of roads and rail, an access to a sustainable river water resource and local qualified labor force.

Wood biorefinery components (Etschmann DECHEMA, CC-BY-SA)

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