Biorefinery
Mikael Hannus / October 22, 2010
Stora Enso in brief
• Stora Enso is a forest products company producing
newsprint, magazine and fine papers, consumer
boards, industrial packaging and wood products
• 10 million tonnes of paper and board / year
• 5 million m3 of sawn and processed wood products
/ year
• Wood raw material flow ~40 million m3 / year
• Sales EUR 9.0 billion
• 27 000 employees in more than 35 countries
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Introduction
• The Good news:
– Bioenergy & Biorefining is the single biggest growth opportunity in Europe since the
rise of mobile telephony in early 1990’s; global growth in biofuels
– Overall e.g. ~10-20% annual growth for more than a decade
– Stora Enso has lots of capabilities that can be built on
• The Bad news
– The opportunity is fragmented with lots of uncertainty; regulatory, technology and
market risks are significant
– Competing (energy) uses of biomass are a threat to the pulp & paper industry as
such
– Stora Enso’s capabilities are insufficient to cover all aspects; development is fast and
competition is intensifying - some competitors with “unlimited” resources
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Bio economy require bio efficiency
“We cannot afford wasting valuable
biomaterial in processing some
single favored products – that is
sub-optimizing”
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Overall Bioenergy & Biorefining Roadmap
Basic idea: The earlier opportunities bring revenues quickly while also being
the needed base for the higher value added businesses of the future
Value added,
R&D
intensity
Highest value-add,
higher
Biochemicals;
Advanced materials, uncertainties, need
Biopolymers/plastics. external partners
Biofuels
=>Bio-crude wax for renewable diesel
Major demand
growth, regulatory
dependent
Known technology,
Capturing additional value of existing sidestrams new solutions to
old problems
Pellets, power & heat generation and
biomass sales & trading
Now
2008
~2013
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~2015
Immediate market
Timing
(indicative)
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Some of the biorefinery key questions
• Is there a true market pull at a growing market?
• Is the product performance superior to the alternatives?
• At what speed can the biorefinery product penetrate the market?
• What is the sustainability performance of the product?
• What is the feasibility of the business case?
– Capex demand?
• Existing or novel technology?
– Distribution channels?
• Marketing and sales investment?
– Product, investment and market risks?
• Time to get products qualified at customers (and their customers)
• Start-up curve
• Risk of price erosion due commoditization
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Stora Enso / Neste Oil Joint Venture
• 50/50 Joint Venture “NSE Biofuels Oy” to develop
technology and later produce next generation renewable
diesel crude from forest biomass
• First step is a 12MW demonstration plant in Stora Enso’s
Varkaus mill
– Running long-term testing
• Investment decision for a commercial scale plant when
enough experience from the demonstration plant
• Strong development consortium
– Joint Venture partners:
– Testing & research partner:
– Gasification supplier:
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”Public investment support in the
range of 200 M€ is necessary to
balance the risks in technology up-scaling,
raw material cost and politics”
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Snap shot of interesting cases
• Variety of lignin applications
– Lignin as replacement for expensive materials or their components
– Lignin as platform in chemical applications
• Fiber modification
– Use of fiber fragments in non-traditional materials and chemicals
• Extractives and volatile organic compounds
– Variety of uses: plant and wood protection
– Platforms for advanced synthesis of specialty compounds
• Residuals from mills
– Combinations of cost reductions and new value streams
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Towards cost effective commercial
scale biorefining – key areas
• Biomass feedstock
– Sourcing & Logistics
– Competitive uses for biomass
– Sustainability
• Bio material efficiency
– Smart utilization of all fractions
• Integration, efficiency
– Stabile heat sinks
– Shared infrastructure
• Markets
– Producing high value products
– “Right” size for each market
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Lessons learned
• Markets and end products determine the basis for any business
• Biomass can be used to make a lot of different products
• Major research is still needed to imporve fractionation and industrializing the
processes
• Large scale and small scale are both very challenging
• Many potential products need an oil price much higher than today
• Markets of high value products are usually too small – growing the volumes
often slaughter the price levels
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