We receive and publish with pleasure this contribution sent by professor Olli Dahl (Aalto University, Finland), who presents a list of all the main investments and their products in Finnish bioeconomy, and considers whether the country’s forest resources can cope with so much new potential capacity in the forest industry sector.
Like other countries in the western hemisphere, Finland faced recession and an ensuing drought in forest related investments in the early 2000’s. For decades Finland had favoured high investment rates in forest based investments, but as paper consumption started to decline and other regions emerge (like Latin America and China) the tendency was to close operations down rather than construct new ones.
Are we now however looking at a renaissance in Finish forest related investments? During the past three years there have been interesting evolving stories not only by existing players but new ventures run by new companies. Such start-ups are totally new phenomena in this field. The following is an overview of investments, planned as well as decided, in Finland
What kind of investments are planned and what are the products? The traditional players seem to be investing in capacity increases in existing mills, the Äänekoski bioproducts mill being the exception. A new pulp production line, although not a greenfield mill as such (it replaces an old pulp mill with something three times bigger), with fairly traditional products. In Table 1 below, all significant projects in the current Finnish pipeline are outlined.
Table 1. Finland’s new and pending forest related projects: Planned investments, capacity increase projects and their main product portfolios.
| Investor | Location, see Figure 1. | Year / investment type | Products and annual capacities | Need of forests resources annually |
| Metsä-Fibre Ltd | Äänekoski | 2017/ Bioproduct mill* | 1.3 Mton Total
0.8 Mton NBSK 0.5 Mton BHKP (+770 kton) |
6.5 Mm3 Total
4.4 Mm3 SW 2.1 Mm3 HW + 4.3 Mm3 |
| UPM-Kymmene Ltd. | Kouvola | 2017 Kraft Pulp Mill | 0.87 Mton (+170 kton)
|
+ 0.8 Mm3 |
| Stora-Enso Ltd | Imatra / Uimaharju | 2019 MCF process / 2019 Kraft Pulp mill | MFC / dissolving pulp 430 kton | No effects |
| Boreal Bioref Ltd | Kemijärvi | 2020 / Biorefinery | NBSK 250 kton, dissolving pulp 169 kton and AaltoCell™ 37.5 kton | SW + 2.9 Mm3 |
| KaiCell Fibers Ltd. | Paltamo | 2021 / Biorefinery | NBSK 435 kton and Arbron™ 100 ktons | SW + 2.5 Mm3 |
| FinnPulp Ltd. | Kuopio | 2021 / Kraft Pulp mill | NBSK 1.2 Mtons | SW + 6.7 Mm3 |
| Kaidi Ltd. | Kemi | 2021 / Biorefinery | Biodiesel 140 kton and bio-gasoline 60 kton | SW + 2.0 Mm3 |
| NEB Ltd. | Kajaani | 2017 / Biorefinery | Bioethanol 10 MLitre | Saw dust |
| SEB Ltd. | Coeval | 2019 / Biorefinery | Bioethanol ≈ 90 MLitre | Local straw |
*Startup August 2017, MFC (Micro Fibrillated Cellulose), AaltoCell™ (various grades of microcrystalline cellulose), Arbron™ (intermediate product for viscose production), SW (softwood), HW (hardwood), NBSK (Northern Bleached Softwood Kraft), BHKP (Bleached Hardwood Kraft Pulp)
Does Finland have enough forest for the new investments?
As illustrated in the map below (Fig.1), three planned greenfield investments are located in areas without existing biorefineries, while the rest must compete for raw material with existing players.
As seen in Table 1, most investments will utilise northern pine. Entirely new fiber products will be produced in Imatra (MCF), Kemijärvi (AaltoCell™) and Paltamo (Arbron™). Biofuels are planned for three sites: Kajaani, Kouvola and Kemi. NEB Ltd. will use sawdust and SEB local straw as a raw material, thus avoiding having to compete with others for raw material. However, Kaidi’s biorefinery intended for Kemi would be surrounded by quite a number of wood processing mills and plants, and it seems the plans call for maximum use of forest residuals and woodchips to keep sourcing costs down. Total increase of annual wood consumption due to new investment seems to be about 20 million cubic metres in Finland.
According to LUKE (Finnish Natural Resources Institute), the annual growth of trees in Finland exceeds the volume of felling and natural loss by over 20 million cubic metres. The age profile of our forests is developing in a manner that makes for an annual sustainable harvesting in excess of 80 million cubic metres of stem wood in the next few decades, whereas the number in recent years have been in the 60 – 65 million cubic metre range. In a nutshell: Finland’s sustainable annual forest growth can sustain all the pending projects, but regional competition may cause cost pressure for some players
Figure 1. Paper-, paperboard-, pulp mills and new investments in Finland. SOURCE: Original figures by Finnish Forest Industries Federation. New investments (orange ball shape) have been added later.
Effects of new investments on foreign trade in Finland?
This is quite complicate issue. However, it can be roughly estimate using very conservative price of chemical pulp (NBSK, BHKP, MCC and dissolving pulp) about 500 €/ton. If all new pulp capacity will be sold abroad, we will get the following estimation (3431.5 kton x 500 €) about 1.7 billion euros per year. If all biofuels will be sold abroad (price 1.6 €/litre) the effect is additional 0.5 billion euros per year. So all the planned new investments will be generate foreign trade about 2.2 billion euros annually.
Third time lucky
The old saying seems appropriate to describe the process shaping policy on Finnish forest usage in. The EU Commission is in the process of drafting its resolution on land use rights (LULUCF), and the final version is expected to be issued by the end of the year.
This is a special year for Finland, as the nation celebrates 100 years of independence. Finnish affluence is deeply rooted in forest-based industries, which have contributed very significantly to the country’s economy throughout its history. Even today, three out of the five top export revenue earners are products based on wood. Forests growth is stronger and healthier than ever. In the last three decades forest growth has actually doubled, with the consequence that currently only 60% of annual growth is harvested. In neighbouring Sweden, the corresponding figure is almost 80%.
Forestry is indeed like tending a garden – the more your foster it, the more it gives back! And sustained growth captures more carbon from the air. The carbon cycle of forests is an integral part of nature’s of big cycle. Only when carbon is released from beneath the earth’s surface will it contribute to CO2-emissions. Therefore sensible industrial wood usage benefits our planet!
Olli Dahl is professor of environmental technology at Aalto University, and takes a comprehensive view of biomass related matters
Olli Dahl is professor of environmental technology at Aalto University, and takes a comprehensive view of biomass related matters
Third time lucky
The old saying seems appropriate to describe the process shaping policy on Finnish forest usage in. The EU Comission is in the process of drafting its resolution on land use rights (LULUCF), and the final version is expected to be issued by the end of the year.
This is a special year for Finland, as the nation celebrates 100 years of independence. Finnish affluence is deeply rooted in forest-based industries, which have contributed very significantly to the country’s economy throughout its history. Even today, three out of the five top export revenue earners are products based on wood. Forests growth is stronger and healthier than ever. In the last three decades forest growth has actually doubled, with the consequence that currently only 60% of annual growth is harvested. In neighbouring Sweden, the corresponding figure is almost 80%.
Forestry is indeed like tending a garden – the more your foster it, the more it gives back! And sustained growth captures more carbon from the air. The carbon cycle of forests is an integral part of nature’s of big cycle. Only when carbon is released from beneath the earth’s surface will it contribute to CO2-emissions. Therefore sensible industrial wood usage benefits our planet!
IL BIOECONOMISTA 