Biofuels Business

UPM's long-term target is to become a major player in Europe in the production of renewable, high-quality advanced biofuels.

Biofuels fit well to UPM's current businesses – our profound experience in forest biomass and extensive resources can be used effectively for developing biofuels business.

BIOFUELS FROM NON FOOD-BASED RAW MATERIALS

All of UPM's biofuel concepts are based on non food-based raw materials.

The raw materials to be used in the production of advanced biodiesel would mainly consist of energy wood:

• logging residues
• woodchips
• stumps
• bark.

Additional raw material potential comes from the utilisation of industrial side streams. UPM's role in the forest biomass value chain creates a competitive edge as UPM is the world's largest supplier of energy wood.

Sustainability of operations has been one of the main criteria in the development of the biofuels business. UPM's biofuel production concepts result in the significant reduction of greenhouse gas emissions.

As an example, advanced wood-based biodiesel for transport use would generate over 85% fewer emissions throughout the value chain compared with fossil fuels.

DEMAND FOR BIOFUELS WILL GROW

Biofuels have a global market of 70 billion euro and the market is estimated to grow by 8-18% annually by 2020.

Producing biofuels from renewable raw materials in accordance with UPM's plans contributes to the European Union's long-term climate and energy targets.

The EU has made a commitment to increase the use of renewable energy. Renewable energy replaces fossil fuels, diversifies the energy supply and reduces carbon emissions.

The EU's climate and energy targets for the year 2020 are:

• 20% reduction in CO2 emissions
• 20% of energy coming from renewable sources
• 20% improvement in energy efficiency
• 10% of renewable energy in transport..

The minimum of a 10% share of biofuels use in transport is applicable in all EU Member States. Biofuels tackle the oil dependence of the transport sector, which is one of the most serious issues affecting energy supply security that the EU faces.

Demand for advanced biofuels will increase in the coming years, as the EU's target cannot be reached with the current first generation biofuels alone.