Uudet energialähteet ja joustava voimantuotanto Renewable diesel from tall oil Ville Vauhkonen UPM Biofuels R&D UPM today UPM Biorefining UPM Plywood • Plywood and veneer products • • • • • Pulp Plantations Biofuels Sawmills Wood sourcing and Forestry UPM Paper Asia • Fine papers in China and Asia Pacific • Labelling materials globally Sales 2014: EUR 10 billion Personnel: 20,000 UPM Paper ENA Shareholders: approx. 90,000 • Magazine papers in Europe and the USA • Newsprint and fine papers in Europe UPM Raflatac • Label materials for product and information labelling UPM Energy UPM Biocomposites UPM Biochemicals | © UPM • Hydro-, nuclear- and condensing power (incl. shares in energy companies) • Electricity production and trading Biofore growth opportunities – added value of wood and biomass Biofibrils UPM BioVerno Biofibrils Biochemicals UPM ProFi Biofuels for transportation Bioenergy – heat and electricity UPM Grada Labels and composites Pulp, paper, plywood and sawn timber Sourcing and logistics of wood and biomass 3 | © UPM | © UPM Internal UPM Formi Wood raw material is the basis of many different businesses at UPM Fibres to pulp Bark and branches to renewable diesel and energy Fibres to biofibrils and biocomposites Extractives to renewable diesel or biochemicals Logs for sawn goods and plywood 4 | © UPM Ligning, cellulose or hemicellulose to biochemicals UPM Biofuels Strategy UPM BIOFUELS UPM’s journey in advanced biofuels In 2006 UPM published its plans to become a significant producer of advanced biofuels. 6 | © UPM Development of BTL technology ongoing at GTI pilot plant in Chicago, USA Development of hydrotreatment process started in UPM R&D In 2012, first investment decision of 175 MEUR for UPM Lappeenranta biorefinery. Produces renewable diesel from tall oil. Business is expanding in stages. UPM BIOFUELS UPM Biofuels Strategy Renewable fuels • Drop-in fuels fully compatible with all vehicles and fuel distribution systems Wood-based raw materials • Renewable wood-based raw materials not suitable for food production Sustainable operations • Sustainable supply chain • Low emission products UPM will become a major player in advanced biofuels Revenue target > 1 billion €/a 7 | © UPM UPM BIOFUELS UPM Biofuels growth strategy ENTERING BUSINESS EXPANDING BUSINESS GROWTH OF BUSINESS 8 | © UPM HYDROTREATMENT Tall oil UPM Lappeenranta Biorefinery start-up 2014 THERMAL CONVERSION Wood raw material Gasification (BTL) / Pyrolysis FUTURE DEVELOPMENT New technologies, processes and raw materials R&D activities and co-operation with strategic partners UPM and Biofuels have gained global recognitions UPM renewed its position in Dow Jones Sustainability Indexes in 2014 - 2015 UPM recognized as one of world leaders for corporate action on climate change on the A list in the CDP Climate Performance Leadership index 2014 UPM Biofuels - Award for Breakthrough Innovation in Technology in 2013 UPM BioVerno - Winner in Travelling category 2014 awarded by European Commission 9 | © UPM Internal UPM Lappeenranta Biorefinery UPM BIOFUELS – HYDROTREATED BIOFUELS UPM invests in wood based renewable diesel in Lappeenranta • UPM invests in the world’s first advanced wood based biofuels production in South Eastern Finland, Lappeenranta • Main product of the biorefinery is advanced, second generation renewable diesel • Raw material is sustainably produced crude tall oil, which is used in a highly efficient hydrotreatment process • Technology is based on UPM’s innovations and Biofore strategy inspired long-term development work 11 | © UPM UPM BIOFUELS – HYDROTREATED BIOFUELS First step in UPM’s biofuels business UPM Lappeenranta Biorefinery • Commercial scale industrial investment • Total investment 175 EUR • Production 100 000 tons/a of renewable diesel • Crude tall oil as raw material, residue of pulp making process • Hydrotreatment as process • Production started January 2015, Investment decision 2012 • Employs in total 200 persons (incl. indirect) • Contributes to 25% of Finland’s biofuel target in 2020 RENEWABLE DIESEL 12 | © UPM UPM BIOFUELS – HYDROTREATED BIOFUELS Raw material: Crude Tall Oil (CTO) • • • Residue of chemical pulping process Yield 20−50 kg CTO/ton of pulp Global production now > 1 700 000 tons/a - • Additional CTO supply potential clearly above demand globally Significant share burnt for energy • Most of the raw material comes from Finnish pulp mills UPM Lappeenranta refinery minor addition to total demand of crude tall oil More efficient use of wood without increasing logging Utilization of low grade CTO 13 | © UPM • • Residue No indirect land-use change Outside food value chain UPM renewable diesel process 14 | © UPM Capturing synergies by full integration into UPM Kaukas mill site in Lappeenranta, Finland 1 RESEARCH CENTRE 3 BIOMASS POWER PLANT 5 SAW MILL 2 BIOREFINERY 4 PULP MILL 6 PAPER MILL 2 1 3 5 4 6 15 | © UPM UPM BioVerno – Unique Renewable Diesel UPM BIOFUELS UPM BioVerno – Renewable diesel RENEWABLE RAW MATERIAL 100 % CO2 EMISSIONS (VS. FOSSIL FUEL) –80 % COMPATIBLE WITH DIESEL VEHICLES 100 % 17 | © UPM UPM BIOFUELS Sustainably Produced Renewable Diesel • Unique renewable diesel - Drop-in hydrocarbon - comparable to fossil fuel - Ready component for commercial blends - No blend wall limitations - Compatible with fossil diesel EN590 standard quality • Tested in engines & vehicles with independent research organizations (e.g. FEV & AVL ) - Fully compatible with current diesel engines and fuel distribution network - Tail pipe emission benefits (e.g. NOx,PM) Crude Tall Oil-Based Renewable Diesel as a Blending Component in Passenger Car Diesel Engines (Heuser B. et al. SAE Int. J. Fuels Lubr. 6(3):817-825, 2013, doi:10.4271/2013-01-2685. 18 | © UPM Fleet tests completed with VTT Technology Center of Finland • • • • • • Fleet testing with 20% UPM BioVerno renewable diesel with 4 Volkswagen cars 20.000 km/car Spring, summer, autumn and winter conditions Independent testing by experienced test drivers of Technical Research Centre of Finland (VTT) Investigating fuel functionality in engine, emissions and fuel consumption Functions as fossil diesel and reduction of emissions Crude Tall Oil-Based Renewable Diesel in Passenger Car Field Test, Laurikko et al. SAE Technical Paper 2014-012774, 2014, doi:10.4271/2014-01-2774. 19 | © UPM BioVerno fuel launched 6.5.2015 to St1 fuel stations
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