SCA and St1 enter joint venture to produce and develop liquid biofuels

Source: press release, 20 September 2021

President and CEO of SCA, Ulf Larsson
President and CEO of SCA, Ulf Larsson (photo: SCA)

SCA and St1 have entered a joint venture to produce and sell liquid biofuels. SCA will supply tall oil to the joint venture and will invest approximately SEK 0.6 billion in the company. SCA and St1 will be equal shareholders of the joint venture, which will itself have a 50% share in the St1 Gothenburg Biorefinery, which is now making an investment in a biorefinery with total capacity of 200,000 tonnes of liquid biofuels, estimated to a total investment cost of SEK 2.5 billion. The new biorefinery will be operational in Q2 2023.

“Partnership with SCA is a key element in the implementation of our renewable fuels investment program and it secures the supply of renewable feedstock materials to meet the ambitious Nordic climate targets for 2030,” says Henrikki Talvitie, CEO of St1 Nordic Oy.

“In line with our communicated long-term strategy, we will now with the joint venture with St1 go from being a supplier of tall oil to the chemical and fuel industries to becoming active in the further refining of our renewable raw materials,” says Ulf Larsson, President and CEO of SCA. “We will continue to develop the business potential of the renewable by-products we have from our forests and industries in order to further develop our value chain and to contribute to the EU’s ambitious climate strategy.”

The new biorefinery is under construction on the St1 refinery site in Gothenburg and will have a total capacity of 200,000 tonnes of liquid biofuels. It is designed to optimise production of renewable fuels such as HVO and jet fuel and to use tall oil-based feedstock. The joint venture will have access to SCA’s tall oil, a by-product from the kraft pulp production at SCA’s mills in Östrand, Obbola and Munksund. The biorefinery will also be capable of using a wide range of other feedstocks and is expected to be operational in Q2 2023.

As part of the agreement, St1 also becomes a 50% owner of SCA Östrand Biorefinery. The Östrand biorefinery project has recently received environmental permits for the production of 300,000 tonnes of liquid biofuels based on black liquor (a by-product from kraft pulp production) and solid biomass (such as sawdust or bark). The biorefinery in Östrand is a development project where a number of technological challenges remain to be solved before a project design can be finalised.