Norske Skog to invest $35.9 million to produce biofuels from wood
Norwegian paper manufacturer Norske Skog announces it will, in cooperation with forest owners cooperatives, establish a joint venture to develop and produce next-generation wood-based biofuels. A prototype facility for biodiesel will be built at its Follum mill in Hønefoss. The single plant will produce between 4 and 6 per cent of Norway's total diesel fuel consumption.
The new the company will be jointly owned by Norske Skog (60 per cent) and the forest owner cooperatives (40 per cent), and will be established with equity of NOK 30 million (€3.7 / US$5.4 million).
Norske Skog aims to establish full-scale biodiesel production, even though it is not clear yet which bioconversion pathway will be utilized. Wood-based biodiesel can be produced from either a biomass-to-liquids (BtL) process in which biomass (including black liquor) is gasified and then liquefied via Fischer-Tropsch synthesis to yield synthetic biofuels that can be refined into diesel; alternatively, a fast-pyrolysis process yielding bio-oil could be utilized, with the bio-oil refined into diesel.
Last year Norske Skog and Hydro, the Norwegian energy company, agreed to carry out a joint feasibility study relating to the production of synthetic diesel from wood via gasification and Fischer-Tropsch processing, which is why it can be assumed this pathway will be chosen. Synthetic biodiesel is an ultra-clean fuel superior to first-generation biodiesel with respect to CO2, SOx and NOx emissions.
Norske Skog's announced plant will require 1-1.5 million cubic meter of wood per year and will produce 65 000 - 100 000 tonnes of biodiesel, corresponding to 4-6 per cent of Norway's overall consumption of diesel in the transport sector. The long-term objective is to develop a global enterprise in biodiesel production and sale.
The investment in a prototype for biodiesel production at Follum is estimated at NOK 100 - 200 million (€12.5-24.9 / US$17.9-35.9). Further capitalisation will be decided at a later date.
Forest owners already have 15 percent stake in Norske Skog. However, the company has felt a need to diversify its activities and to specialize, with some suggesting the firm should be split up according to geographic or business areas:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: biodiesel :: fast-pyrolysis :: wood :: forestry :: gasification :: Fischer-Tropsch ::
The chairman of the Forest Owners Union, Helge Evju, recently told reporters that they were united in opposing these plans.
A triumvirate of Norwegian business tycoons, Petter A. Stordalen, Øystein Stray Spetalen and Ove Gusevik have recently acquired a 5.78 share of Norske Skog through their company Unionen, and have floated a number of ideas to rejuvenate the Norwegian paper giant. The entry into the biofuels sector is one of those plans:
Norske Skog is a world leading producer of newsprint and magazine paper, with 18 paper mills around the world. The world market for newsprint and magazine paper is about 60 million tonnes, and the group has about 10 per cent and 5 per cent of these segments respectively. The group's operating revenue in 2006 was approximately NOK 29 billion (€3.6/US$5.2 bn).
References:
Norsky Skog: Norske Skog makes forward-looking investment in timber-based biofuel - December 21, 2007.
Hydro: Hydro and Norske Skog: joint biodiesel study - May 26, 2007.
The new the company will be jointly owned by Norske Skog (60 per cent) and the forest owner cooperatives (40 per cent), and will be established with equity of NOK 30 million (€3.7 / US$5.4 million).
Norske Skog aims to establish full-scale biodiesel production, even though it is not clear yet which bioconversion pathway will be utilized. Wood-based biodiesel can be produced from either a biomass-to-liquids (BtL) process in which biomass (including black liquor) is gasified and then liquefied via Fischer-Tropsch synthesis to yield synthetic biofuels that can be refined into diesel; alternatively, a fast-pyrolysis process yielding bio-oil could be utilized, with the bio-oil refined into diesel.
Last year Norske Skog and Hydro, the Norwegian energy company, agreed to carry out a joint feasibility study relating to the production of synthetic diesel from wood via gasification and Fischer-Tropsch processing, which is why it can be assumed this pathway will be chosen. Synthetic biodiesel is an ultra-clean fuel superior to first-generation biodiesel with respect to CO2, SOx and NOx emissions.
Norske Skog's announced plant will require 1-1.5 million cubic meter of wood per year and will produce 65 000 - 100 000 tonnes of biodiesel, corresponding to 4-6 per cent of Norway's overall consumption of diesel in the transport sector. The long-term objective is to develop a global enterprise in biodiesel production and sale.
The investment in a prototype for biodiesel production at Follum is estimated at NOK 100 - 200 million (€12.5-24.9 / US$17.9-35.9). Further capitalisation will be decided at a later date.
Forest owners already have 15 percent stake in Norske Skog. However, the company has felt a need to diversify its activities and to specialize, with some suggesting the firm should be split up according to geographic or business areas:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: biodiesel :: fast-pyrolysis :: wood :: forestry :: gasification :: Fischer-Tropsch ::
The chairman of the Forest Owners Union, Helge Evju, recently told reporters that they were united in opposing these plans.
A triumvirate of Norwegian business tycoons, Petter A. Stordalen, Øystein Stray Spetalen and Ove Gusevik have recently acquired a 5.78 share of Norske Skog through their company Unionen, and have floated a number of ideas to rejuvenate the Norwegian paper giant. The entry into the biofuels sector is one of those plans:
I consider this a very exciting and future-oriented project which will open up new opportunities for Norske Skog. We have processing industry competence and a good infrastructure at Norske Skog Follum. In addition, the mill has a central location with good access to wood. - Christian Rynning-Tønnesen, chief executiveThe agreement is subject to approval by the board of directors of the companies involved.
Norske Skog is a world leading producer of newsprint and magazine paper, with 18 paper mills around the world. The world market for newsprint and magazine paper is about 60 million tonnes, and the group has about 10 per cent and 5 per cent of these segments respectively. The group's operating revenue in 2006 was approximately NOK 29 billion (€3.6/US$5.2 bn).
References:
Norsky Skog: Norske Skog makes forward-looking investment in timber-based biofuel - December 21, 2007.
Hydro: Hydro and Norske Skog: joint biodiesel study - May 26, 2007.
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