Press releases

Major Regional Investment in Lieksa

22.03.2019

Major Regional Investment in Lieksa

Biorefinery investments will bring as many as hundreds of new jobs to the subregion.

The Lieksa biofuel production plant will soon be a reality after years of planning. The project managed by Green Fuel Nordic Oy has now amassed the required funding, and the company's board of directors has made the decision to order the construction of the plant.

The first phase of the investment is worth approximately 25 million euros, and is expected to bring approximately a hundred new jobs, including indirect employment, to the Lieksa area. Future plans involve gradually building additional production units, which is expected to increase the total employment effects to several hundred new jobs.

This is a significant opening and an all-new operating procedure, in which forest-based renewable raw materials from the vicinity of the production unit are refined into high-quality biofuel. The plant operates using pyrolysis, and the raw material it uses comprises effluents from the forestry industry — including sawdust from saw mills, and crown trunks — which would otherwise be considered hazardous waste. In addition, trees from first thinning are an optimal source of raw material.

The Lieksa plant will be ordered from the Netherlands. According to the plans, commercial operation can commence in the year 2020.

Unique production technology

The project is unique, with such revolutionary production technology never before seen in Finland. The plant project is backed by well-known North Karelia-based venture capitalists — Joensuun Kauppa ja Kone Oy, represented by Kyösti Kakkonen (with an ownership share of 29.9%); Deeputi Oy, represented by Matti Virtaala (approx. 18%), and Arto Hartikainen (approx. 18%)

The total ownership and guarantor liability amount of these majority shareholders is approximated at 10 million euros. In addition, the North Karelia ELY Centre is funding the construction with a contribution of 7 million euros.

"Without the venture capital from strong regional operators, the Lieksa plant might never have seen the light of day, or certainly it would not have happened until years later. This is the investors' concrete investment in the wellbeing of Northern Karelia," states the grateful Green Fuel Nordic Oy CEO Timo Saarelainen. Saarelainen is also involved in an ownership role with a share of approximately 11 percent.

Fully renewable and carbon neutral

The biomass used as raw material by the Lieksa biofuel production plant is 100 percent renewable and fully carbon neutral.

"This is our company's way to help increase the use of renewable energy and reduce CO2 emissions. We want to set an example, and we strongly believe there is plenty of need and space for new similar projects," states commercial advisor Kyösti Kakkonen.

According to Kakkonen, Virtaala and Hartikainen, the main factor for their involvement in addition to increasing the use of renewable energy is that the production plant enables supporting local forest owners by introducing an all-new market for the use of wood.

“This is just the beginning”

Wood-based bio-oil can be used for heating and transport fuel in place of light fuel oil, as well as raw material in e.g. chemistry and plastics.

"This is just the beginning, and wood-based bio-oil essentially offers infinite opportunities. This industry is at the very beginning of its life," adds industry advisor Matias Virtaala.

The more diverse utilisation of forests also creates the need for all-new innovations for wood gathering and storage.

"For us forest owners, this opens up a new way to make commercial use of surplus wood from logging, and I expect the value of responsibly maintained and utilised forests to grow in the future," says Arto Hartikainen, best known as the CEO of E.Hartikainen Oy.

Boosting the development of the entire Lieksa

Lieksa city manager Jarkko Määttänen is extremely pleased about the confirmation of the Green Fuel Nordic investment, which follows other bioindustry expansion investments in the Kevätniemi area.

"The significant Green Fuel Nordic investment creates not only jobs, but opportunities for new businesses to rise up and grow, and we believe a more extensive bioindustry and forestry hub will develop in the Kevätniemi area in the future," states Määttänen.

The city of Lieksa has invested a total of approximately 2.8 million euros in the development of the biorefinery and terminal area, partially through EU project funding.

"The bioterminal operator has already been chosen, and it will begin operation in the summer," says Lieksan Kehitys Oy LieKe CEO Susanna Saastamoinen.

The city of Lieksa will continue the completion work in the area in the early summer, with the asphalting of the bioterminal and the construction of the Talttatie road leading to the area. An industrial spur line is also planned for the area.

"On behalf of the city of Lieksa, we want to offer our heartfelt thanks to all parties that have played a role in realising the investment in Lieksa", states city manager Määttänen.

In addition to the funding, legislation changes regarding the blending mandate also impacted the confirmation of the investment. Member of Parliament Hannu Hoskonen (Centre) played a crucial role in achieving this.

"We investors want to thank Juha Sipilä's environmentally responsible legislation which has been a true patriotic eco-act. Along with Hoskonen, special thanks for contributing to the cause must go to Minister of Economic Affairs Mika Lintilä", says Kyösti Kakkonen.

Raw material also provides energy for the process

In the pyrolysis procedure, wood is heated using sand in an unoxygenated environment to roughly 500 degrees, and is vaporised as a result. The gas produced in the process is cooled down, resulting in liquid bio-oil and ash as end products. The ash can be used, for example, as fertiliser in forests.

The raw material fed into the plant also partially works as an energy source for the production process, so no energy other than electricity is required in normal operation.

More information:

Timo Saarelainen 040 7076640

Matti Virtaala 050 550 7313

Kyösti Kakkonen 050 65222

Arto Hartikainen  050 387 1800

Jarkko Määttänen 040 104 4001

Susanna Saastamoinen 040 104 4009

Act on promoting the use of biofuels (in Finnish):

https://www.eduskunta.fi/FI/vaski/KasittelytiedotValtiopaivaasia/Sivut/HE_199+2018.aspx

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