The FINANCIAL — NIB and the Finnish forest industry company UPM-Kymmene Oyj have signed a 10-year loan agreement for EUR 200 million for financing the construction of a biorefinery producing wood-based biochemicals in Leuna, Germany, that will provide bio-based sustainable alternatives for fossil resources.
The loan co-finances UPM’s EUR 550 million investment in an industrial scale biorefinery that opens biochemicals markets for UPM with large growth potential for the future. The UPM Leuna biorefinery will produce a range of 100% wood-based biochemicals, which offer renewable and sustainable alternatives in various consumer-driven end-uses. These alternatives are at the core of innovating a future beyond fossil resources and needed in order to mitigate the effects of climate change.
Wood is a renewable raw material that the new biorefinery will convert into next generation biochemicals: bio-monoethylene glycol (BioMEG) and lignin-based renewable functional fillers. Lignin-based fillers are used in different rubber applications as sustainable alternatives to carbon black and silica. The carbon footprint of these biochemical products is significantly lower than that of the corresponding conventional chemical products. Wood biomass will be sourced from sustainably managed forests.
“The increasing demand for sustainable chemicals goes hand in hand with the battle against climate change. Wood-based products can be used to replace fossil materials in various consumer goods and industrial products, which supports the transition to a bio-based, circular economy and helps to reduce pollution”, says Henrik Normann, NIB President & CEO.
“We are truly excited to provide the customers world-class sustainable solutions. The investment opens totally new markets for UPM with large growth potential for the future. The facility is scheduled to start up by the end of 2022. The biochemicals business is the result of consistent research, which was partly carried out at UPM’s R&D facility in Lappeenranta, Finland,” says Juuso Konttinen, Vice President of UPM Biochemicals.
UPM-Kymmene Oyj is a Finnish forest industry company and one of the world’s leading manufacturers of graphic papers that also produces pulp, label materials, specialty papers, renewable diesel and naphtha as well as plywood and sawn timber. Molecular bioproducts form one of UPM’s three strategic areas for growth. The company employs around 18,349 people and has production plants in twelve countries. UPM is listed on NASDAQ OMX Helsinki.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.