UPM to invest €550 million in Leuna biorefinery

UPM Group has announced they will be taking the next step in the biochemicals industry by investing in a €550 million biorefinery in Leuna, Germany.

This comes less than a year after the creation of UPM Biochemicals - the company's first foray into the industry in a bid to switch from raw fossil fuels to a more sustainable model.

Announced back in January, the plant is expected to be up and running by 2022. From then on, wood-based biochemicals will be extracted from sustainably-grown hardwood at the plant, making it possible to reduce both fossil fuel consumption and CO2 emissions in a variety of sectors.

The products will be used in textiles, plastics, rubber, cosmetics and medicines. UPM's wood-based solution can be used to replace oil, gas or coal-based materials and perform consistently well with existing infrastructure.

The factory's annual output is expected to be around 220,000 tonnes and the project has already been named "Bio Act of the Year" by the World BioEconomy Forum.

Saxony-Anhalt's Prime Minster Dr Reiner Haselhoff welcomed the news: “Saxony-Anhalt is increasingly developing into a state of future technologies. The investment makes a significant contribution to this. The construction of the biorefinery is a key investment for Leuna and Saxony-Anhalt. I thank the company for choosing Saxony-Anhalt. With its well-developed infrastructure, Leuna offers an attractive environment that is hard to imagine better. ”

Jyrki Ovaska, executive vice president for technology at UPM, said: "Today marks a new era for UPM’s biomolecular businesses. The biorefinery in Leuna will be the nucleus for an entirely new and high-value growth business and opens totally new markets for UPM with large growth potential for the future.

"Awareness of climate change has increased customer demand for sustainable alternatives to fossil-based products. UPM has committed to UN’s Global Compact’s Business Ambition for 1.5°C and constantly innovates more sustainable products from renewable raw materials. The biorefinery in Leuna opens new perspectives for UPM as well as the bio-economy as a whole.

“Our main aim is to create innovations for a future without fossil fuels. The investment in the biorefinery therefore marks a milestone in our corporate transformation that is far from over. But it is also a milestone for our innovation work. The technologies were developed by UPM – partly together with partners – and are now being brought to industrial maturity in Leuna.

“Particularly in the field of plastics, it must continue to be about avoiding unnecessary packaging and ensuring that the valuable materials end up in the recycling cycle and not in the environment.”

InfraLeuna, the operator of the machines and infrastructure at the plant is investing a further €100 million in new technology to supply the biorefinery.

The state of Saxony-Anhalt is actively supporting the company's expansion into the region, seeing it as a positive impact for local business and the move towards greener energies.

They have provided subsidies to the construction, totalling €20 million.

Prime Minister Haselhoff handed over the grant deed at the announcement ceremony on Monday joined with Economics Minster Professor Dr Armin Willingham.

Mr Haselhoff said: “The state of Saxony-Anhalt has kept its promise to support the Central German district with future technologies.”

Professor Willingham added: "With clever economic development, we are setting the course to develop Saxony-Anhalt into the state of future technologies."

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