Sari Manonen

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UPM BIOFUELS

Biofuels from wood-based raw materials


European Technology Platform
Biofuels for Low Carbon Transport & Energy Security
15.10.2014, Brussels

Sari Mannonen, UPM Biofuels


UPM – The Biofore Company

UPM Biorefining UPM leads the integration of


bio and forest industries
UPM Energy into a new, sustainable and
innovation-driven future

UPM Raflatac
UU
• 21,000 employees
• Sales exceeds 10 billion euros
UPM Paper
UUAsia in 2013
- Production in 17 countries
- Worldwide sales network
UU
UPM Paper Europe
- Listed in the NASDAQ OMX
Helsinki stock exchange
UU
UPM Plywood • UPM Biofuels is a strategic
business unit of UPM Biorefining
2 | © UPM
Biofuels a key step on pulp and paper
industry's transformation path towards
biorefining industry

Pulp and paper industry today: Biorefining industry of tomorrow:


Relatively low value-adding products High value-adding products with all
mostly from primary raw materials materials, including residues, processed
Sawn timber
End users
Plywood

Paper Labels
Woody biomass Pulpwood and
• Logs recycled fibre Tissue Hygiene products
• Pulpwood
• Energy wood Packaging End users
• Recycled fibre
• Saw dust Biofibrils Biocomposites
• By-products Pulp
Pulp residues Biochemicals

Wood residues Biofuels

Energy End users

Current focus areas Future growth avenues


3 | © UPM
Wood raw material is the basis
of many different businesses at UPM

4 | © UPM
Sustainability is in the core of
our operations

• Wood is a renewable and recyclable


raw material
• Sustainable forest management
• Good forest management practices
• Environmentally and ecologically sound
harvesting
– State-of-the-art techniques
– Qualified personnel
– According to PEFC or FSC standard
– All UPM owned forests are certified
• Certified fibre to highest possible degree and
promote a global increase in the use of
certified wood
• Origin of all wood is known, legal and not
from high conservation value forests
• All wood supplies covered by
a third-party verified chain of custody

5 | © UPM
UPM Biofuels and latest
sustainability recognitions

UPM renewed its position as the industry leader in Dow


Jones Sustainability Indexes for 2014-2015

Award for Breakthrough Innovation in Technology in 2013

Shortlisted in Sustainability Product Innovation category in 2013

Winner in Travelling category 2014 awarded by European


Commission

Finalist in Sustainable Innovation category in the Leading


Technology Award 2014
6 | © UPM
UPM Biofuels strategy

• Drop-in fuels fully


Advanced biofuels compatible with current
vehicle engines

Wood-based raw • Renewable wood-based


raw materials not suitable
materials for food production

Sustainable • Significantly, even 80%, less


greenhouse gas emissions
operations

UPM will be a big player in advanced biofuels market


Revenue targeting > 1 billion €/a

7 | © UPM
First step:
UPM Lappeenranta
Biorefinery
UPM Lappeenranta Biorefinery
– commercial scale investment

Key facts:
• Product: Renewable diesel
• UPM investment: 150 M€
• Capacity: 100,000 tonnes/a
• UPM Patents & Applications: 150
• Commissioning: Summer 2014
• Employment: 200 persons
• Contributes approximately 25%
of Finland’s biofuel target
9 | © UPM
Raw material: Crude Tall Oil (CTO)

Residue of pulping process

No increase in harvesting or land use

Outside food value chain


• Contains natural extractives of wood
• Yield 20−50 kg CTO/t pulp
• Global production > 2 000 000 t/a
- CTO supply potential above demand
globally and increasing
- Significant share burned for energy
- Production potential 2 600 000 t/a
• UPM tapping into underutilized lower
grade CTO streams
• UPM biorefinery minor addition to total
demand, no effect on demand-supply
balance
10 | © UPM
Source: Ecofys:, Low ILUC assessment CTO, Pöyry
Crude Tall Oil (CTO) – a residue of pulp
making process

11 | © UPM
UPM renewable diesel process

12 | © UPM
Capturing synergies by full integration into
UPM Kaukas mill site in Lappeenranta,
Finland

1 RESEARCH CENTRE 3 BIOMASS POWER PLANT 5 SAW MILL


2 BIOREFINERY 4 PULP MILL 6 PAPER MILL

3 5

13 | © UPM Public 07.10.2014


UPM Lappeenranta biorefinery, Finland

14 | © UPM
UPM BioVerno – Renewable drop-in diesel
suitable for all diesel engines

RENEWABLE
RAW MATERIAL

100 %
CO2 EMISSIONS
(VS. FOSSIL FUEL)

–80 %
HYDROCARBON FUEL,
COMPATIBLE WITH
DIESEL STANDARD EN590

100 %
15 | © UPM
Long term fleet tests completed with VTT

• Fleet testing with 20% UPM BioVerno


renewable diesel with 4 Volkswagen cars
• 20.000 km/car
• Summer and winter conditions, various
distances
• Independent testing by experienced test
drivers of Technical Research Centre of
Finland (VTT)
• Investigating fuel functionality in engine,
emissions and fuel consumption

• Functions as fossil diesel

• Phase 2: heavy duty vehicles test (busses)

16 | © UPM
UPM Biofuels
Growth Strategy and
Competitive Edge
UPM Biofuels growth strategy

ENTERING HYDROTREATMENT
BUSINESS Tall oil UPM Lappeenranta Biorefinery start-up 2014

EXPANDING THERMAL CONVERSION


BUSINESS Solid wood materials Gasification (BtL) /Pyrolysis

FUTURE DEVELOPMENT
GROWTH OF New technologies, processes & raw materials
BUSINESS
R&D activities & co-operation with strategic partners

Products are drop-in hydrocarbons – Ready components for commercial blends


18 | © UPM
UPM is in an excellent competitive position to
integrate processes for new bioproducts

Three areas of competence bring UPM in the position to become the


frontrunner in new biomass based innovations
1) Access, management 2) Processes of biomass 3) Run sustainably large
and sourcing of biomass conversion industrial processes

Biomass Chemical
handling processes
• Debarking • Kraft pulping
• Saw mills • Renewable
• Mechanical diesel
pulping production

Bioenergy &
Infrastructure
• Biomass boilers
• CHP
• Water treatment

core competences of chemical companies

19 | © UPM
UPM's competitive edge in biofuels

Competitive Efficient High quality


raw-material process product
• Part of the • Technology • 2nd
UPM based on UPM generation
ecosystem and partner’s hydrocarbons
• Optimise wood innovations & • Compatible
fractions to know-how with current
right products • Efficient use of fleet and
• Steady supply raw material standards
• Outside food • Integrate • 80% reduction
value chain synergies in greenhouse
• No indirect • Industrial gas emissions
land-use infrastructu • High energy
re content
change
• Energy
• Meets • No blend wall
sustainability limitations
criteria
20 | © UPM Public 07.10.2014
UPM BIOFUELS

Driver’s seat in
advanced biofuels

21 | © UPM

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