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From Finland comes the largest single corporate investment we\u2019ve seen in years \u2014 UPM is taking\u00a0 it\u2019s \u201cnext transformative growth step\u201d and is investing in a biorefinery at Leuna, Germany to convert solid wood into next generation biochemicals: bio-monoethylene glycol, lignin-based renewable functional fillers, bio-monopropylene glycol and industrial sugars.<\/p>\n
UPM will invest \u20ac550 million ($611 million) in the industrial scale biorefinery\u00a0 The total annual capacity of the biorefinery will be 220,000 tonnes. The facility is scheduled to start up by the end of 2022.<\/p>\n
For those less familiar with the giants of the European pulp & paper industry, the Finland-based UPM is right at the top of the stack \u2014 the company\u2019s symbol, the griffin, perched atop many of the signature pulp & paper mills around the world.<\/p>\n
The UPM biochemical backstory
\nThe story didn\u2019t come out of nowhere. The company has been considering entering the biochemicals sector since the dawn of time, er, 2012.
\nWe reported in 2017 that UPM was evaluating the potential for building a biorefinery in the Chemical Park Frankfurt-H\u00f6chst in Germany. At the time, reports were that the biorefinery\u2019s annual production capacity would be 150 000 tonnes of bio-monoethylene glycol (bMEG), bio-monopropylene glycol (bMPG) and lignin. It would be based on the use of deciduous hardwoods grown in sustainably managed forests in Central Europe. At the time, it was thought that the decision would come in 12 months.<\/p>\n
Instead, we have a decision some 28 months later, with a site 320 kilometers to the northeast in Leuna, the volume has increased from 150,000 to 220,00 tonnes, and the application set has widened to include industrial sugars.<\/p>\n
The applications
\nThe potential uses for the bio-materials that such a facility would produce present exciting opportunities to replace fossil-based materials with renewable alternatives.<\/p>\n
Bio-monoethylene glycol has application in textiles, plastic bottles and packaging and deicing fluids.
\nBio-monopropylene glycol is used for example in composites, pharmaceuticals, cosmetics and detergents.
\nLignin can be used for example in wood resins, plastics or foams and coatings. Recently, UPM Plywood introduced the WISA BioBond gluing solution that replaces fossil-based phenol with lignin in plywood products.
\nThe shift to Leuna
\nIt\u2019s not a well-known town in some respects, buried in the state of Saxony-Anhalt in the south-east of Germany, off the tourist track unless you\u2019re headed to Prague, more or less.<\/p>\n
However, Leuna is a big deal in the world of chemicals, home to the sprawling Leunawerke, a chemical industry complexes which checks in, in total, at 13 square kilometer in size. It\u2019s so big you can clearly identify the complex from outer space. And, we might add, it\u2019s surrounded by forest areas.<\/p>\n
It really goes back to 2012
\nThere\u2019s one key word missing from the UPM release, and one website that\u2019s saying nothing about the good news out of UPM.<\/p>\n
It\u2019s Renmatix. Where are they in this story? Rewind from this year of the Tokyo Olympiad, to the London Olympiad year for a sec. That\u2019s when UPM and Renmatix first\u00a0 entered into a joint development agreement in the area of biochemicals.<\/p>\n
They had been effusive the one about the other.<\/p>\n
UPM and Renmatix \u2013 why they chose each other
\nPartnership strategy. \u201cPartnership is very important in this space and we kept our minds open in looking very broadly at the sector, and the companies. Michael Duetsch, Director of Biochemicals at UPM told the Digest in the past. In picking Renmatix, Duetsch noted the \u201cvery sound study\u201d conducted on technology providers, adding, \u201cand that effort continues.\u201d<\/p>\n
\u201cIn the end,\u201d he said, \u201cwhat was particularly outstanding for us in the process is that they are not using a lot of consumables. We are not a chemical company, so that is something we really like. It\u2019s an excellent process, and a very fast process.\u201d<\/p>\n
It\u2019s always important to have a cultural fit,\u201d said Duetsch. We trust each other, and in Renmatix we saw a very professional team, from Mike Hamilton right down through the organization to the technical team. They\u2019re very well managed.<\/p>\n
In going with UPM, Renmatix CEO Mike Hamilton noted that \u201cUPM has a very progressive strategy. They have been very progressive.They have put their capital into play to build assets. Their strategy, and that kind of commitment was a home run for us. Knowing UPM from our past lives, and knowing how they can leverage their existing sites, and knowing that they were looking for enabling partnerships with a licensing strategy, we were well aligned.\u201d<\/p>\n
So, who could it be, now?<\/p>\n
Perhaps Sekab. As Envertis\u2019 Frederic Clerc noted to the Digest, \u201cUPM has been working with Sekab in the past few years through H2020 R&D project such as\u00a0Valchem\u00a0\u2013 I suspect Sekab is more likely to be the technology provider instead of Renmatix.\u201d<\/p>\n
A ray of hope dashed in 2017
\nThere was heartache along the road to this project. The company, in fact, landed a a grant of \u20ac170M for a solid wood-based biorefinery (BTL) project in Strasbourg, France \u2014 under the EU\u2019s NER300 program (New Entrants Reserve), funded by the sale of emission allowances to European companies. The project languished.<\/p>\n
UPM\u2019s BioFore strategy and progress in biorefining
\nSome time before that, UPM had set out on an ambitious BioFore strategy with a clear goal of leveraging its strength in aggregation and processing of wood resources into a series of new ventures in biofuels as well as renewable chemicals.<\/p>\n
Impressively, and rarely for the cash-strapped pulp & paper sector, they had utilized their balance sheet in developing the world\u2019s first wood-based renewable diesel refinery in Lappeenranta, starting construction last summer. UPM\u2019s Lappeenranta biorefinery, constructed without any public funding, will produce diesel out of crude tall oil, a residue of pulp production. The process is based on hydrotreatment and production will start in summer 2014 \u2014 initial capacity in the sub-10 million gallon range but with a potential capacity to expand out to 55 million gallons per year.<\/p>\n
Chemicals vs fuels
\nRenewable chemicals are part of UPM\u2019s BioFore strategy \u2014 not wholly unexpected, though the fast-tracking of the foray into chemicals has caused surprise. One critical component was to establish a source of renewable sugars \u2014 and, in stealth mode over more than a year, UPM chewed through a lengthy evaluation process for a technology partner, and ultimately selected supercritical technology and tapped Renmatix as the partner.<\/p>\n
What is supercritical again?
\nFor those used to the three traditional phases of water \u2014 solid, liquid and gas \u2014 add a fourth, the supercritical phase, seen under unusual conditions of pressure and temperature (think 250 atmospheres and around 373C \u2013 conditions never seen outside of a closed technology on Earth but which you might find deep in Jupiter\u2019s clouds).<\/p>\n
Under those conditions, water can diffuse like a gas and dissolve like a liquid, and act simultaneously like an acid and a base. It can depolymerize biomass by acting as both a powerful solvent and catalyst, creating rapid reactions.<\/p>\n
<\/p>\n
Supercritical \u2013 a video primer
\nProfessor Martyn Poliakoff demonstrates supercritical fluids in his office at the University of Nottingham.<\/p>\n
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