Fortum, UPM and Valmet are jointly developing technology to produce advanced biomass based fuels


Fortum, UPM and Valmet have joined forces to develop a new, winning technology
to produce advanced high value lignocellulosic fuels, such as transportation
fuels or higher value bio liquids. The idea is to develop catalytic pyrolysis
technology for upgrading bio-oil and commercialise the solution.

According to several studies pyrolysis technology is seen as the most
competitive route to produce advanced lignocellulosic biofuels, and is one of
the most efficient routes for meeting EU2020 greenhouse gas emission reduction

The five-year project is called LignoCat (lignocellulosic fuels by catalytic
pyrolysis). The project is a natural continuation of the consortium’s earlier
bio-oil project together with the VTT Technical Research Centre of Finland,
commercialising integrated pyrolysis technology for production of sustainable
bio-oil for replacement of heating oil in industrial use.

In this project, the consortium aims higher and the target is to develop novel
integrated technology to produce high value biofuels to replace fossil
transportation fuels, and thereby create new business for the consortium

“We will develop pyrolysis technology enabling improvement of bio-oil quality
compatible for further refining to transportation fuels or intermediate
products. This is a business opportunity for us, which will lead to new
sustainable processes and products. We see a great potential in this project
and look forward to continued cooperation,” says Jussi Mäntyniemi, Director,
Technology and R&D, Valmet.

Successful project execution will help utilities and the forest industry sector
in making investment decisions for entering advanced biofuel production.

UPM’s knowledge of biofuels plays a key role in the project. “Our aim is to
become a significant advanced biofuel producer. In accordance with our
strategy, we will start production in Lappeenranta with crude tall oil residue
as a raw material, and simultaneously we are looking for ways of producing
biofuels out of solid wood biomass. Catalytic pyrolysis is one of the promising
options we are looking into,” says Petri Kukkonen, Vice President, UPM
New technologies based on integration enable energy efficient production of
advanced biofuels and is a way to maximise the value of Nordic biomass.

"Fortum is eager to continue this work towards higher value bio liquids based
on the former successful co-operation with our R&D partners. This project is a
straight continuation to our first CHP (Combined Heat and Power) -integrated
bio oil investment in Joensuu and supports perfectly our strategy to increase
total efficiency and value of our fleet of CHPs. The project's scope opens us
the possibility to explore interesting new business opportunities and to define
our role in the production chain of advanced biofuels", says Jukka Heiskanen,
Head of R&D at Fortum's Heat business.

The LignoCat project is funded by Tekes – the Finnish Funding Agency for
Technology and Innovation. The outcome, when successful, will be a new
sustainable product on the market. It will significantly reduce CO2 emissions
in the transportation and heating sectors, and thus help in achieving national
and international targets in greenhouse gas emission reduction. The project
will create a knowledge cluster within biorefining for universities, research
centres and consortium partners.
In addition to employment opportunities, final products will have a positive
impact on the Finnish and European trade balance as the target market for
second generation transportation fuels by 2020 is 10 million tonnes per year.

Fortum Corporation
Corporate Communications

Further information:

Jukka Heiskanen, Head of R&D, Fortum Heat business tel. +358 10 452 4250
Petri Kukkonen, Vice President, Biofuels, UPM, tel. +358 204 15 0336
Jussi Mäntyniemi, Director, Technology and R&D, Valmet, tel. +358 40 769 8154

Fortum’s purpose is to create energy that improves life for present and future
generations. Catering to the versatile needs of our customers, we generate,
distribute and sell electricity and heat, and offer related expert services.
Our operations focus on the Nordic and Baltic countries, Russia and Poland. In
2013, Fortum’s sales totalled EUR 6.1 billion and comparable operating profit
was EUR 1.6 billion. We employ approximately 9,900 people. Fortum’s shares are
traded on the NASDAQ OMX Helsinki.

Through the renewing of the bio and forest industries, UPM is building a
sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM
Raflatac, UPM Paper Asia, UPM Paper Europe and North America and Plywood. UPM
products are made of renewable raw materials and are recyclable. The business
serves customers worldwide. The group employs around 21,000 people and its
annual sales are approximately € 10 billion. UPM shares are listed on NASDAQ
OMX Helsinki. UPM – The Biofore Company –

Valmet Corporation is a leading global developer and supplier of services and
technologies for the pulp, paper and energy industries. Our 11,000
professionals around the world work close to our customers and are committed to
moving our customers’ performance forward – every day. Valmet’s net sales in
2013 were approximately EUR 2.6 billion. Valmet’s head office is in Espoo,
Finland and its shares are listed on the NASDAQ OMX Helsinki Ltd.