Story | 01/14/2021 12:09:22 | 5 min Read time

The new era of biochemicals

Wood-based biochemicals are renewable, recyclable, can shorten supply chains and boost local production. And they can be used to make almost anything.

The future of wood is here. Soon all kinds of products – from bottles to de-icer to tyres – will be made from wood-based biochemicals, ushering in a new era of sustainability.

UPM invests in next generation biochemicals to drive a switch from fossil raw materials to sustainable solutions

It’s not a new idea. For years, if not decades, there has been discussion about how wood-based products could replace things made from fossil materials. Until now, this idea was mostly hypothetical. Now it is really happening.

“I am very excited,” says Juuso Konttinen, Vice President, Biochemicals at UPM. “We have worked for many years to evaluate and develop different technologies for wood-based biochemicals, and it is absolutely fantastic that all our hard work is paying off.”

In early 2020, UPM announced a new biorefinery to be built at Leuna, Germany. The biorefinery will produce a range of wood-based biochemicals that can replace fossil raw materials. This is not a simple lab to showcase the possibilities of biochemicals; this is a major plant with a price tag of more than EUR 500 million and with an anticipated annual capacity of 220,000 tonnes. The next phase of sustainable biochemicals has well and truly arrived.

The construction of UPM’s innovative biochemicals facility starts in Germany

Huge sustainability benefits

“Look around you. Chemicals are in practically everything you can see: the paint on the wall, the carpet on the floor and the plastic in your mobile phone,” says Michael Duetsch, Vice President, Biochemicals Business at UPM.

Today 80–90% of these chemicals are fossil-based. If we replace them with chemicals based on biomass, we will have a more sustainable future.

The advantage of wood-based biochemicals is that they are better for the environment. Wood is a recyclable and renewable resource that can store carbon in the material. It will play a key role in moving the world into a carbon-neutral circular economy.

Additionally, wood-based biochemicals can shorten supply chains and boost a regional economy. Fossil fuels might be shipped halfway around the world, but wood can be produced and used locally, helping those who live and work nearby and reducing both the financial and environmental costs of transportation.

“The Leuna plant will use hardwood trees which are native to Germany,” Duetsch says. “It is good that we have more industrial applications for native hardwoods instead of using non-local softwoods. These natural hardwood forests will be more climate-stable and can help biodiversity.”

An easy replacement

The Leuna plant will convert wood into the next generation of biochemicals. Renewable glycols will go into bottles, packaging, textiles, cosmetics and detergents. Lignin will be used in adhesives and bioplastics. Wood-based functional fillers will go into rubber tyres and thermoplastics. These biochemicals have a huge number of potential industrial and consumer applications.

Lignin is here to stay

“It is important that our customers don’t need to make changes to their existing value chains, such as their production and recycling,” Konttinen continues. “There is no burden to switch from fossil- based materials to wood-based materials. The new biochemicals fit in their existing processes, but with sustainability built in.”

Sustainability is the main draw for these new biochemicals. They will initially be a premium product, but a good example of the potential in their future growth might be renewable energy. Not too long ago, solar and wind power were chosen only for their environmental credentials, but today they are often cheaper than energy produced from coal or oil. Could wood-based biochemicals become more cost-efficient than their oil-based alternatives?

“It’s possible. Costs should come down in the future,” Konttinen says. “We are constantly optimising our systems and developing different technologies which will make these materials more economical.”

A new era for UPM

This new era of biochemicals is also a new era for UPM. The customers who want biochemicals are not the same customers who want paper or timber. This requires much more than simply building a new plant.

“We are not just building a new factory,” explains Konttinen. “We are building a new organisation, new business processes, new systems and competences, all to serve these new customers better.”

Molecular bioproducts are one of UPM’s three spearheads for growth. They have already led to a profitable biofuel business and are now forming the new biochemicals business. The other two spearheads are speciality packaging materials and high-value fibre products. Together, the three provide the potential for sustainable growth long into the future.

“This is a challenge, because this is new to us and new to the world. No one has done this before and there is no playbook,” Konttinen says. “We have to develop all these new technologies and systems.”

Yet this is no longer a daydream. Work on the Leuna plant has started and the new era of biochemicals has begun.

“The plant is expected to start up by the end of 2022,” Duetsch says. “During 2023 you could be holding a bottle which came from our biochemicals and we are starting to help to improve sustainability in many other different products as well.”

Read more about our biochemicals project in Germany

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