Preem and Sveaskog take stake in SunCarbon - plans for a lignin oil plant
In Sweden, the country's largest oil refiner and fuel retailer Preem AB and Sveaskog AB, the state-owned forestry company and timberlands owner have announced that they have become shareholders in SunCarbon AB. Furthermore, that SunCarbon is planning to build a lignin oil plant for biofuels, which if executed, would be operational in early 2022 and produce about 45 000 tonnes of lignin oil per annum. It would be the second lignin to biofuels plant in Sweden that Preem has a stake in.
Owned by KIRAM AB, Arkell Innovations AB, Hulteberg’s Chemistry & Engineering AB and now Sveaskog AB, and Preem, SunCarbon AB is a Swedish technology developer that has developed a process to convert lignin, a by-product of the pulping process, into a depolymerized lignin-rich refinery-ready biocrude oil.
Lignin can be refined for both renewable diesel and renewable gasoline and can be used in all vehicles. Lignin, like tall oil, will help us phase out the fossil fuels and at the same time reduce carbon dioxide emissions in the transport sector. It is a valuable raw material in our investments in more renewable fuels based on residual products from the forest, which is also available in large volumes, said Petter Holland, CEO of Preem.
85 percent of all biofuels on the Swedish market are imported. With increased utilization of lignin in biofuels, this figure can be reduced considerably. The biofuels potential of lignin is estimated at about a few million m3 just in Sweden.
Preem’s ambition is to produce 3 million m3 of renewable fuel in 2030. This corresponds to the total volume of fuel that Preem sells on the Swedish market today. The value or size of its stake in SunCarbon has not been disclosed.
We have an aggressive investment plan for Sweden with several different production plants in the planning phase. But in order for the investments to become reality, the right incentives are required for increased domestic production of sustainable bio-raw materials. Long-term policy rules are required, coherence within the reduction obligation system, cautioned Petter Holland.
Preem has numerous collaborations with existing and potential biocrude and biofuel producers using by-products from the forest industry. One such collaboration using lignin is with RenFuel AB and forest industry major Rottneros AB is looking to build a lignin plant for biofuels at Rottneros pulp mill subsidiary Vallviks Bruk AB in Söderhamn. This plant is expected to produce about 25-30 000 tonnes of “Lignol” annually and be completed by 2021.
As Sweden’s largest forest owner and state-owned, Sveaskog says that it has a “responsibility to be a pioneer and an example in sustainable business and in the development of innovations based on the Swedish forest.” With this ambition, Sveaskog has since 2014 cooperated with SunCarbon AB and now acquires one-third of the shares in the company for an undisclosed amount.
Our most important task is to take care of the forest so that it can continue to create societal and climate values, but also to ensure that the forest has an important role in our future society. Through this investment, we contribute to the forest and residual products from forestry and industry being given a central role in the phasing out of fossil products in our society, said Per-Olof Wedin, President, and CEO of Sveaskog.
According to Sveaskog, SunCarbon’s process for extracting and refining lignin into high-grade lignin oil is unique. The lignin oil is of very high quality and purity that it can thus be used in demanding applications such as biofuels, other petrochemical products, fine chemicals or various materials.
SunCarbon’s technology means that the pulp mill receives a new revenue stream from the lignin oil, but in addition it can increase the production of cellulose, which helps to strengthen the mill’s profitability and competitiveness, thereby also contributing to increasing the use and value of the wood, said Jan Wintzell, Head of Business Development and Innovation at Sveaskog.
SunCarbon’s technology and process for the extraction of lignin oil is unique and, according to Sveaskog, it has the following benefits:
- A complete process where both the extraction and refinement of lignin into lignin oil takes place in a process that is integrated with pulp;
- A technology and process that is fully compatible with the pulp mill’s processes, with minimal impact on the chemical balance at the mill;
- Lignin oil with a very high technical quality, purity and durability performance that can withstand demanding applications; both in refinery products and fine chemicals and materials;
- A cost-competitive production and lignin oil product making SunCarbon’s technology commercially attractive.