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Setra and Preem first in Europe with renewable fuel from sawdust

In Sweden, wood products major Setra Group and oil refiner and renewable fuel producer Preem AB have given the go-ahead for the joint venture company Pyrocell AB to invest in a pyrolysis oil plant at Setra's Kastet sawmill outside Gävle, Sweden.
"It is hugely gratifying that we together can make an important contribution to the renewable transition, says Setra's CEO Hannele Arvonen and Preem's CEO Petter Holland in a joint statement.

Petter Holland, CEO, Preem and Hannele Arvonen, CEO, Setra Group have agreed to collaborate on the pyrolysis oil production facility being planned at Setra’s Kastet sawmill in Gävle, Sweden (photo Sten Jansin).

First announced in June 2018, the new plant will be built adjacent to Setra’s sawmill in Kastet and will produce pyrolysis oil using sawdust as feedstock. The plant is expected to be operational by the end of 2021 and will produce pyrolysis oil that will be used as a renewable biocrude feedstock in the production of biofuels at Preem’s refinery in Lysekil.

Our strategy is to increase the value and climate benefit of our products. Making biofuels from sawdust is completely in line with that, remarked Hannele Arvonen, CEO, Setra.

Construction is expected to begin during 2019 and the plant is expected to provide about 30 000 tonnes of pyrolysis oil per annum. The plant will be operated in the jointly owned company Pyrocell.

Sweden has unique opportunities to increase domestic production of renewable fuels. Now we are starting Europe’s first commercial production plant of pyrolysis oil for biofuels. Thus, we take further steps forward in our vision to lead the transformation into a sustainable society, said Petter Holland, CEO of Preem.

Setra has pushed its pyrolysis oil project with a view to finding a commercial offtake partner. In June 2017, Setra received SEK 117 million in funding from the Swedish government’s “Climate Step” programme to build a pyrolysis oil plant, which has now created the opportunity to establish a commercially viable value chain between sawmills and the refinery industry.

We have always strongly believed in the idea of ​​refining sawdust into biofuels. Therefore, we are very pleased that Preem has now also agreed to our joint venture, said Pontus Friberg, Project Owner, and Chairman of Pyrocell.

In June last year, the company Pyrocell was formed, which is jointly owned to the same extent by Preem and Setra. In the future, there may be more production facilities for pyrolysis oil at Setra’s sawmill.

The transport sector is facing a huge transformation. By 2030, transport emissions should have decreased by 70 percent, according to the national targets. Large quantities of renewable fuels are required, and pyrolysis oil from sawdust is an excellent raw material to meet the growing demand for renewable energy. It is available in large quantities and has good sustainability properties, said Sören Eriksson, Development Engineer and Board Member of Pyrocell.

The collaboration with Setra is part of Preem’s ambition to produce 3 million m3 of renewable fuels per annum at is refineries in Lysekil and Gothenburg by 2030.

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