Finnish circular economy — wood turns to diesel and perfume

(Blog, Sari Mannonen, 4.5.2017) Wood is a valuable raw material, and efforts have been made to ensure that every fibre is utilized as thoroughly as possible. These days, natural resources are used in the Finnish forest industry with a high level of efficiently and responsibility — so less can be used for more. In a circular economy, the production and consumption produce as little waste as possible.



Throughout the industry, side streams, residue and waste should be viewed as business opportunities, not as problems. For some, waste can represent a valuable raw material or energy source. In order to continue utilizing one of our most important natural resources wisely in the future, we need to develop new, wood-based products and find new uses for wood waste as well as for different waste components from production processes. We need to see the forest for the trees.

Year after year, a tree growing in a forest absorbs a massive amount of carbon dioxide and produces a great deal of oxygen. When trees are harvested responsibly, tens of millions of new seedlings are planted simultaneously each year. This is one aspect of responsible forestry.

When a tree is harvested from a forest, the best part of it becomes high-quality sawn timber for wood construction and is transformed into a wooden house or a piece of furniture, for further absorption of carbon dioxide. The rest is used to produce pulp and—eventually—paper. This process creates a huge amount of renewable energy that we can utilize, as well as energy for the electrical grid.

A perfect example of circular economy

The UPM Kaukas mills produce pulp, paper, energy and sawn timber. Research into new innovations, such as diesel made of crude tall oil, are also taking place at Kaukas. Production of wooden spools began at Kaukas a good 140 years ago. The leftovers were used to produce pulp. These days, the residue of pulp production is used to produce renewable diesel, UPM BioVerno, which is suitable for all diesel engines. The old Kaukas spool factory has become a complete circle in a physical sense too, as it now houses the control room, laboratory and offices for the new biorefinery.

Next to the spool factory stands a brand new biorefinery, which annually produces 120 million litres of wood-based renewable diesel for reducing traffic emissions. The main product of this process is UPM BioVerno diesel, the production of which generates renewable naphtha as a by-product. This naphtha can be used as a biocomponent for regular gasoline. During their life cycle, both BioVerno products reduce up to 80% of carbon dioxide emissions. In this innovative process, we use the residue of our pulp processes—crude tall oil—as a raw material. Majority of the crude tall oil comes from UPM’s three, large pulp mills in Finland.



Added value for side streams

The wood-based product developed from the residue of pulp production generates new side streams that are further utilized as renewable resources. The refinery’s unique processes transform crude tall oil, originating from the resin of the wood, into renewable diesel. The side streams of the process—naphtha, turpentine, pitch and sodium bisulphite—are used to produce perfumes, bleaches or bioplastics.

Based on the principles of circular economy, each residue is utilized, reducing the usage of fossil raw materials in the process. The demand for certified fuels and chemicals is increasing, for example, within the biochemical and bioplastic industries, as fossil raw materials and end products are being replaced with renewable alternatives.

UPM's goal is to reach a stage where no waste from the company’s sites is taken to landfills or burned without the energy first being recovered. In Finland, UPM aims to stop taking waste to landfills within a few years. Globally, the goal is to achieve this by 2030. Approximately 90% of process waste is already being recycled. From our perspective, yesterday's waste is the valuable raw material of today, and responsibility is one of our core strategies. It is also gives us a clear advantage over the competition.



A great example of circular economy is UPM’s innovative Biofore Concept Car, in which most plastic components have been replaced with wood-based biomaterials. It was built in collaboration with automotive, transportation and industrial design students from Metropolia University of Applied Sciences.

Finnish industry has a unique chance of becoming a frontrunner. With new business models and technological innovations, we can use circular economy to generate significant economic growth and sustainable wellbeing. The solution is relatively simple: We need to minimize waste generation, utilize side streams, reduce the need for new raw materials and create new jobs in the process.


Sari Mannonen
Vice President
UPM Biofuels