SCA, St1 partner to produce renewable diesel, SAF from tall oil

Swedish forest products company Svenska Cellulosa AB (SCA) and the Nordic energy group St1 have entered a joint venture to produce and sell liquid biofuels such as renewable diesel and sustainable aviation fuel (SAF). SCA will supply tall oil to the joint venture and will invest approximately USD$69 million in the company. SCA and St1 will be equal shareholders of the joint venture, which will itself have a 50 percent share in the St1 Gothenburg Biorefinery (Sweden), which is now making an investment in a biorefinery with total capacity of 200,000 metric tons (approximately 67 million gallons) of liquid biofuels, estimated at a total investment cost of $288 million. The new biorefinery will be operational in the second quarter of 2023.

“Partnership with SCA is a key element in the implementation of our renewable fuels investment program and it secures the supply of renewable feedstock materials to meet the ambitious Nordic climate targets for 2030,” said Henrikki Talvitie, CEO of St1 Nordic Oy.

Ulf Larsson, president and CEO of SCA, said, “In line with our communicated long-term strategy, we will now—with the joint venture with St1—go from being a supplier of tall oil to the chemical and fuel industries to becoming active in the further refining of our renewable raw materials. We will continue to develop the business potential of the renewable byproducts we have from our forests and industries in order to further develop our value chain and to contribute to the EU’s ambitious climate strategy.”

The new biorefinery is under construction on the St1 refinery site in Gothenburg and will have a total capacity of 200,000 tons of liquid biofuels. It is designed to optimize production of hydrotreated vegetable oil (HVO), or renewable diesel, and SAF using tall oil-based feedstock. The joint venture will have access to SCA’s tall oil, a byproduct from the kraft pulp production at SCA’s mills in Östrand, Obbola and Munksund, Sweden. The biorefinery will also be capable of using a wide range of other feedstocks and is expected to be operational in 2023.

As part of the agreement, St1 also becomes a 50 percent owner of SCA Östrand Biorefinery in Sweden. The Östrand biorefinery project has recently received environmental permits for the production of 300,000 tons of liquid biofuels based on black liquor (a byproduct from kraft pulp production) and solid biomass (such as sawdust or bark). The biorefinery in Östrand is a development project where a number of technological challenges remain to be solved before a project design can be finalized.