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1 | © UPM
Marko Janhunen, Vice President, Stakeholder Relations, UPM Biorefining TransSmart-loppuseminaari 16.02.2017
Biopolttoaineet: ohituskaista vähähiilisyyteen
EU’s greenhouse gas reduction targets cannot be met without significant emission cuts in transport – actions needed in all sectors
25%
Biofuels are needed in short and long-term to meet EU’s ambitious greenhouse
gas reduction targets
of total emissions in Europe from
transport
Transport emissions by sector
Drop-in biofuels are a solution for GHG reduction in all
transport sectors
Electric vehicles can be applied in light-duty road
transport
- 40%
- 60%
- 80%
by 2030
by 2040
by 2050
EU’s overall GHG reduction targets
Source: European Comission, Climate action
EU targets 40% reduction in GHG emissions by 2030 to keep global warming below two degrees Targets cannot be met without significant emission cuts in transport
3
Decarbonizing European
transport requires effective
use of all energy and
technology options –
Renewable drop-in fuels:
a fast-lane solution
* Calculated based on ”Global EV sales outlook to 2040” by Bloomberg New Energy Finance * Assuming EV’s represent 38% of new car sales in Europe by 2040 + EV’s are fully emission free ** Assuming annual energy efficiency improvement of 2% in light-duty, 0,5% in heavy-duty
UPM BIOREFINING
UPM ENERGY
UPM RAFLATAC
UPM SPECIALTY PAPERS
UPM PAPER ENA
UPM PLYWOOD
UPM BIOCOMPOSITES UPM BIOCHEMICALS
UPM today
Wood is a unique and excellent raw material for mitigation of global challenges
5
SUSTAINABLE
VERSATILE
RENEWABLE NON-FOOD
NON-GMO RECYCLABLE COMPETITIVE
LOW MARKET VOLATILITY
Wood raw material is the basis of many different businesses at UPM
6
Bark and branches to biofuels and energy
Fibres to pulp
Lignin to biochemicals
Extractives to renewable diesel or biochemicals
Logs for sawn goods and plywood
Fibres to biofibrils
Cellulose or hemicellulose to biochemicals
Fibres to biocomposites
New business opportunities for UPM
7
• Auxiliary for pharma R&D
• Industrial Applications
• Performance chemical
• New applications
• New material • End-user product
• High volume products • Economies of scale • Drop-in applications
Biofuels Biofibrils
Biocomposites Lignin
Biochemicals
Biorefinery Chemicals Biorefinery Chemicals
Market entry 100 kt renewable diesel Renewable naphtha
2 production sites
Capturing synergies by full integration into UPM Kaukas mill site in Lappeenranta, Finland
RESEARCH CENTRE
BIOREFINERY
SAW MILL
PAPER MILL
BIOMASS POWER PLANT
PULP MILL
1 3
4
5
6
2
9 | © UPM
UPM Lappeenranta Biorefinery
Key facts • Product: Renewable diesel
• UPM investment: 179 M€
• Capacity: 100,000 tonnes/a
• UPM patents and applications: 200
• Employs 250 persons (incl. indirect)
10 | © UPM 25 November 2015 10 | © UPM
UPM BioVerno – Renewable diesel
RENEWABLE FEEDSTOCK
100 % CO2 EMISSIONS (VS. FOSSIL FUEL)
-80 %
11 | © UPM
IN FOOD CHAIN
0 %
OXYGEN FREE HYDROCARBON
100 %
UPM Lappeenranta biorefinery – all streams add value
12 | © UPM
Renewable gasoline component in road transport
Feedstock for bioplastics production or biochemical use
Renewable drop-in diesel for
road and marine use
Bio-based aroma chemical for fragrance
industry
Renewable fuel or applications in Chemical industry
Reducing agent in pulp and chemical
industry
UPM BioVerno diesel
UPM BioVerno naphtha
Turpentine Pitch Sodium
bisulphate
Renewable wood-based chemicals
Biorefinery processes Raw materials from UPM’s own pulp production: Crude tall oil
UPM BioVerno renewable diesel - passenger car fleet tests
Fleet testing with 20% UPM BioVerno renewable diesel with 4 Volkswagen cars • Independent testing by
experienced test drivers of Technical Research Centre of Finland (VTT)
• Investigating fuel functionality in engine, emissions and fuel consumption
Material & laboratory testing
14 | © UPM
Summer and winter conditions, various distances 4 Volkswagen cars,
20 000 km/car
Functions as premium fossil diesel
14 | © UPM
15 | © UPM
UPM BioVerno renewable diesel - bus fleet tests
• Phase II in TEKES BioPilot by VTT • Laboratory tests with Euro III busses • 4 Volvo EuroVI busses operated by
Transdev – 2 reference & 2 UPM BioVerno busses – 20%, 50% & 100% UPM BioVerno – 1 year, 100.000 km/bus
• HSL Helsinki-Kerava bus route
UPM BioVerno renewable diesel - bus test results
16 | © UPM
9,08,2 8,5 8,4
10,39,5 9,1 9,3
0
2
4
6
8
10
12
Diesel GTL HVO BioVerno
g/km
Fuel effects on NOx and PM emissionsEuro III level bus
NOx PM*100
~ -10 % ~ -95 %
UPM BioVerno renewable diesel & Euro VI vehicles - very good solution for local as well as greenhouse gas emissions!
Functions as premium fossil diesel
Driving cleaner traffic – UPM Biofuels Partner of HSL’s BioOneHundred project running on 100 % biofuels by 2020: Making strategy to a reality
17 | © UPM
Impact of Finland’s 30% blending
mandate to fuel retail price (vs. EU RED2
mandate)
+2%
€/cbm
Finland’s bio target of 30% (2030) increases fuel retail price by approximately +2% vs. RED2 EU mandate (prices calculated using three-year historical averages)
€/cbm
-1000
-600
-200
200
600
1000
1.1.2013 1.1.2014 1.1.2015 1.1.2016 1.1.2017
Blending economy Single Count. HVO
ULSD Tax diff.
TAX share of the negative bio blending economics
Blender’s share of the negative blending economics
298 397 426
214 65
456 495 506
50 50 50
244 241 236
1 263,06 1 247,53 1 217,35
0
200
400
600
800
1000
1200
1400
FIN 30% EU RED2 6,8% 0 bio
Fossil Biofuel Fuel tax Retailers margin VAT
+2 c/l (+5 c/l)
HVO price (single-counted) calculated using RME as reference
Historical prices Impact of FIN 30% target to fuel
retail price
Fossil fuel and biofuel (RME-referenced single-counted HVO) prices calculated using 2014-2016 averages
Large scale Biorefining requires new types of collaboration Chemical, petrochemical and forest industry can create new opportunities
19 | © UPM
Access, management and sourcing of biomass
4. Lorem ipsum dolor 12pt Lorem ipsum dolor sit amet, consectetur adipiscing elit. Fusce eu tincidunt ipsum
Three areas of competence are needed for new biomass based innovations
Chemical processes
• Kraft pulping • Renewable
diesel production
Biomass handling
• Debarking • Saw mills • Mechanical
pulping
Bioenergy & Infrastructure
• Biomass boilers • CHP • Water treatment
Run sustainably large industrial processes
Processes of biomass conversion 1 2 3
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