(UPM, Helsinki, 20 June 2017 at 13:00 EET) - UPM Biofuels commissioned a study from leading international energy and climate consultancy Ecofys - A Navigant Company, entitled "Crude tall oil low ILUC risk assessment: comparing global supply and demand".
The study looked into crude tall oil (CTO) availability, current usage, whether the feedstock creates an additional demand for land, and whether the use of CTO in advanced biofuels can cause distortive effects in the markets.
The recently conducted Ecofys study concludes that "the CTO market is not overly tight and potential surplus of about 850,000 tonnes of CTO is still available that could be tapped into". The total potential CTO supply is around 2.6 million tonnes. Current actual CTO demand is approximately 1.75 million tonnes, of which about 1.4 million tonnes is used by distillers and roughly 230,000 tonnes for biofuels. Ecofys also concludes that "CTO use for biofuels did not cause displacement effects elsewhere, and hence CTO, a non-land using process residue, is a low ILUC (Indirect Land Use Change) risk material."
UPM considered it necessary to investigate the impact of UPM Biofuels' market entry, and to verify whether UPM BioVerno production may have impacted negatively on the CTO market. The study brings necessary information into the debate concerning raw material availability for various end-uses such as advanced biofuels and biomaterials.
Current debate relating to the EU's Renewable Energy Directive puts raw material availability of feedstock into focus as most materials tend to have alternative usage. "It is important to UPM that we can showcase that our entry into the markets has had limited impacts on the overall market, while it has enabled UPM to become the key producer of wood-based biofuels and products for the biochemical industry. We believe there is tremendous innovation potential in advanced biofuels," says Marko Janhunen, Vice President, Stakeholder Relations from UPM Biorefining.
This research was a follow-up to an earlier study from 2013 that looked into the same issues but this was before UPM began production of renewable diesel from CTO. In 2013, the study concluded that "sufficient quantities of CTO are available for biodiesel production without the risk to cause Indirect Land Use Change and that CTO should be regarded as residue". The new Ecofys study proved that the assumptions made in the earlier report were correct and UPM has created a new value chain parallel to existing ones.
"UPM entered the advanced biofuels business in 2015 and became the world's first producer of renewable diesel on a commercial scale from wood by tapping into our own pulp mill residue, Crude Tall Oil. Our entry has been a success, and we continue to investigate new technologies and feedstock," Janhunen concludes.
UPM Biofuels is the only biofuel producer that has, in addition to national certification, received both RSB (Roundtable on Sustainable Biomaterials) and ISCC (International Sustainability and Carbon Certification) certifications. This is very strong proof of the sustainability of all UPM Biofuels operations.
Link to study: Ecofys - Crude tall oil low ILUC risk assessment report
UPM plans to become a major player in high quality, advanced biofuels for transport. Biofuels are an essential part of the Biofore strategy. The innovative wood-based biofuels developed by the company and their production technologies are part of a sustainable future. UPM's biofuels are frontrunners in quality, usability and sustainability. They will significantly decrease greenhouse gas and tailpipe emissions compared to fossil fuels. www.upmbiofuels.com
Through the renewing of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Paper ENA and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The group employs around 19,300 people and its annual sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM - The Biofore Company - www.upm.com