Finland could earn € 10-20 billion from RFNBO fuels
"The Finnish government, forest industry companies and forest owners should strive to accelerate the capture and use of bio-based carbon dioxide," write Petteri Laaksonen, Director of Energy Systems Research at LUT University, and Professor Christian Breyer in a statement.
Finnish industry produces around 28 million tonnes of bio-based carbon dioxide (bio-CO2) emissions annually, making Finland the second largest producer (40%) in Europe. The largest share, around 24 million tonnes, is generated in pulp production.
Bio-CO2 is the only carbon dioxide that is accepted by EU regulations as a feedstock for renewable fuels of non-biological origin (RFNBO).
As the EU has imposed a blending obligation on fuel producers for RFNBO fuels, the demand for bio-based carbon dioxide-derived fuels will grow rapidly in the 2030s. Regulatory requirements for the replacement of oil-based fuels will come into force rapidly.
The potential for Finland to produce RFNBO fuels from bio-based carbon dioxide using green electricity would exceed twice the current domestic fuel consumption needs, with annual revenues of €10-20 billion.
Planning is too slow
To meet the growth in demand, fuel production needs to increase rapidly. Most of Finland's bio-CO2 emissions - around 24 million tonnes - come from pulp mills. Currently, forest industry companies are exploring the potential for bio-based CO2 capture, but with limited efforts. The largest wood processing companies in Finland are UPM, Stora Enso and MetsäGroup.
Meeting EU demand for RFNBO kerosene fuel alone in 2035 - estimated at 500 000 tonnes - would require bio-CO2 capture equivalent to the emissions of about three large pulp mills, totalling about 7.5 million tonnes.
Planning for bio-based carbon capture and utilisation (CCU) is too slow and locked in by forest industry companies. However, the necessary technology is available (technology readiness level 9).
The business case will not last forever as the development of direct air capture (DAC) continues. It is expected to become significant after 2040. The technology is being developed and the leading region is still Europe, but China is expected to be overtaken soon.
Government and forest owners can accelerate solutions
The Finnish government should use national regulation to accelerate the liberalisation of bio-based carbon to realise its economic value. These measures could include providing incentives, creating a bio-CO2 emissions trading scheme or a combination of these approaches.
Given the business value of bio-based carbon, companies producing it should actively seek partnerships with energy companies with market access and advanced technology. This would improve the industry's profitability and operating conditions in Finland.
One option is for forest owners to start demanding measures and commitments from pulp mills to capture and use carbon dioxide when selling timber. This could be done, for example, through the Federation of Agricultural and Forestry Producers (MTK).
The position paper by Petteri Laaksonen, Director of Energy Systems Research at LUT University, and Professor Christian Breyer was originally published on the LUT University website.
