SCA and St1's Biorefinery Östrand agrees to €167M EU innovation grant in event of future investment decision; any future production of sustainable jet fuel, biofuel must create climate benefit of 9 million tonnes of CO2 equivalents in first 10 years

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December 13, 2023 (press release) –

Biorefinery Östrand, a company jointly owned by SCA and Finnish energy company St1, signed an agreement with the European Climate, Infrastructure and Environment Executive Agency (CINEA) at the beginning of December, which entitles the company to an innovation grant of approximately EUR 167 million in the event of a future investment decision. The agreement stipulates that any future production of sustainable jet fuel and biofuel must create a climate benefit of almost nine million tonnes of carbon dioxide equivalents in the first ten years.

“We still have a long journey ahead of us, but it’s very positive that Biorefinery Östrand has been singled out as one of Europe’s most important projects for creating climate benefits,” says Biorefinery Östrand’s CEO Roger Östlin. 

The innovation support includes challenging scheduling that will depend on rapid authorisation by authorities and short delivery times for time-critical equipment. 

“We look forward to an efficient project review process with the Swedish Energy Markets Inspectorate and Svenska kraftnät, (the agency responsible for the Swedish national grid), paving the way for permission to connect electricity to the transmission grid in parallel with us continuing to design the plant in close dialogue with selected suppliers,” Östlin says.

CEO St1 Refinery AB, Miika Eerola, welcomes the agreement with CINEA: 

That the EU wants to support the St1 and SCA Biorefinery Östrand project means that we can jointly accelerate the urgently demanded energy transition by uniting our forces. In addition to reducing carbon dioxide emissions from aviation, we can offer the plastics industry a more sustainable, renewable alternative to replace fossil raw materials with renewable naphtha”.

On July 13, 2023, CINEA announced that Biorefinery Östrand has been selected as one of the EU’s leading projects for the green transformation of aviation. Following the decision, talks took place on the innovation support for the continued development of the project, how that investment might look, and the plant’s first years of operation. 

Biorefinery Östrand is one of eight projects currently earmarked for support in CINEA’s general emissions reductions category. CINEA has approved a total innovation grant of EUR 167 million for the company. The support will be distributed on an ongoing basis in several different steps, provided that SCA and St1 decide to invest in the biorefinery. If the investment decision is not made, the project will not be implemented. 

Therese Nylander, Project Manager SCA Energy, has headed up work on the grant. 

“The fact that we’ve reached an agreement demonstrates the significance of the project and its importance in contributing to the EU’s efforts to enable the climate transition of sectors such as aviation,” says Nylander. 

It will be vital for the project to develop existing technologies so it can be scaled up and used effectively on a daily basis. 

Under the terms of the agreement, Biorefinery Östrand is required to share relevant knowledge gained from the project with those who want to replicate or are inspired to design, build and operate facilities mainly intended to produce sustainable aviation fuel (SAF), renewable fuels of non-biological origin (RFNBO) from forest industrial by-products (sawdust, bark and pellets) and renewable electricity. The facility will also be able to produce renewable naphtha, which can be used by the plastics industry to replace fossil raw materials. 

A future biorefinery would have considerable potential to create business and climate benefits and increased EU production of fuel, which is highly relevant given current global geopolitical uncertainty. It is estimated that in the first 10 years of operation, such a facility could generate carbon emission reductions amounting to almost nine million tonnes of CO2 equivalents. This can be compared with Swedish domestic aviation’s emissions for 2022, which have been preliminarily calculated at 306,000 tonnes of carbon dioxide by the Swedish Environmental Protection Agency.

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Photo: Håkan Sjödin

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Dan Rivard
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