Smurfit Kappa goes ahead with biofuel plant

BRUSSELS, July 04, 2008 (RISI) - Smurfit Kappa and Chemrec are moving forward with the pre-project phase for a renewable methanol/dimethyl ether fuel production plant at the former's mill in Piteå, Sweden. The two parties completed the feasibility study back in April.

A final decision is expected to be taken during the second quarter of next year. The facility could be up and running by the end of 2010 at the earliest.

The plant would produce 70,000 tonnes/yr of biofuels and would use one-third of the mill's black liquor. Most of the output would be sold to northern Europe. The investment would cost approximately Euro 150 million ($236 million).

The project is running concurrently with a similar investment that Chemrec is carrying out at the NewPage pulp and paper mill in Escanaba, Michigan, USA. This investment is ahead of schedule and Chemrec expects to take a decision on whether to go ahead with the final project during the first quarter next year.

Smurfit Kappa installed a new Euro 70 million ($110 million) biofuel boiler at the 700,000 tonne/yr Piteå mill last year. The facility houses two machines: PM 1 produces unbleached kraftliner, while PM 2 makes white-top kraftliner. The group received an environmental permit renewal in 2006, enabling it to raise the plant's capacity by 50,000 tonnes/yr. Smurfit Kappa aims to increase the capacity gradually over the next few years through some small improvements to the machines.