By the Blouin News Business staff

Chinese biorefinery to boost Finland’s forest economy

by in Asia-Pacific, Europe.

Source: Phillip Glombik/flickr

Source: Phillip Glombik/flickr

Kaidi, one of China’s largest bio-energy firms, will be expanding to Finland for the first time. On Wednesday, Pekka Koponen, CEO of the newly established subsidiary Kaidi Finland, announced plans to build the world’s first-ever biodiesel refinery whose primary material is “energy wood.” This includes scrap wood and logging by-products like roots and stumps, so forest-rich Finland is a natural choice.

The investment of up to €1 billion ($1.12 billion) will produce about 150,000 tons of biodiesel and 50,000 tons biogasoline annually. Koponen said the final investment decision and selection of partners will be made this year, and the refinery could be ready by the end of 2019. This would be the biggest Chinese investment in Finland ever, and it shows the global clout of China’s green-energy firms. Kaidi operates about 30 biomass plants in China and Vietnam, and the plant in the northern Finnish city of Kemi would be its first in Europe.

This deal is a perfect match. Finland’s economy has stagnated over the last few years, and its once thriving forest industry has shed thousands of jobs in the past decade. (Paper mills closed due to the increased use of digital devices.) But this plant would employ about 4,000 people during its construction, and after it’s up and running it would have a staff of around 150.

Meanwhile, Kaidi said it was attracted by the country’s vast forests and government subsidies. “Finland is the most interesting investment target in the northern hemisphere, when it comes to biofuels,” Kaidi Chairman Chen Yilong said in a statement.

All over the world, there is huge scope for leftover organic materials to be converted to biofuels rather than discarded. For example, in September Boeing and China’s National Development Reform Commission announced a new initiative to turn agricultural waste (like corn cobs and wheat stalks) into sustainable aviation biofuel. According to the U.S. Department of Energy, sustainably-produced aviation biofuel has 50-80% fewer lifecycle carbon emissions than conventional petroleum jet fuel.

And China’s green energy firms have another advantage in expanding globally: unlike their oil and gas counterparts, they aren’t viewed with suspicion and xenophobia. No one argues with sustainable clean energy boosting local economies.