EU Energy Union visits UPM Kaukas

15 November 2017
Maroš Šefčovič, Marko Janhunen (UPM), Jussi Pesonen (UPM), Jaakko Nousiainen (UPM)

The European union is preparing new energy and land use legislation to fulfil its commitments to the Paris climate agreement. The legislative proposals touch very much upon the interests of the forest industry, which is currently developing new bio-based products.

“In Finland, you are opening a new chapter in biotech by using forests and forestry residues in an innovative way for bio-based industry and renewable energy,” said Maroš Šefčovič, Vice-President of the European Commission, during his Energy Union tour in Finland in October.

Vice-President Šefčovič visited together with Finnish MEPs Miapetra Kumpula-Natri and Heidi Hautala to see the UPM Kaukas site, including UPM’s Lappeenranta Biorefinery, and then into the city of Lappeenranta to debate EU energy policy and the new legislative proposals.

Šefčovič praised UPM as the leader of the wood processing industry that is continuously looking for innovations in how to utilise renewable raw material.

“It is impressive to see the size of the company in various business areas and how UPM is thinking over the horizon by using their high quality engineering and research work for developing new technologies for the bio-based industry. New innovations are really taking off in the form of the ‘hockey stick curve’ here.”

UPM´s CEO Jussi Pesonen welcomed the visitors at the UPM R&D Center and urged the EU authorities to promote and ensure a stable legal framework for companies.

“We are making investments for the 20 to 30-year perspective. To be able to develop biotechnology and the bioeconomy further we need a clear long term vision on regulation. Our investments are capital intensive so we cannot afford to fail in our decisions,” he said.

Promoting advanced biofuels

Currently EU institutions are discussing the Renewable Energy Directive for 2021-2030. To fulfil the Paris climate agreement commitments the EU and national authorities have set very ambitious CO2 emission reduction targets.

“In our energy package proposal, we are promoting advanced biofuels made of wood residuals and waste while decreasing the proportion of food and crop based biofuels,” says Šefčovič.

For advanced biofuels, the Commission is targeting up to 6.8% of overall fuel consumption, which will necessitate substantial investment in new technologies utilising non-food raw materials.

“We are seeing already a shift from first generation biofuels in favour of advanced biofuels. I think that this reflects our proposals. We hope that this will also promote the advanced biofuels industry towards the year 2030.”

Šefčovič confirms that the commission understands very well businesses´ requests for regulatory stability.

“We should not have changed the rules in the middle of the legislative process a few years ago. The commission is very clear on the proposal that once crude tall oil was listed as a source of advanced biofuels it should remain like this,” he states.

“I am aware of different debates that are going on around the subject but I know there are a lot of MEPs and EU member states who understand that this a very important issue for Finland.”

Ensuring sustainable harvesting

The other topic is the so-called LULUCF (land use, land-use change and forestry) regulation. It regulates how forests, carbon sinks and emissions caused by the use of land are taken into account in the EU’s climate objectives.

Thanks to the fast growing bioeconomy in Finland, the forest industry is aiming to increase harvesting up to the 80 million m3 per year from the current level of approximately 60 million m3.

At the same time the EU would like to reduce the use of forest land through European climate policy. If Finland reaches its harvesting targets, forest use could potentially be counted as carbon dioxide emission and then the country should buy emission allowances from other EU member states or reduce CO2 emissions further in other industrial sectors where Finland already has very tight CO2 targets.

“The major drawback of the LULUCF is that the EU is comparing forest use in its calculations to the years 1990-2009 when it should project for the future. Fifty years ago, the forests in Finland grew by some 60 million m3 per year. Nowadays the growth is about 110 million m3 and according to some estimates it will increase up to 150 million m3 . That proves that we have done the right things over here,” Pesonen emphases.

“UPM has been the forerunner in the circular economy for a long time. Bioeconomy means replacing fossil products with renewable and sustainable materials. I think that the sustainable and efficient use of raw materials is the only solution to our global problems. We should put our focus on new innovations, and investment opportunities,” he adds.

The proposal for the LULUCF regulation is closely linked to the Commission’s effort sharing proposal, where the emission reduction target set for Finland is -39% from the level in 2005 by 2030. The legislation process is still open as there are several unclear issues related to the proposal, and to the accounting methods.

Europe leading by example

MEP Miapetra Kumpula-Natri (SD group) reminds us that developing the bioeconomy is also included in the Paris climate agreement.

“The aim of the EU legislation should be to support actions that will decrease carbon dioxide emissions. Commercial harvesting is also a part of the work taking care of carbon sinks. Therefore, I think that the fundamental short term changes in the legislation are a real threat for innovations and investments. In the long term that would even jeopardize our ultimate goal to slow down climate change,” she says.

MEP Heidi Hautala (Green group) agrees that companies need to have a stable long term regulatory environment. “However, it looks like climate change is proceeding faster than expected so the issue is becoming even more urgent.

“The efficient use of recourses is intertwined with the fight against climate change especially in the field of energy production. I think that raw materials should be guided towards the long term end use where they benefit the circular economy the most. That is why I doubt the strategy of the Finnish government to massively increase forest harvests to produce biomass for biofuels production,” expresses Hautala.

Šefčovič continues to be confident that forests are managed extremely well in Finland.

“Now we are looking at how to accommodate the Finnish proposal without losing the integrity of our proposal vis-à-vis the international community. We have to be very credible how we are managing the forests and how we deal with deforestation and how we count all the harvesting,” he said.

“Europe wants to lead by example so I think that we are going to do so. At the European Commission, we are going to be as creative as possible to find a solution that would be good enough for Finland and keep the integrity of the Commission proposal at the same time.”

Vesa Puoskari

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