Finland’s UPM delays work on SAF/HVO site

Finnish forest company UPM has pushed the timeline on the development of its biofuels site by delaying investment decision amid market ‘turmoil’.

“Before the potential investment decision, our focus will be on testing the new technologies on flexible feedstock options at a larger scale and securing the feedstock supply. This will be essential to ensure differentiation and support the long-term competitiveness of the business case. We expect this work to take approximately two years,” the company said in a note accompanying its second quarter earnings report.

The company had announced its decision to move forward with biofuels site in January 2021. “UPM moves forward with biofuels growth plans and starts the basic engineering phase of a next generation biorefinery,” the company had said at the time.

During the announcement, the company said the potential biorefinery would have an annual capacity of 500,000 tonnes of high-quality renewable fuels including sustainable aviation fuel (SAF).

However, in its 2Q2024 announcement, it said that “the recent market turmoil only confirms our view that a differentiated, competitive and sustainable feedstock range will be the key to ensuring profitability over market cycles and potential regulatory developments.”

It said it has made significant progress on the design and basic engineering of the potential biofuels refinery in Rotterdam including successful validation of their technology to process UPM’s integrated feedstocks.

UPM’s announcement adds to an increasing number of SAF project pauses and cancellations. Shell, BP and Australian firm Oceania Biofuels have all announced their decision to shelve biofuel projects.