UPM, Neste and St1 are advancing plans to produce renewable jet fuel from forest industry residues. The shift aims to meet growing EU requirements for sustainable aviation fuel, known as SAF.
In Lappeenranta, UPM Biofuels is preparing to start commercial production of SAF by refining its existing renewable diesel product. The facility currently produces renewable diesel from crude tall oil, a by-product of softwood pulp manufacturing.
Petri Rekonen, director of the Lappeenranta biorefinery, said UPM has already tested the fuel in a dual-engine turboprop aircraft. One engine ran on renewable fuel produced at the plant, the other on conventional jet fuel.
“The results show our fuel performs well in aircraft,” Rekonen said.
UPM is waiting for international approval to use tall oil as a SAF feedstock. The approval process through ASTM, a global standard-setting body, takes about two and a half years. Once granted, UPM will decide whether to launch full-scale SAF production.
The Lappeenranta plant has an annual capacity of 130,000 tonnes of renewable diesel and naphtha. It sources crude tall oil from a nearby pulp mill, as well as from other facilities in Finland and the United States.
One tonne of pulp yields 20 to 30 kilograms of tall oil. Due to its limited availability, the substance is also used to produce animal feed, paints, adhesives and plant-based sterols for cholesterol treatment.
While UPM focuses on tall oil, St1 is exploring other forest-based materials. In cooperation with Swedish forestry company SCA, St1 plans a biorefinery in Östrand, Sweden. The facility would use sawdust, bark and other industrial wood residues to produce SAF and e-fuels.
Olli Lahdenperä, head of renewable fuels at St1, said the market supply of tall oil is insufficient for multiple producers.
“Only about two million tonnes of tall oil is available, and just a third of that is used in fuel production,” Lahdenperä said.
The Östrand refinery would use feedstocks currently used for heat generation. The site would also process logging residues, which are largely unused in Sweden. Half of the refinery’s output would be SAF and the rest e-fuels.
Lahdenperä said the investment, estimated in the billions of euros, would only proceed if long-term pricing support is introduced for e-fuels.
“A mechanism is needed to guarantee price stability for at least ten years,” he said. The facility could begin operations in the early 2030s.
Neste is also developing technologies to expand its use of forest waste and lignocellulosic biomass. The company already sources used cooking oil and animal fat for fuel production, but sees limited room for growth in waste-based inputs.
Carl Nyberg, head of renewable products sales at Neste, said the company is researching new feedstocks to scale production.
“We have the capability to use tall oil,” Nyberg said, adding that the firm has also studied the energy potential of lignocellulosic materials for some time.
Neste estimates that renewable fuels based on forest residues could eventually replace the energy content of 350 million tonnes of crude oil.
Since January 2025, EU regulations require all jet fuel sold at major European airports to contain at least two percent SAF. That figure will rise to 70 percent by 2050.
Marie Owens Thomsen, chief economist at the International Air Transport Association (IATA), said SAF will be critical to reaching aviation’s 2050 net-zero targets. Most production technologies are still under development or in pilot stages.
“All possible feedstocks and technologies must be used,” Thomsen said. She added that each region must rely on its natural advantages. For the Nordic countries, these include forest residues and renewable electricity.
Thomsen criticised the lack of financial incentives for SAF production. She compared the situation to early wind and solar investments, which received annual global funding of USD 150 billion during market formation.
“That same level of investment is now needed for SAF,” she said.
Thomsen also noted that current market dynamics favour fossil fuel production due to higher returns. Still, she expects SAF prices to decline in the coming years, despite an oversupply that exists today.
In Finland, investment in green energy is rising. Data from the Confederation of Finnish Industries shows EUR 233 million in fossil fuel replacement projects will be completed this year. Most funding has gone into electric boiler systems, but none of the projects will increase SAF production.
HT
