Biorefinery – Est-For Invest

Environmental and economic impact

Environmental impact

The biorefinery will be established using the best available technology (BAT) and in accordance with the stringent legal requirements set by the permits of the planning and environmental impact assessment (EIB) process. All products of the biorefinery would be completely recyclable and the plant would fully reuse all by-products and residues. Moreover, the biorefinery would have an entirely fossil fuel free process. The project investors guarantee that the biorefinery would not impair the water and land ecosystems involved in the production process.

Impact on the Estonian economy

The long-term economic competitiveness of the planned biorefinery will be achieved through efficient energy and timber use. It will also be cemented by the use of the newest available technology and its geographical proximity to renewable resources, the European market, and ports.

The biorefinery would export its products in the volume of EUR 320–420 million per year. While replacing the current export of unrefined timber, it would increase Estonian exports by EUR 250-350 million annually. The export value of Estonian products would increase by 2–3%.

The direct added value created by the biorefinery would be EUR 210–270 million, representing about 1–1.3% of Estonia’s GDP in 2015. Taking into account the indirect impact on other sectors and effects of increased private consumption, the total added value from the operation of the mill would amount to 1.4–1.8% of GDP in 2015. The net added impact (part of current economic activity will be replaced) of the direct, indirect and induced added value created by the mill will be an increase in GDP equal to 1.1–1.4% of its value in 2015.

The biorefinery would create 200 new skilled work posts outside the capital region. It would further induce the creation of a large number of jobs within the whole forestry value chain (transport, logistics etc.) and in the economy as a whole. The construction phase would create 3 200–3 800 man-years’ worth of jobs. The operational phase would grant work for 1 400–1 700 people in addition to the mill’s own staff. Subtracting replacement effects, the net impact of the operation of the plant on employment within the forestry value chain and elsewhere in the economy would be 900 additional jobs.

Creation of the biorefinery would structurally diversify and strengthen Estonian forestry and add to the stability and competitiveness of the Estonian forest and timber sector, reducing the gap with developed countries of the world. Compared to the raw material exported to Nordic pulp mills today, the value added to the timber resource would make its price 4 to 5 times higher. E.g. while one cubic metre of birch pulpwood currently costs ca. 31 euros in the global market, the global price of cellulose produced from the same amount is around 138 euros. In other words, instead of exporting cheap raw materials, pulpwood and chips from sawmills would be directed into further processing in the local biorefinery.

The Estonian manufacturing industry suffers from lower productivity (i.e. added value per employee) compared to our Nordic neighbours. The planned biorefinery would bring a considerable increase of this indicator. With the average productivity in the Estonian manufacturing industry in 2015 amounting to ca. 23 000 euros per employee, the labour productivity of the planned biorefinery would be between 1–1.4 million euros per employee. As a result, the average added value per employee of the whole manufacturing industry sector would increase by 7–9%.

Establishment of the biorefinery would also help diversify energy production. The constant and stable renewable energy production of the mill would exceed its own consumption by 25%. Together with the energy for own use, this would increase renewable electricity production in Estonia by 34–45%. Diversification of energy production reduces distribution losses and increases supply security.

The planned biorefinery would contribute to growth in national wealth. Estonia has more than 104 000 households that own forest, likely to gain directly from supplying the planned mill. A substantial proportion of the gains would go to the Estonian people and society as the largest forest owner through the State Forest Management Centre (RMK).

Investors are planning to conduct the analysis and research phase of the project in close cooperation with the public, all stakeholders, academic circles and potential co-investors, to ensure that the construction, technology and operation of the biorefinery will comply with all environmental requirements, the best available techniques (BAT), and the needs of Estonian society.