Declining paper sales have spurred mill owners to diversify their operations into other potentially more lucrative areas – including biomaterials, Cath O’Driscoll reports
Helsinki-headquartered renewables company Stora Enso has a motto. ‘Everything we can do today with fossil fuels can be made from trees tomorrow,’ recites Andreas Birmoser, svp of business development in the firm’s fast growing biomaterials division.
Ten years ago, around 70% of company revenues were generated by sales of paper and paper products, Birmoser points out; now that figure is around 38% - with the remainder down largely to packaging, biomaterials and wood products. The world’s largest supplier of liquid packaging board, one in three beverage cartons around the world currently uses its materials.
But Stora Enso is far from alone in having to adapt to a changing digital environment. Declining paper sales have led to a slew of closures of less competitive pulp and paper mills worldwide. Mills that have survived the cull have been quick to diversify to explore other opportunities, not least of which are biomaterials, Birmoser says.
‘The current challenge facing the European pulp and paper industry,’ according to a recent report in the open access journal Futures (https://doi.org/10.1016/j.futures.2017.02.002), ‘is how to materialise the transformation to a bioeconomy, as well as to realise the necessary new green innovations.’
In just over a decade - by 2030 – the report authors predict that 40% of sales in Europe’s pulp and paper sector will come from 'genuinely new products’ - novel and higher value products aimed at a growing army of environmentally aware consumers.
This future bioeconomy offers resourceful mill owners a means to diversify their operations into other more lucrative areas by replacing environmentally damaging petrochemicals by biomass. Wood and non-competing food crops and wastes will be the feedstock for the production of a slew of chemicals from pharmaceuticals to food additives and coatings - with huge savings in CO2 emissions in the process.
At Stora Enso, the transition is already under way, Birmoser says. Most trees have around a third each of cellulose, hemicellulose and lignin, he explains. Currently, only around half of the wood harvested by the company currently ends up as products, while the rest - mainly unused lignin - is typically burnt to produce energy. But this is about to change as new technologies come onstream to make better use of this under-exploited feedstock and derive more value from it.
‘The key is better extraction and separation technologies to access and transform these three components – cellulose, hemicellulose and lignin – so we can get more value from them, processing them into chemicals, biopolymers and other renewable products’ Birmoser says. ‘Lots of companies are now working on this, but none has yet delivered a solution for a biorefinery concept.’
Central to Stora Enso’s own biorefinery ambitions is technology acquired from US biotech Virdia, following a takeover back in 2014. Virdia’s CASE process employs acid hydrolysis to convert biomass to high quality sugars and lignin, he explains, yielding valuable monomeric C5 and C6 sugars for applications in food and feed fermentation applications, as well as for renewable chemicals and fuels. While acid hydrolysis has been around since World War II, Virdia’s technology is claimed to be highly cost competitive - involving complete recycling of the hydrochloric acid – as well as yielding high purity sugars.
The first part of the technology will soon be tested out at a new Stora Enso demonstration plant in Louisiana, US, for the conversion of sugar cane bagasse – a waste residue from sugar manufacture – to C5 sugar xylose. The first batches of xylose – the starting ingredient for the natural sweetener Xylitol among other food and dental care applications - are reported to be on track for delivery to customers later in 2017.
The current burning of lignin is terribly wasteful, agrees Roxana Barbieru, head of Stora Enso’s biomaterials market and application development. The world’s second most abundant organic polymers after cellulose, lignins are responsible for the ready yellowing of newspapers, and must be removed from the pulp before high quality bleached paper can be manufactured. In nature, Barbieru points out that lignins strengthen wood and particularly bark by filling in the spaces in the cell walls between cellulose, hemicellulose and pectin components. ‘Made up of a complex class of crosslinked phenolic polymers, lignin is potentially a valuable starting point for synthesis of adhesives and resins to coatings and speciality chemicals,’ she says.
One of the first companies to look seriously at commercialising lignin chemicals back in the1920s was US firm Marathon Chemicals, now known as Borregaard LignoTech and owned by Norweigan company Borregaard.
‘With 443,000 metric tonnes dry solid sold during 2016, we are the world´s leading supplier of lignosulfonates and manufacture a wide range of lignosulfonates for multiple industrial end uses,’ says Borregaard communication manager Tone Horvei Bredal. The largest use for lignosulfonates is as plasticizers for making stronger concrete, with a lower water content. They are also used for the production of plasterboard and in tanning leather, while oxidation of lignosulfonates from softwood trees produces the artificial vanilla flavour vanillin.
In terms of its biorefinery operations, Horvei Bredal points out that Borregaard has been producing ethanol from yeast fermentation of wood sugar at its our biorefinery in Sarpsborg in Norway since the 1930s. Its proprietary second generation biorefinery technology BALI - for production of cellulosic sugar and lignosulfonates – has been scaled up and demonstrated in a 1mt/day demo plant running alongside the original Sarpsborg biorefinery since 2013.
Stora Enso, meanwhile, began its first sales of refined lignin in 2016 from its new integrated separation and extraction plant at Sunila Mill in Finland. The first step towards a new business selling lignin to external customers, Barbieru says the move will enable global specialty chemical and high-performance material customers to replace fossil-based raw materials with renewable alternatives. The first applications will be in, for example, the building, construction and automotive sectors, where lignin offers more sustainable and healthier alternatives for phenols in plywood glues and other wood-based panels, and polyols used in foams.
‘The investment in Sunila Mill will accelerate Stora Enso’s transformation into a renewable materials company, commented Juan Bueno, EVP, Stora Enso Biomaterials Division back in 2013 when the Euros32m biorefinery investment was first announced.
With a capacity of 370 000t/year of softwood pulp, the mill is also claimed to reduce CO2 emissions by replacing up to 90% of natural gas by lignin extracted from the black liquor.
As well as selling lignin to customers, Barbieru points out that Stora Enso scientists in its innovation centre for biomaterials in Stockholm are also busy working on developing their own adhesives which replace high levels of phenol in the synthesis process. While completely replacing phenol as a raw material in glue is still some years away, she says researchers are hopeful a ‘dramatically reduced phenol content’ adhesive could be on the market in just a few years.
The growing popularity of biomass-derived products, however, also poses other issues. Sustainable forestry, for example, has become a ‘hot topic’ in recent years, with calls in December 2016 by Greenpeace for ‘urgent action’ to save the northern forests, including a ‘massive reduction of forest degradation’ across the Great Northern Forest, an area it says is ‘the world’s largest terrestrial carbon store,’ stretching from Russia, through Siberia, across the Ural mountains to Scandinavia and from the east of Canada to Alaska.
In Finland, wood use is forecast to increase 10-31m m3 in 2020-2030 as a result of new industry projects, according to Hannah Aho, Finnish campaigner at FERN, an NGO dedicated to protecting EU forests and people. About 21 new investments are on the planning table, some for biorefinery or energy, some pulp and paper, she points out.
‘The forest industry is not the reason for forest loss in Finland, but building of houses, industry installations and roads is,’ Aho says. In terms of sustainability, Stora Enso is ‘probably doing the most to ensure better practices than all the other big companies,’ she continues, adding however that ‘they do more and their actions outside of EU should be researched more carefully’.
For its part, Stora Enso reports that 100% of its wood comes from sustainable sources, a mixture of privately owned semi-natural and owned or leased plantations. In 2016, the company reports its mills took delivery of a total of 37.6m m3 of wood– including Roundwood, wood chips and sawdust. ‘We always ensure that the forests are harvest are duly regenerated,’ the company claims – for every tree removed a new one is planted.
Aho argues, however, that: ‘Regeneration does not mean that forestry is sustainable, only that the supply of wood in the long term can be guaranteed. Severe impacts on biodiversity, climate and the local people still occur,’ she says. ‘Before the reinstating of good environmental status of forest habitats and least concern status for currently endangered forest species, forestry in Finland cannot be sustainable.’
Elsewhere on the environment front, responsible mill owners are also making strides to improve carbon emissions. In 2016, for example, Stora Enso reports that carbon dioxide emissions per saleable tonne of board, pulp and paper were 39% lower than in 2006.
Most of the company’s paper, pulp and board mills use biomass energy for their internal operations, along with externally purchased energy, while excess heat and electricity is frequently sold to the surrounding community. At Stora Enso’s Skutskar mill in Gavle, for example, around 25GWh/year is delivered to the local municipality of Älvkarleby, says mill director Henrik Holm. The mill already has one line which produces fluff pulp and it is currently undergoing a Euros 26.5m project to transform its other, currently softwood, paper production line to a fluff production line, he continues. Mainly used in hygiene applications, the global fluff market is reportedly seeing 3.6%/year growth.
In Ghent, Belgium, meanwhile, Stora Enso and Volvo cars recently opened a new hot water pipeline between their manufacturing sites. The 4km pipeline takes hot water that is heated using renewable energy from the company’s Langerbrugge paper mill to the Volvo car plant, where it is used to heat buildings and paint booths – resulting in a 40% reduction in annual CO2 emissions by the Volvo plant.
Pulp and paper operations remain a key part of Stora Enso’s operations. Sales in the division increased operational Ebit by 174% in 2016 despite what the company calls a ‘continuingly challenging market’ – and spurred on by opportunities for new cost efficient print technologies and for advertising flyers.
Europe’s second largest paper supplier, after UPM, Stora Enso has nine paper mills with 19 production lines in Europe and operates one paper machine in China. In 2016 the company opened a new euros 800m Beihai consumer board mill – mainly for liquid packaging market – in Guangxi, China – the largest direct investment in China by a Nordic company to date. The board machine is expected to reach a capacity of 450,000 t of liquid packaging board and other high grade consumer products when it comes fully onstream/ in the next couple of years
Looking ahead to the future, however, biomaterials are expected to play an even greater role in the company’s fortunes. Already in 2016, 67% of sales came from the company’s growth businesses in packaging, biomaterials and wood products, Stora Enso reports. Proof, according to CEO Karl-Henrik Sundstro[umlaut]m, that the firm’s ‘transformation into a renewable materials company has been successful and is improving our profitability’.
Reinvention, it appears, is something that Stora Enso is good at. As a BBC news story back in 2012 pointed out (www.bbc.co.uk/news/business-16611040), the company is arguably the world's oldest limited liability corporation and can trace its origins to a copper mining company in 1288.