Advanced biofuels and Kaidi project in Kemi Matti Kymenvaara Kaidi 9 May 2019

1 The EU wants to reduce 1st generation biofuels (food chain) consumption and increase production from advanced feedstocks

• In the revised Renewable Energy Directive (RED II), the EU wide overall renewable energy target is 32% by the end of 2030 • The share of renewables in the transport sector is 14% by 2030, from which a significant increase is to come from ‘advanced feedstock’ –based fuels. • By definition, advanced feedstocks are ligno-cellulosic and waste-based feedstocks, such as straw, sewage sludge and forest residues • Advanced feedstocks need to comply with the sustainability criteria: Countries with advanced forest and land management practices and regulations, such as the Nordics, are considered to be sustainable feedstock producers

5/22/19 2 Production of advanced biofuels is expected to increase strongly

• RED II 2021-2030 states that the share of ‘Advanced Biofuels’ shall be, in EU, at least equal to – 0.2% in 2022, – 1% in 2025 and, – increasing up to at least 3.5% by 2030 • According to Finnish Energy and Climate strategy, the share of biofuels in transport will be 30% by 2030 • Swedish government has accepted a goal to decrease the emissions of domestic transport by 70% by 2030 compared to 2010. • Norwegian government has announced a blending mandate for 0,5% biojet from 2020. Government pursues 30% share of jetfuel to be climate friendly by 2030 Source: USDA GAIN report 3 July 2018

5/22/19 3 The IEA recommends a strong shift towards advanced biofuels

global advanced biofuel project development by country • Globally, according to IEA, the use of biofuels needs to triple, in order to achieve the 2030 SDS* target • The SDS requires a significant technology shift towards advanced biofuels. • Most of the biofuel use is in road transport, IEA estimates only 11% being aviation and marine combined demand by 2030

*) Sustainable Development Scenario Source: IEA

5/22/19 4 Kaidi Kemi project is located in EU’s northernmost port

Kolari

Tornio Kemi Kemijärvi Luleå Kemi

Piteå

Skellefteå

Umeå Kontiomäki Ylivieska

5 Lot of existing and planned chemical and mechanical forest industry; competition of feedstock but also potential synergies

Kemijärvi Rovaniemi

Luleå Kemi

Piteå Oulu

Skellefteå Paltamo

Umeå

Husum Kuopio

5/22/19 6 Kiitos. Tack. Takk.

Matti Kymenvaara Sourcing and sustainability manager [email protected]

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