Crude tall oil low ILUC risk assessment Comparing global supply and demand Crude tall oil low ILUC risk assessment Comparing global supply and demand By: Daan Peters, Viktorija Stojcheva Date: 24 April 2017 Project number: SISNL17494 © Ecofys 2017 by order of: UPM ECOFYS Netherlands B.V. | Kanaalweg 15G | 3526 KL Utrecht| T +31 (0)30 662-3300 | F +31 (0)30 662-3301 | E
[email protected] | I www.ecofys.com Chamber of Commerce 30161191 Executive Summary UPM produces renewable diesel and naphtha from crude tall oil (CTO) in its biorefinery in Lappeenranta, Finland from early 2015 onwards. Because the company wanted clarity on the status and sustainability of its feedstock, UPM asked Ecofys in 2013 to assess whether CTO can be regarded as a residue and whether the feedstock would be low ILUC risk, meaning its use for biofuels would not lead to displace- ment effects of existing other uses. The current report is an updated version of the 2013 report. An important change since the previous report is that biofuel production at UPM has started, so any effects of CTO usage for biofuels has on the CTO market would be visible. Ecofys studies the following questions in this report: 1. Can CTO be defined as a residue based on biofuel legislation 2. Does the feedstock create an additional demand for land (is it a low ILUC risk feed stock?) 3. Does the use of the feedstock for biofuel production cause significant distortive effects on markets? The second and third question are closely interlinked. CTO in itself is a non-land using feedstock.