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Fibenol investing €700 million in Latvia for biorefining plant

On 15 March, a Memorandum of Understanding was signed between the Estonian company Fibenol OÜ and the Ministries of Economy, Finance, Agriculture, Climate and Energy and the Investment and Development Agency of Latvia (LIAA) on the implementation of an investment project with a total investment volume of 600 to 700 million euros.

Fibenol is considering establishing its commercial-scale biorefinery in Latvia based on their patented and market-ready technology, the Sunburst pretreatment technology.

“Coming from Estonia, we recognise that countries rich in wood resources aren’t fully utilizing their potential, inspiring us to find solutions. With the completion of our demo plant commissioning, setting up the first commercial-scale biorefinery is our next goal,” explained Raul Kirjanen, majority shareholder of Fibenol.

“We want to make the most of local woody biomass and leverage Latvias inherent bioeconomy advantage. Latvia has demonstrated significant interest in enhancing the bioeconomy and promoting innovation growth through its supportive business environment for green technology solutions. Fibenol represents more than just one large industrial plant project; we see that in the future, the whole Baltics have the potential to lead the way for fossil-free industry models,” added Kirjanen.

Sunburst is a key-enabling technology that facilitates wood fractionation process, enabling the conversion of >90% of the feedstock into functional biomaterials that can replace fossil chemicals in the chemical and materials industries.

Knowledge-based bioeconomy is one of Latvia’s top priorities for economic development and the planned plant is proof that country can attract large-scale projects to Latvia using local resources and knowledge, said Viktors Valainis, Latvia Minister for Economics. “The Fibenol plant will also contribute to the processing of low-quality wood in Latvia, reducing the export of raw wood and providing higher added value in the timber sector,” said Valainis.

The Fibenol demo plant was set up in Imavere, Estonia. This project received support from the EU’s Horizon 2020 research and innovation programme. Total investment in the demo plant has now reached around €70 million, of which the European Union contributed almost €20 million by various research and development projects.

“Latvia’s position for the development of biotechnology is quite strong, especially in areas such as wood processing. The wood industry remains the most important segment of Latvia’s exports and ensures new investments in the region.” said Iveta Strupkāja, Acting Director General of LIAA.  “At the same time, it demonstrates that this sector is also investing significantly in research and development, developing new globally competitive products,” Strupkāja added.

The planned project stands out internationally for its role in replacing fossil chemicals with sustainable alternatives and creating globally significant lignocellulosic bioprocessing on an industrial scale, as until now, this approach has only been used in laboratories. The development of such a project allows to store carbon from low-quality wood over a more extended period, significantly reducing the emissions that fossil resources would generate.

The biomaterials produced will also drive innovation across the entire product value chain, creating new opportunities for Latvian industries to transition from fossil-based materials to bio-based alternatives.

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