11.04.2024 - Companies, LIAA

Latvian Prime Minister Evika Siliņa welcomes new investment by the Estonian company “Fibenol” supporting the project implementation in Latvia

In March, the Estonian company Fibenol announced its intention to develop a biorefinery plant in Latvia with the total amount of investments to reach EUR 600–700 million. On April 9th, Latvian Prime Minister Evika Siliņa, when meeting with the majority shareholder of Fibenol, Raul Kirjanen, expressed support for the implementation of this project, emphasising the essential role of the industrial sector in the Latvian economy.

Prime Minister Evika Siliņa emphasised: “Fibenol is a significant investment project not only in terms of its size but also in terms of its potential impact on the economy. The project has already been granted the “Green Corridor” status, which means that various administrative issues will be dealt with at an accelerated pace. We are open to collaborating with investors and embracing new investments in our country.”

Oļegs Krasnopjorovs, Chief Economist at the Monetary Policy Department of the Bank of Latvia, points out that wood products represent the most important component of Latvia’s exports, accounting for one in six euros of Latvia’s exports – in this respect, we are European leaders. “Our comparative advantage in wood processing comes from the availability of materials, an efficient business ecosystem and skilled labour force. To balance out the use of forest as a timber resource with other interests of the public and nature protection, it is essential to use wood as efficiently as possible, minimising the share of low value-added wood product exports. We are exporting more and more sophisticated woodworking products. But we are still lagging far behind the Scandinavian countries in the manufacture of wood processing products – pulp, paper, wood chemicals and similar products. These are products with high added value, the production of which would enable the even more efficient use of Latvia’s forest resources for the purposes of raising the welfare of the country,” says O. Krasnopjorovs. 

The company Fibenol plans to build a commercial-scale biorefinery plant in Latvia to be based on its patented market-ready Sunburst technology.
Biorefining is a type of timber processing that focuses on converting biomass into functional biomaterials as wood sugars and lignin, offering sustainable alternatives to petroleum products such as phenol, bitumen and polythene, as well as ensuring raw materials for industrial fermentation processes.

This sector plays a key role in the transition towards a greener and more sustainable economy by offering alternatives to reduce dependence on fossil resources, especially in the chemical and materials industries.
 Implementing this project in Latvia provides Fibenol an opportunity to match Latvia's efforts to develop a knowledge-intensive bioeconomy, one of the priority directions of Latvia's economy, showcasing a strategic alignment that promises mutual growth and advancement. 

Pēters Putniņš, Chairman of the Board of JSC “Latvia’s State Forests” also supports the progress of this project: “The establishment of the biorefinery plant will facilitate the processing of small merchantable wood here in Latvia, thereby increasing the efficiency of forest management and improving forest care opportunities for all forest owners in Latvia. At the same time, the existence of such a plant in Latvia would reduce the export of raw wood, contributing to the more efficient use of resources in the bio-based materials sector, as well as improving Latvia’s carbon balance.”

Dr Jānis Rižikovs, Chairman of the Scientific Council of the Latvian State Institute of Wood Chemistry (LVKĶI), emphasises that Latvia has almost 80 years of experience in research to produce products with high added value, not only from wood and by-products of its processing but also from other types of green biomass. “We have six laboratories covering not only the possibilities for the processing of all biomass components (cellulose, lignin and hemicellulose) but also carrying out research in the fields of biorefining, polymer chemistry, bioengineering and wood protection. The “Fibenol” plant will not only create new jobs but also three raw material flows for further processing into high added value products,” adds J. Rižikovs.

Scientific capacity also plays an important role in the development of the biorefining industry. Riga Technical University (RTU) has already expressed its commitment to get involved in this project by providing the necessary research support.

Liene Briede, RTU Vice-Rector for Innovations: “It is essential that more and more companies – both local and foreign – develop technology-intensive production in Latvia, strengthening technology transfer and the future direction of research. In the bioeconomy value pyramid, wood materials and their products that can be used for example in pharmacy, medicine, cosmetics and food, or that can replace, for example, fossil chemicals in manufacture, have a much higher added value than using them for energy or exports in unprocessed form. Given RTU’s scientific competencies and its role in training high-level engineers, we are interested in collaborating with the Estonian company “Fibenol” in research and innovation.”

The Fibenol demo plant was established in Imavere, Estonia. The project has received support from the EU research and innovation programme Horizon 2020. Total investment in the demo plant has now reached around EUR 70 million, of which almost EUR 20 million is the contribution of the European Union.

Biomaterials produced at the Fibenol biorefinery will also contribute to introducing further innovation along the entire product value chain, creating new opportunities for Latvian industries aiming to move away from fossil-based materials and become more sustainable and transparent.

Information prepared by
LIAA Communication and Information Department
E-mail: prese@liaa.gov.lv

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