Chinese Kaidi plans to build a €1 billion biodiesel plant in Kemi, Finland

Kaidi, one of the largest bioenergy actors plans to build a EUR 1 billion biofuel refinery in Kemi. The planned refinery will produce 200,000 tons of biofuels per year, of which 75% will be biodiesel and 25% biogasoline. The second generation biomass plant will use energy wood as the main feedstock and it will be the first of its kind, not only in Finland but globally. Kaidi will make the final investment decision by the end of the year. The plant could be operational in 2019.

Kaidi is one of the largest bioenergy actors in China. The expansion from Asia to Europe has been many years in the making.

“We find Finland the most interesting country to invest in for biofuels production in the Northern hemisphere. Finland has vast biomass resources, plenty of potential partner companies and an extremely progressive biofuels policy,” says Chen Yilong, Chairman and Chief Executive Officer of Sunshine Kaidi New Energy Group. Chen Yilong states.

“Promoting bioeconomy and versatile use of wood are key projects for the Finnish government. In addition, ensuring foreign investments that drive export and create new jobs are also one of our key goals. We are very pleased with Kaidi’s plans and we will follow the development of this project with great interest,” comments Jari Gustafsson, Permanent Secretary of the Ministry of Employment and the Economy. Jari Gustafsson commented.

The total investment for the plant is estimated to be up to EUR 1 billion. Based on the current taxation it is estimated to bring over EUR 200 million of annual tax revenues. In addition to hundreds of subcontracting jobs, the refinery would create 150 full-time positions at the refinery once operational. Overall, the construction process will bring about an additional 4,000 man-years of work.

Final investment decision by the end of the year

The refinery would be located in Ajos, Kemi upon which Vapo originally planned to open a biorefinery but decided to withdraw from the project in 2014. Kaidi’s planned biorefinery is based on different technology than Vapo’s plan. Kaidi has acquired plans and reports related to the project’s environmental impact assessment approval from Vapo Oy.

In addition, Kaidi has received environmental impact assessment approval from the Centre for Economic Development, Transport and the Environment of Lapland and environmental permit application is well underway. Kaidi has also signed a Letter of Intent to buy 33 hectares of land from the city of Kemi.

“Bio and circular economy is a strategic key development area for the City of Kemi. The planned biorefinery showcases that Kemi is an attractive location for innovations and investments,” comments Tero Nissinen, Mayor, city of Kemi. Tero Nissinen says.

Discussions with subcontractors and other stakeholders are ongoing. The final investment decision will be made by the end of 2016. The building process would start in 2017 and the plant could be operational by the end of 2019. 

Globally unique technology

The planned second generation biodiesel refinery will prove that high-quality biodiesel can be sustainably produced from wood-based biomass. The refinery will produce biodiesel directly from wood-based feedstock and it will be the first of its kind in the world.

The biodiesel produced in the plant is cleaner and of a higher quality than first generation biodiesel. The biodiesel can be mixed with fossil diesel in any proportion, making it versatile and easy to use.