The production site will be St1’s refinery in Gothenburg, Sweden.
The objective of the partnership is to construct a 100,000 tons per annum facility to produce advanced renewable fuels from tall oil.
The new facility is expected to cost around SEK500m ($57.8m), subject to permission process and final approval from both companies, and is planned to be operational in 2021.
Tall oil is a residual product during the manufacture of kraft pulp at SCA’s mills Östrand, Obbola and Munksund.
SCA is currently expanding its kraft pulp mill Östrand due to which the production of tall oil from the mill will increase by more than 100%.
St1 board chairman Mika Anttonen said: “Partnership with SCA is a key element in implementation of our renewable fuels investment program and it secures supply of raw materials to meet the ambitious Nordic climate targets for 2030.
“SCA works with a number of interesting development projects in renewable energy, and we see interesting opportunities to further develop the cooperation.”
SCA president and CEO Ulf Larsson said: “When we start working on more refined energy products, partnership with a company that knows the processes and the market, is very valuable.
“St1 is a company with the ambition to work with us in the change towards renewable fuels.”
St1 Nordic, which develops economically viable, environmentally sustainable energy solutions, focuses on fuel marketing, oil refining and renewable energy solutions such as waste-based advanced ethanol fuels and industrial wind power.
SCA’s core business is the forest in northern Sweden. It has built a value chain based on renewable raw material from the forests.
The company offers paper for packaging and print, pulp, wood products, renewable energy, services for forest owners and efficient transport solutions.
