Vapo Oy freezes the Kemi biodiesel project

The Board of Directors of Vapo Oy today made the decision to freeze project planning for the biodiesel plant planned for Ajos in Kemi.

Vapo Oy and Metsäliitto launched a project to build a biodiesel plant in Finland in 2007. Metsäliitto withdrew from the project in the summer of 2012, and after that Vapo Oy has alone been preparing the project. The aim was to establish a plant in Ajos, Kemi, which would have produced approximately 150,000 tonnes of high-quality second generation biodiesel and its byproducts for the needs of traffic from logging waste and stem wood. In the summer of 2012, the project received a commitment for support of EUR 88 million from the EU if the project were realised. Vapo’s biodiesel project has engaged 7 permanent employees of the Group. The company will immediately launch an investigation into the personnel effects of the interruption of the project.

Vapo Oy has actively searched for both operational partners and external financiers to implement this project of an estimated EUR 700 million at the same time as it has prepared the actual plant design. According to Vapo’s Managing Director Tomi Yli-Kyyny, the project raised a great deal of interest even internationally, but obtaining binding long-term partner agreements did not succeed due to the increased uncertainty of the operating environment. According to Yli-Kyyny, the decision-making of customers, investors and partners has been made more difficult in recent months by the increased uncertainty concerning the legislation on renewable fuels under preparation in the European Union and the lengthened legal drafting. The final, decisive blow to the project was that the EU’s climate and energy strategy published in January did not agree on new binding limits for the share of the renewable component in traffic fuels after 2020. “In this situation it is not possible to conclude long-term commitments, which would have created the financial preconditions for Vapo’s biodiesel project,” says Yli-Kyyny.

However, Yli-Kyyny particularly wishes to thank the government of Finland, which has in various ways participated in promoting the project and obtaining financing at all stages of the project. According to Yli-Kyyny, the decision is regrettable from the point of view of both the company itself and the cooperation parties and personnel who participated in the project. “We attempted to take the project forward with all available means for as long as we could, but in the current situation we had no other alternative but to interrupt,” says Yli-Kyyny.

Further information:
· Tomi Yli-Kyyny, Managing Director, Vapo Oy, tel. +358 (0)20 790 5605
· Susanna Terhivuo, Financial Manager, Forest BtL Oy, tel. +358 (0)20 790 6544
· Ahti Martikainen, Director, Communications and Public Affairs, Vapo Oy, tel. +358 (0)20 790 5608