Preem, Sveaskog and Södra are to become joint-owners of SunPine AB. This will enable a major investment in Sweden in the production of pine diesel, a renewable motor vehicle fuel based on tall oil, which may eventually replace fossil fuel. Sunpine invests MSEK 250 in a first plant in Piteå which starts producing during the last quarter of 2009. Sweden will be the first country in the world to produce green diesel from timber raw materials on an industrial scale.
Preem, Sveaskog and Södra have signed an agreement to acquire approx. 60 percent of the shares in SunPine AB. The investment will be carried out via a new issue in SunPine. Approximately 40 percent of the shares in SunPine will be held by Kiram AB, which in turn will be owned by the contractor, Lars Stigsson who has also founded the business.
The investment will entail that within a period of two years, the market will be offered a renewable motor fuel that will not generate a net discharge of fossil carbon dioxide. Consequently, Sweden will be the first country in the world to produce green diesel from timber raw materials on an industrial scale. The potential is great and several production plants may be established both in Sweden and abroad.
Sunpine will produce pine diesel originating from tall oil, which is a by-product from the timber industry's pulp process. The pine diesel will be processed to high-quality diesel that fits all diesel motors. Pine diesel is considered to be the second generation of renewable diesel. All raw materials come from the forest and consequently the process will not compete with food production.
The production of pine diesel oil will take place in a new plant in Piteå harbour. The plant in Piteå will be in commission during the last quarter of 2009 and will produce up to 100,000 m3 of pine diesel oil per year. This will cover the fuel requirements of 100,000 diesel vehicles driving on average a little more than 10 000 kilometers per annum.
The investment in the Piteå plant will amount to approx. MSEK 250. SunPine has signed an agreement with Södra and a number of other timber industry companies to purchase tall oil for production in Piteå. The pine diesel will be processed at Preem Petroleums refinery in Gothenburg.
A by-product during the production of pine diesel in Piteå will be oil from tall oil pitch, which can be refined to much sought-after chemicals within the food and pharmaceutical industry. Among other things, Beta-Sitosterol can be produced, which is used in cholesterol-reducing foodstuff and for manufacturing hormone-based medicines.
Advisor to SunPine was Handelsbanken Capital Markets.