SWEDEN (News release) -- SCA and St1 have entered a joint venture to produce and sell liquid biofuels. SCA will supply tall oil to the joint venture and will invest approximately SEK 0.6 billion in the company.

The new biorefinery is under construction on the St1 refinery site in Gothenburg and will have a total capacity of 200,000 tonnes of liquid biofuels. It is designed to optimize production of renewable HVO diesel and biojet fuel and to use tall oil-based feedstock. The joint venture will have access to SCA's tall oil, a by-product from the kraft pulp production at SCA's mills in Östrand, Obbola and Munksund. The biorefinery will also be capable of using a wide range of other feedstocks and is expected to be operational in 2Q 2023.

As part of the agreement, St1 also becomes a 50% owner of SCA Östrand Biorefinery. The Östrand biorefinery project has recently received environmental permits for the production of 300,000 tonnes of liquid biofuels based on black liquor (a by-product from kraft pulp production) and solid biomass (such as sawdust or bark). The biorefinery in Östrand is a development project where a number of technological challenges remain to be solved before a project design can be finalized.