Fibenol OÜ, an Estonian enterprise, has announced a substantial investment of €700 million towards the development of a biorefinery in Latvia, signaling a significant leap in the bioeconomy sector. Despite the initial consideration of Estonia for its plant location, as indicated by major shareholder Raul Kirjanen in 2022, the company has decided to proceed with Latvia for its venture.
On March 15, an agreement was formalized between Fibenol and several Latvian ministries, including those responsible for economy, finance, agriculture, climate, and energy, alongside the Investment and Development Agency of Latvia (LIAA). This memorandum paves the way for a projected investment ranging between €600-700 million.
Raul Kirjanen, highlighting the venture, stated, "Originating from Estonia, our observation of the underutilization of abundant wood resources in similar countries propelled us to seek innovative solutions." He further emphasized the company's ambition to capitalize on Latvia's robust bioeconomy potential and its favorable environment for green technology, envisioning a future where the Baltic region sets a precedent for sustainable industrial practices.
Fibenol plans to introduce its commercial-scale biorefinery in Latvia, utilizing its proprietary Sunburst pretreatment technology. This groundbreaking technology optimizes the wood fractionation process, allowing up to 90% of the wood input to be transformed into valuable biomaterials. These materials aim to replace fossil-based chemicals in various industries, contributing significantly to the reduction of environmental footprints.
Viktors Valainis, the Latvian Minister for Economics, voiced his support, acknowledging the alignment of Fibenol's initiative with Latvia's economic development goals. The establishment of the Fibenol plant not only leverages local resources but also enhances the timber industry by adding value and reducing raw wood exportation.
Fibenol has already demonstrated its commitment to innovation with a demo plant in Imavere, Estonia, supported by the EU's Horizon 2020 program. With a total investment reaching €70 million, including significant EU funding, the project showcases the potential for sustainable industrial applications.
LIAA's acting director general, Iveta Strupkāja, expressed enthusiasm for Fibenol's decision to establish its production in Latvia, highlighting the strategic importance of the wood processing industry and the nation's supportive business landscape for such ventures.
The Fibenol project stands as a pioneering effort internationally, transitioning from lab-scale processes to industrial-scale lignocellulosic bioprocessing. This initiative not only offers a sustainable alternative to fossil-based materials but also fosters innovation across various industries, encouraging a shift towards bio-based solutions in Latvia.
Looking ahead, Fibenol seeks additional financing, including innovation grants from the European Union Innovation Fund, to ensure the project's success and mitigate risks.
The memorandum of cooperation marks a significant milestone, reflecting the culmination of extensive collaboration between Fibenol and various Latvian stakeholders. This agreement signifies confidence in the project's future and its potential to revolutionize the industry towards more sustainable practices.