Innovation

UPM BioVerno is the first diesel biofuel and has been being produced in UPM Kaukas mill in Finland since 2015. The raw material for UPM Bioverno production is crude tall oil, which is a residual of pulp production, one of UPM’s main activities.

UPM Bioverno diesel is a substitute for fossil fuel. It could be blended with fossil diesel or used separately and does not require changes in vehicle engines or fuel distribution systems. More than that, it does not compromise engine power.

UPM Bioverno fuel is a renewable source of energy. In addition to that, it allows to decrease greenhouse gas emissions by 80% compared to fossil diesel, as it is a wood-based product.

UPM BioVerno was originally produced from UPM’s own by-products. Now the company buys tall oil from other suppliers as well, processing their residuals and helping them to become more sustainable. What is also important it does not have an impact on food supply chain as it is wood-based.

Now UPM BioVerno diesel is widely spread in Finland. The diesel fuel containing 30% of UPM BioVerno diesel can be found at many gasoline stations all over the country. This fuel is also commonly used for public buses and ships.

Inspiration

It was not a sudden idea to turn a sub-product from one of UPM’s main activities – pulp production – into a separate and profitable business. In fact, this innovation was driven by the company’s dramatic change in strategy back in 2009 due to the transformations in the business environment globally. The company’s management took into account the global trends such as scarcity of natural resources, climate change and growing number of middle class consumers that will demand more energy, food and goods. At the same time, this demand is no longer the same: customers are moving towards responsible and conscious consumption.

Being a large company from Finland, a country that is rich in forest resources, UPM has been expected to propose an answer to global problems and new demands. As Natalia Malashenko explained, UPM moved to a profoundly new way of doing business: “We are sure that the circular economy and re-using of products can be a solution to this global growing consumer demand”.

Hence, one of the company’s major goals is to go beyond traditional forest industry products, namely pulp and paper, and become a responsible and sustainable company. As a result, UPM’s R&D department, with the help of hackathons and local “Innovation Hub”, started to look for innovations that would be based on the company's products and fit its new strategic aims. UPM BioVerno fuel became one of such solutions.

Overall impact

The logic behind UPM BioVerno is that it is suitable for the current automotive industry. This innovation is not a disruptive one, which often needs alterations of infrastructure like, for example, electric cars. “This is a more sustainable innovation, replacing one product by another... You can still drive your car, but you will know, and will be pleased, that it does less harm to the environment,” points out Natalia Malashenko.

Furthermore, UPM Bioverno diesel is available at an affordable price. It is the same as for the ordinary diesel fuel. It allows people to make their own consumption much less harmful with a little effort.

UPM BioVerno as an innovation is intended to be an answer not only to the current needs, but also to some of the future challenges. Natalia claims that BioVerno diesel is a good solution for humanity’s future needs, when there will a shortage of non-renewable oil.

Finally, creation of biofuel opened a totally new field of development for UPM. Natalia mentioned that “UPM is now considering building the second biofuel plant, with a different technology, not only tall oil, but different kind, also wood-based”.

Business benefit

UPM BioVerno is the first illustration of the company’s successful step towards realization of its new strategy. The success story of the innovation, which had proved to be both sustainable and profitable, has been spread beyond the Finnish mill all over the company.

“Our people started to understand that we can move forward with a strategy, that we can create new innovative products that have not existed before. Employees feel more secure within the company, sure about its future and their future in the company,” says Natalia. It inspired employees at all levels, that such a huge transformation could be made and they could be a part of it. According to Natalia, the results of UPM’s annual employee engagement survey reflected that percentage of engaged people in 2015 was much higher compared to 2009, when the new strategy was announced.

Naturally, other stakeholders were impressed by thе innovation. “Our shareholders now believe in our company’s future, as they see that the company can innovate, implement innovations and make them profitable. They can be sure that their money are secured”, says Natalia.

Another point is that UPM entered the fuel market and was the first to employ a biodiesel production. Because of the product's popularity and popularity of sustainability in general, competitors were highly motivated to catch up. Thereby, such huge oil market players as Neste moved towards bio fuel production. “Actually, Neste also produces bio diesel. I am sure that our competitors will follow. It is just a matter of time of implementing a new technology,” believes Natalia.

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Social and environmental benefit

UPM BioVerno allows to reduce the amount of CO2 emissions, improving people's health and decreasing the overall negative impact of CO2 emissions. “In big cities people now feel pollution. If public transport could decrease it, it would be great for the citizens' wellbeing”, says Natalia. “There were several tests of Bioverno on buses, approving that this bio diesel is reducing their emissions”, points out Natalia.

The impact of every company’s innovations is measured in terms of achieving certain SDGs on an annual basis. UPM Bioverno proves that a company can contribute to achieving a number of different SDGs simultaniously.

Interview

Natalia Malashenko, Stakeholder Relations Director