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Cablegate: The Biofuels Picture in Finland

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UNCLAS SECTION 01 OF 02 HELSINKI 000797

SIPDIS

SIPDIS

STATE PASS USITC/L.M. SCHLITT

E.O. 12958: N/A
TAGS: TRGY ENRG SENV EAGR ECON FI
SUBJECT: THE BIOFUELS PICTURE IN FINLAND

REF: STATE 133131

1. Believing that biofuels can decrease greenhouse gas
emissions while also further diversifying its overall energy
mix, the Government of Finland is aggressively funding
programs that will create biofuels from woody biomass, fuel
peat, and recovered fuels. Finland has also begun increasing
the use of biofuels for transportation. Renewable energy
already comprises an impressive 25 percent of Finland,s
primary energy consumption (85 percent from bioenergy -
mostly wood); this figure is expected to rise to 35 percent
during the next decade. Finland has mandated that biofuels
make up 2 percent of all transportation fuels by 2008,
gradually increasing to 5.75 percent by 2010. This mandate
has created instant market demand, further fueling overall
research and development efforts by in both the Finnish
public and private sectors, including many companies in the
paper and pulp industry which seek to integrate energy
production from biomass into their overall businesses.

The Government Offers Support(
==============================

2. The Finnish Government, its public funding unit Tekes
(Finnish Funding Agency for Technology and Innovation) and
its grant recipients -- science and research organizations
such as VTT Technical Research Center and State-sponsored
universities are all players in Finland,s growing biofuels
sector. Tekes provides grants that support innovative
research and development projects conducted by companies,
research institutes, and universities. For example, Tekes is
currently supporting Biorefine, a 5-year, 140 million euro
program for research and development of biofuel technologies.
Grant recipients (i.e. VTT, University of Helsinki, private
companies) generally must publish their results for use by
the general public; this is a measure to strengthen Finland's
knowledge-based economy. In addition to Tekes funding, the
Finnish Ministry of Trade and Industry has a separate annual
budget of 9 million euros for tangible biofuel demonstration
projects. According to Minister of Trade and Industry Mauri
Pekkarinen (who holds the energy portfolio), this fund is a
strong sign to the world that significant efforts are being
put toward biofuel research and development in Finland.

(But Looks to the Private Sector for Innovation
============================================= ==

3. Finnish companies are also actively involved in biofuel
research and development, bringing a competitive element to
Finland's biofuel landscape and creating an atmosphere ripe
for networking between companies. Paper and pulp industrial
giant Stora Enso has partnered with Neste, Finland's
semi-State-owned oil company, to produce second generation
biofuels at a new facility in southern Finland. UPM-Kymmene,
another leading forest products company, is working with the
Gas Technologies Institute (GTI) in Chicago to integrate
biofuel production into the overall pulp and paper lifecycle.
As wood fuels already contribute the majority of bioenergy
production in Finland, this sort of integration between
energy companies and the pulp and paper industry is quite
natural. Tekes also offers smaller financial grants to
private companies on the condition that the companies
disclose limited general information on their findings
without having to disclose proprietary secrets.

4. (U) Listed below are various Finnish publications (in
English) on biofuels:

Publications:

EUBIONET. Solid and liquid biofuels markets in Finland. 2006.

Hermans, Raine, Kulvik, Matti, Yla-Anttila, Pekka. FINBIO
International megatrends and growth prospects of the Finnish

HELSINKI 00000797 002 OF 002


biotechnology industry. 2005.

Leppalahti, Jukka. BioRefinery State of Art Finland. 2007.

Luxmore, Crystal. Leaders of the pack; Second-generation
biofuel pioneers. 2007.

Makinen, T. IEA Bioenergy Task 42 Country Report Finland.
2007.

Makinen, T, Sipila, K, Nylynd N-O. Possibilities to produce
and use biofuels in transportation in Finland. 2005.

Neste Oil Corporation. Neste Oil and Stora Enso to join
forces in biofuel development. 2007.

Tekes. Growing Power, Renewable solutions by bioenergy
technology from Finland. 2007.

UPM. UPM and Andritz/Carbona team up for biomass based
synthetic gas production. 2007.

Websites:

Finnish Bioindustries, http://www.finbio.net/en/

Ministry of Trade and Industry - Biotechnology,
http://www.ktm.fi/?l=en&s=57

Neste Oil, http://www.nesteoil.com/

TEKES, http://www.tekes.fi/eng/

Turku Center for Biotechnology, http://www.btk.fi/

University of Helsinki - Institute of Biotechnology,
http://www.biocenter.helsinki.fi/bi/

UPM, http://www.upm-kymmene.com/

VTT, http://www.vtt.fi/?lang=en

The Embassy is happy to provide copies of any of these
materials, or additional materials, upon request.

Comment
--------

5. Finland is emerging as a leader in the development of
innovative biofuel technologies and it serves as an effective
laboratory for next generation biofuel production,
particularly from wood sources. Embassy Helsinki warmly
welcomes USITC officials to visit and learn more about
current and developing biofuel technologies in Finland.

6. (U) As requested, the primary point of contact for biofuel
issues at US Embassy Helsinki is: Glenn Lewis: (358)(9)
6162-5481 / lewisgk@state.gov
WARE

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