June 25, 2024 (Press Release) - As a step in the strategy of getting more out of every tree, Södra is now establishing a new business to become a world leader in the production of kraft lignin. Södra's production facility will be the first commercial facility in Sweden and the largest of its kind in the world. This is an investment of over two billion SEK and expected to be in operation in 2027.

Kraft lignin can replace fossil materials in, among other things, glue, batteries, rubber, composites and form the basis for new biofuels and biostimulators. The market and demand for replacements for fossil chemicals are increasing and Södra has for some time been exploring the opportunities on the market, had dialogue with potential customers and signed offtake agreements for a significant part of the production volumes. There is good possibility for kraft lignin production both to contribute to the green transition and the profitability of the forest estate.

"The forest is being called on for many things as society seeks to replace fossil-based materials. To succeed in that transition, sustainability and profitability need to go hand in hand and Södra's kraft lignin investment is a good example of that. We will make more out of every tree and strengthen our profitability. This is a big investment for Södra and the green transition," says Lotta Lyrå, CEO of Södra.

Today, lignin is used for generating energy, but the refining process Södra is investing in will make more use of the raw material as a product. This is in line with Södra's strategy to make more of each tree and create more value for the forest estate.

"Innovation is a necessary and important part of our business to ensure our competitiveness today and in the future. We are constantly working to create the most possible value from each tree, both with today's processes and through new opportunities. Within Södra's strategy, we see several future energy and chemical products with great potential as alternatives to fossil-based materials in society, of which kraft lignin is one," says Catrin Gustavsson, Executive Vice President at Södra Innovation.

"With kraft lignin in our product portfolio, we are strengthening our position as a supplier of sustainable alternatives. Södra has seen potential in kraft lignin production for a long time. Now that we see growing market interest, we can offer a product that contributes to the green transition," says Johannes Bogren, Vice President, Södra Bioproducts.

Södra's new facility will have the largest capacity for kraft lignin production in the world. Production is planned to start in 2027 and is enabled through the Swedish Energy Agency and The Industrial Leap.

What is Lignin
Lignin is the component of the forest raw material that holds the fibres together and ensures that trees are strong and stable. In separated form, lignin is a brown powder. In chemical language, lignin is a biopolymer comprising a series of interconnected aromatic compounds. Södra has for many years collaborated with, and supported, research on lignin and has extensive knowledge about lignin and the opportunities it brings.

In the pulp cooking phase, lignin is released so that the fibres can be released and become pulp or dissolving pulp. This means that large amounts of lignin are created at the mills and that part of the lignin can be separated and become a product. Today, lignin generates steam and electricity to operate the mills, of which a surplus is sold to the public power grid.

What is "Industriklivet" (Industrial Leap)
The Swedish Parliament has adopted the climate goal that Sweden should reach net zero emissions of greenhouse gases into the atmosphere by 2045, and then achieve negative emissions. Large and complex technological leaps by several industries will be needed to achieve this. To support the transition, the Government has decided on a long-term investment approach called Industriklivet (Industrial Leap).

Since 2021, Industriklivet has been part of the green transition to a climate-smart society after the COVID-19 pandemic and is part of the EU's Recovery and Resilience Facility (RRF). RRF is an element of Next Generation EU that, among other things, will contribute to a more environmentally friendly EU, better adapted to current and future challenges.

Södra is now the largest forest-owner association in Sweden, with more than 50,000 family forest owners as members. Together, the members of Södra own a world-leading industrial operation that processes forest raw material into renewable products such as pulp, timber, building systems, liquid bioproducts and energy.

Source: sodra.com