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Finnish oil production plant good to go

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Staff writer ▼ | April 10, 2014
Fortum PowerThe European Commission has found that Finnish plans to grant Fortum Power 8.1 million euros investment aid for a pyrolysis oil production plant in Joensuu, Finland, are in line with EU State aid rules.

Pyrolysis oil is a bio-liquid and can be used as a cleaner substitute for heavy fuel oil. The Commission has concluded that the aid will further EU energy and environmental goals, such as reducing CO2 emissions, without unduly distorting competition in the Single Market.

Commission Vice President in charge of competition policy Joaquín Almunia said: "Pyrolysis oil provides a very good alternative to heavy fuel oil. It can be used in existing oil boilers with only small alterations, giving heat producers a clear incentive to switch to cleaner fuels. The proposed aid measure thus contributes to EU goals to reduce CO2 emissions."

In 2012 Finland notified plans to support the construction of a pyrolysis oil (bio-liquid) production in an existing heat and power plant in Joensuu. The facility will be built by the Finnish company Fortum Power and Heat Oy. Pyrolysis oil can be used in heating boilers as a substitute for heavy fuel oil and thus could reduce the yearly CO2 emissions by 59 000 tonnes and SO2 emissions by 320 tonnes.

The production is based on a so-called fast pyrolysis process, where biomass is converted into bio-oil. The plant will be integrated into an already existing Fortum Power combined heat and power plant, and will be the first of its kind in the world. The integration will increase the overall efficiency of the process.

The Commission assessed the measure under the 2008 EU environmental aid guidelines. The most important impact of the investment is that it facilitates fuel switch in existing oil boilers – the previously fossil energy based heating will be much more environmentally friendly, especially in terms of CO2 emissions, through use of pyrolysis oil.

The plant also contributes to increasing the security of energy supply and diversifying energy supply sources. The Commission therefore concluded that the positive effects of the aid offset any potential distortions of competition brought about by the state support.

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