UPM Biorefinery Leuna

UPM is a leading global material solutions company committed to building a sustainable, innovation driven bioeconomy. Operating in 46 countries and employing roughly 16,000 professionals, UPM is active across the entire value chain of the bioeconomy. UPM contributes to the sustainable transformation of society with material solutions made from renewable feedstocks. UPM has invested in biorefining capacities as early as 2015 and will soon start-up the world’s largest bioeconomy operation with an approximately 1.3 bn Euro CAPEX biorefinery in Germany. The company has been at the forefront of scaling the industrial production of renewable alternatives to fossil-based fuels and chemicals and drives the decarbonisation of the transport and petrochemical industries. UPM is globally recognised for its strong environmental credentials, regularly ranking among the leaders in the Dow Jones Sustainability Index, SBTi, CDP and Ecovadis.

UPM has undertaken the UPM Biorefinery project in Leuna, Germany. This project stands as the largest global investment in a biorefinery for biomass-based chemicals and the largest new chemical plant investment in Europe. The facility, involving an investment of 1.33 billion EUR with a groundbreaking in 2020, aims to produce chemicals from regional beech-wood. Annually, it aims to produce 220.000 tonnes of product from sustainably certified beechwood from regional forests, including thinning wood or sawmill residues. This significant investment represents a crucial step towards replacing fossil carbon sources with renewable carbon, thereby contributing to a sustainable circular economy by being able to close material loss gaps in recycling. The UPM Biorefinery enhances regional value creation, demonstrating a positive site impact higher than traditional chemical plants. It serves as a flagship project in Germany, illustrating UPM’s leading position in bioeconomy and its commitment to establishing bio-based chemistry as an innovative growth sector, creating new, sustainable applications for wood in plastics and materials.

Potential future developments

The UPM Biorefinery in Leuna is envisioned to be a key best practice example for the future evolution of bio-based chemistry, enhancing competitiveness and meeting crucial societal needs, particularly as a “Made in Europe” innovation.

In terms of competitiveness and future investments, the project represents a significant step towards delivering biobased innovation on an industrial scale. However, further investments from the entire industry are needed to transform value chains in the chemical industry and to develop an internationally competitive, industrial sector for bio-based chemistry. Political support beyond research funding, particularly through a reliable market framework is needed. As Europe aims to lead in global sustainability and technological innovation, it must create the right framework conditions to unlock investments, drive innovation, and scale sustainable industrial solutions. Supporting the market uptake of bio-based solutions is vital to enabling growth of relevant industrial production. The EU must therefore introduce concrete policy instruments that stimulate demand and create a level playing field for renewable alternatives to fossils-based materials. This includes explicitly recognising the importance of bio-based materials and acknowledging their substitution potential in key legislation such as the Ecodesign for Sustainable Products Regulation (ESPR), the Packaging and Packaging Waste Regulation (PPWR) and the Circular Economy Action Plan. Policy needs to promote mechanisms such as quotas and incentives for bio-based options for certain end-use applications to set a clear way forward for industry development. Considering bio-based options complementary to recycled solutions is critical to fostering the replacement of fossil based materials and advancing the bioeconomy.

Current contribution

The UPM Biorefinery in Leuna makes a significant contribution to the EU bioeconomy as the largest new investment in a chemical plant in Europe and the world’s largest investment in a biorefinery for biomass-based chemicals.

• Economic and Regional Contribution: With an investment volume exceeding 1.33 billion EUR and over 200 employees, it significantly strengthens regional value creation. Annual expenditures of over 150 million EUR for materials and services, of which over 80% go to German companies and over 40% to regional companies, as well as approximately 20 million EUR in wages and salaries in Leuna, underline this. UPM Leuna is a flagship project for the bioeconomy in Germany, generating new growth through bio-based chemistry. Its positive site impact is significantly higher than that of traditional chemical plants.
• Decarbonisation and Resource Utilisation: The refinery is a crucial step towards replacing fossil raw materials with renewable primary resources. It processes sustainably certified beechwood annually from regional forests, including thinning wood or sawmill residues. This demonstrates a new, sustainable material use for wood and promotes the material use of wood over energetic use. The assortments used in Leuna have usually been used (70%) for energy purposes only. The facility closes material loss gaps in the recycling cycle and enables the renewable circular economy by converting biogenic carbon into basic chemicals and renewable plastics.
• “Made in Europe” Innovation: As a leading investment in the bioeconomy and the first large-scale plant for producing chemicals from wood, it strengthens Europe’s position as a global bioeconomy hub. It demonstrates Europe’s commitment to establishing bio-based chemistry as an innovative growth sector, creating new, sustainable applications for wood in plastics and materials. It highlights the potential for Europe to be established as a global bioeconomy hub alongside Asia and the USA.