Norske Skog: New growth opportunity in bioenergy

Norske Skog plans to build biogas facilities at its mills, utilizing bio-waste from the paper production to renewable energy.

Norske Skog Saugbrugs will invest NOK 150 million in construction of a biogas facility in connection to its effluent plant. The biogas facility will contribute to gross operating earnings in 2016 and be at full run-rate contribution in 2017.

- We are planning to commercialize bio-waste from raw material into gas at our mills. Despite challenging markets, we believe that our mill sites are sustainable, and will strengthen their competitiveness by constructing biogas facilities. Our new growth area will be a new main business leg named Nature's Flame, says Sven Ombudstvedt, President and CEO of Norske Skog and chairman of the board of Norske Skog Saugbrugs.

Enova has granted NOK 52 million in support to the project, while Sparebank 1 Gruppen and Halden Municipality's pension fund has provided about NOK 100 million in debt financing. Norske Skog plans to build biogas facilities at its mills, utilizing biowaste from the paper production process to renewable energy. Norske Skog is currently considering replicating the project at its other mills.

- An onsite biogas facility brings twofold economic benefits; a new biogas revenue stream and reduced paper production costs. Biogas is further a renewable alternative to fossil fuels, which forms part of the carbon solution. Moreover, biogas has large potentials in improving urban air quality, says Sven Ombudstvedt, President and CEO of Norske Skog.

AGA will be the main purchaser of biogas from Saugbrugs. AGA has been supplying biogas to heavy vehicles since 2008. AGA supplies 550 buses and trucks with biogas from filling stations every day.

- The agreement with Norske Skog Saugbrugs represents a positive addition for renewable fuels in the county of Østfold, Norway. The volume of biogas covered by the agreement will be able to supply biogas to a fleet of 70 heavy vehicles and a reduction in CO2 emissions of about 6,500 tons annually, says John Melby, Manager Clean Energy at AGA AS.

The investment in the biogas business will strengthen the entire mill site's competitiveness and be part of Norske Skog's efforts to improve operations at its remaining mill sites.

- Bioenergy can play an important role in the transition to a more environmental friendly transport sector, and availability of bioenergy must be increased. Therefore, we find it great that Norske Skog Saugbrugs will utilize sewage sludge from paper production to produce biogas. Buses and refuse trucks in Østfold will now be able to use climate-friendly biogas made from waste products from Norske Skog. We wish to see more of this type of energy utilization. Hopefully, several other mills in the Norske Skog group will adopt similar solutions, says marketing director Audhild Kvam in Enova.

Norske Skog Saugbrugs has 500 employees. The mill has an annual production capacity of 500 000 tonnes of magazine paper.

Oslo, 16 July 2015