Browsing by Author "Afrin, Tania"

For 80 years, Pine Chemical Industries have used Crude Tall Oil (CTO) for a wide range of products. To fulfil the climate goal, the European Union (EU) has changed its policy by subsidizing renewable sources, which in turn has promoted CTO as a resource for biofuels. Also, Finland has followed the EU by setting the target for 2020. This research aims to analyze the role of CTO in Finnish bio-economy by focusing on the market dynamics and value network between biofuel and pine chemical industry after the new EU regulation. In addition, it forecast the optimal future end use market. The empirical study is based on qualitative data from five interviewees representing a forest company, two biochemical companies, a research institute and a consulting firm. This study showed that the double carbon benefit supported the increase in demand of CTO. The import also increased to produce biodiesel. In addition, biofuel companies have more purchasing power. Also, decrease in export and price fluctuation has been observed. Strategically, this has directed the biochemical companies to decrease their fixed costs. UPM, Forchem and Kraton are the key players using more than two times CTO where one fourth is used for biodiesel. If available enough, both sectors will have an impact on Finnish bio economy. The double counting has helped Finland to reach EU renewable energy quota for traffic fuel distribution. However, this study also showed that it is not beneficial to invest heavily based on subsidies. Both Biofuel and Biochemical Companies should consider CTO as a competitive product even without the subsidy. It is resource-efficient to use the functionality of the molecule and long value chain to produce diversified product. There should also be room for R&D and innovation. It is for example possible to produce biodiesel from other sources including waste and animal fat. If there is scarcity, then it would be wiser to produce biochemicals rather than biodiesel for maximum economic benefit. New holistic regulations are needed from Finnish authorities. The policy should consider equal access to the raw material, the higher value of the product, free market mechanism without any distortion, stable and balance operating environment for all its bio-based industries. Consumer awareness and motivation should be increased. Cross-industry collaboration, networking and integrating is also essential. Overall, co-operation rather than competition is needed from both biochemical and biodiesel sides.