Helsinki, Finland, 08 June 2009  –  Metso and UPM have developed a new concept for the production of biomass-based bio-oil to replace fossil fuels in heating and power generation. Test production will begin at Metso's test plant in Tampere, Finland, in June 2009.

Bio-oil can be manufactured by UPM's renewable energy power plants that are equipped with a suitable boiler and functional raw material management. The raw material of the bio-oil is wood biomass – harvesting residues and sawdust, which is a by-product of the forest industry. Combining bio-oil production to an existing biomass-based power plant creates significant cost and efficiency advantages, as well as new business.

Metso and UPM have developed the bio-oil production concept in cooperation with the Technical Research Centre of Finland (VTT) and with funding of the Finnish Funding Agency for Technology and Innovation (Tekes). The technology used in combined bio-oil and renewable energy production is patented. It can be seen as continuation of the combined heat and power production concept developed in Finland.

The advantage of the carbon dioxide-neutral bio-oil produced from renewable raw material is its remarkable effect on the reduction of greenhouse emissions. Currently, several parties around the world are researching possibilities to further process bio-oil into fuel for motor vehicles.

"UPM actively investigates new business opportunities within the second generation biofuels based on nonfood raw materials. Development of the production technology for forest energy based biodiesel is proceeding. We are currently investigating which of our mills in Finland or in other countries would be a suitable location for a biorefinery planned for biodiesel production. The environmental impact assessment of a biorefinery is ongoing in Kuusankoski and Rauma in Finland," said Petri Kukkonen, UPM's director for biofuels .

"In addition, we are testing an ethanol and energy production concept utilizing fiber-based commercial and industrial waste. Bio-oil fits well in UPM's biofuel portfolio. This project is a good example of the cooperation of the Finnish forest industry cluster," Kukkonen said.

Biodiesel, bioethanol and bio-oil are biofuels produced with various methods from renewable raw materials. Currently biodiesel and bioethanol are generally used in traffic fuels whereas bio-oil is used in heating and power generation.

UPM is one of the world's leading forest industry groups. UPM consists of three Business Groups: Energy and pulp, Paper, and Engineered materials. The company's competitiveness is based on cost leadership, change readiness, and leading innovation. The Group employs around 24,000 people and it has production facilities in 14 countries. In 2008, UPM had sales of EUR 9.5 billion. UPM's shares are listed on the Helsinki stock exchange. Additional information is available at www.upm-kymmene.com.

Metso is a global supplier of sustainable technology and services for mining, construction, power generation, automation, recycling, and the pulp and paper industries. The company has more than 28,000 employees in more than 50 countries. Additional information is available at www.metso.com.