Södra confirms UPM among the first customers for kraft lignin following the major investment announcement earlier this summer regarding kraft lignin production at Södra's Mönsterås site. The plant is expected to be in operation in 2027, when it will be the first commercial kraft lignin production facility in Sweden and the largest of its type in the world.

UPM has a leading position in lignin technologies and markets based on 15 years of intensive development, which has resulted in a strong patent portfolio. Lignin applications are growing fast, driven by market demand for sustainable materials and solutions. UPM will use lignin sourced from Södra to produce more sustainable products and materials in several segments. This includes resin for the plywood and MDF industry and binders for the insulation sector.

Apart from positive performance characteristics, customers are drawn to lignin thanks to its renewable content, reduced carbon footprint and biodegradability. It is also abundant, being nature's second most common polymer after cellulose.

Södra and UPM are ideally suited to such an agreement, with Södra's access to the forest raw material through its more than 50,000 family forester members and ambition of being a raw material provider, combined with UPMs application knowledge. Södra also brings scalability, with the potential to produce up to 250,000 tpy of kraft lignin if the technology is applied to all three of its pulp mills.

"From 2027 Södra will play a major role in the growth of kraft lignin as a renewable and sustainable substitute for fossil-based materials," said Executive Vice President Södra Bioproducts Johannes Bogren. "With UPM as a customer, we will be part of a value chain which can deliver climate-effective solutions for the green transition. UPM, in turn, can trust in our responsible forestry and the low carbon footprint of our pulp mills. UPM's experience and knowledge of the sector makes it an ideal customer and we look forward to a fruitful partnership."

"Kraft lignin is a key raw material for UPM to provide commercially viable decarbonisation solutions to industrial and consumer markets. Applications for kraft lignin are expanding quickly and offer growing markets. We are excited that Södra takes the step to scale kraft lignin extraction from its pulp mills, and we believe that Södra is the ideal partner for UPM to support our own growth ambitions by providing high quality kraft lignin with an unquestionable sustainability footprint," comments Winfried Schaur, Executive Vice President Technology & UPM Biorefining at UPM.

Södra's operations in Mönsterås

Södra chose to invest in the production of kraft lignin in Mönsterås; a site with a sawmill, a competitive pulp mill, wind-power plants and its own port. A strategic choice to create great opportunities to reach international markets. The surplus energy from the pulp mill will result in a kraft lignin product with a low carbon footprint. The investment is financed with support from the Swedish Energy Agency and is part of the EU Recovery and Resilience Facility (RRF) and Next Generation EU.

By 2020, the world's first commercial biomethanol plant started operation at the site in Mönsterås and thus strengthened Södra´s position as a growing supplier of green alternatives to fossil ones, where kraft lignin is another step on this important journey.