Biogas in the Nordic forest industry: current state and future business potential

The forest industry is of great importance to the Nordic countries in terms of exports and employment. Today the industry faces tough challenges related to future higher energy prices, increased competition for wood raw material, and a declining demand for traditional paper products. However, there are also possibilities related to the transition to a bio-based economy. This paper focuses on one such avenue, the business potential in using wastewater from pulp and paper mills as a basis for biogas production. The paper identifies biogas plants at Nordic mills currently operating or under construction and, positions the mills according to their decisions on how to engage in activities related to biogas production and use. Requirements for and consequences and of the different positions are discussed in terms of resources and capabilities, governance, and strategy focus. The paper shows that cost reduction is an important driver for biogas production in the pulp and paper industry, but public financial support is needed to justify the investments. Since forest firms do not view biogas production as a core business activity, external actors that can offer turnkey solutions or runt the operations may be needed to facilitate biogas production in the forest industry. While internal use of gas is an option for some mills, it is evident that external demands for biogas, i.e. as vehicle fuel, differ in the three different Nordic countries. In Norway, whose forest industry is the least significant of the three countries, the situation for external use seem to be the most promising, emphasizing the role of public policy interventions in the transport sector for the development of biogas in the forest industry.