The project is expected to reach a total value of €600m–€700m. Credit: Fibenol.

Estonia-based Fibenol has signed a memorandum of understanding (MOU) with the ministries of economy, agriculture, climate and energy and the Investment Agency of Latvia to build a biorefinery in the country.

The company, which focuses on sustainable biomaterials, will invest a total of €600m–€700m in the new project. The biorefinery will enable the conversion of more than 90% of the feedstock into functional biomaterials to replace fossil chemicals, as well as store carbon from low-quality wood to reduce emissions.

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As part of the new project, company representatives from Fibenol had been visiting several Latvian municipalities to determine the site for the facility.

According to Raul Kirjanen, Fibenol’s majority shareholder: “Latvia has demonstrated significant interest in enhancing the bio-economy and promoting innovation growth through its supportive business environment for green technology solutions.

“Fibenol represents more than just one large industrial plant project; we see that in the future, the whole Baltics have the potential to lead the way for fossil-free industry models,” Kirjanen added.

The Estonian company has so far managed to attract €70m for the proposed biorefinery, with €20m coming from the EU. In addition, it has received support in the past from EU’s Horizon 2020, a research and innovation programme with a budget of nearly €80bn between 2014 and 2020.

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Viktors Valainis, Latvia’s Minister for Economics, also commented: “Knowledge-based bio-economy is one of Latvia’s top priorities for economic development, and the planned plant is proof that we can attract large-scale projects to Latvia using local resources and knowledge. The Fibenol plant will also contribute to the processing of low-quality wood in Latvia, reducing the export of raw wood and providing higher added value in the timber sector.”