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.

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.”