Norske Skog, Oslo, Norway, announced this morning it plans to build biogas facilities at its mills, utilizing bio-waste from paper production to convert to renewable energy. Norske Skog Saugbrugs will invest NOK 150 million in construction of a biogas facility in connection to its effluent plant. The biogas facility will contribute to gross operating earnings in 2016 and be at full run-rate contribution in 2017.

 

The group stated the following reasons behind their considerable investments in this sector:

•  Norske Skog is already planning to commercialize bio-waste from raw material into gas at their mills. Despite challenging markets, we believe that our mill sites are sustainable, and will strengthen their competitiveness by constructing biogas facilities. The new growth area will be a new main business leg named Nature's Flame, said Sven Ombudstvedt, President and CEO of Norske Skog and chairman of the board of Norske Skog Saugbrugs.
• Enova has granted NOK 52 million in support to the project, while Sparebank 1 Gruppen and Halden Municipality's pension fund has provided about NOK 100 million in debt financing. Norske Skog plans to build biogas facilities at its mills, utilizing biowaste from the paper production process to renewable energy. Norske Skog is currently considering replicating the project at its other mills.
• An onsite biogas facility brings twofold economic benefits; a new biogas revenue stream and reduced paper production costs. Biogas is further a renewable alternative to fossil fuels, which forms part of the carbon solution. Moreover, biogas has large potentials in improving urban air quality, says Sven Ombudstvedt, President and CEO of Norske Skog.
• AGA will be a main, reliable purchaser of biogas from Saugbrugs. AGA has been supplying biogas to heavy vehicles since 2008. AGA supplies 550 buses and trucks with biogas from filling stations every day. The agreement with Norske Skog Saugbrugs represents a positive addition for renewable fuels in the county of Østfold, Norway. The volume of biogas covered by the agreement will be able to supply biogas to a fleet of 70 heavy vehicles and a reduction in CO2 emissions of about 6,500 tons annually, said John Melby, manager of clean energy at AGA AS.
• The investment in the biogas business will strengthen the entire mill site's competitiveness and be part of Norske Skog's efforts to improve operations at its remaining mill sites.Bioenergy can play an important role in the transition to a more environmental friendly transport sector, where availability of bioenergy must be increased. Corporate leadership believe that Norske Skog Saugbrugs will be able to effectively utilize sewage sludge from paper production to produce biogas.

Norske Skog Saugbrugs has 500 employees. The mill has an annual production capacity of 500 000 tonnes of magazine paper.