Finland Election Winner Plans to Turn Forests into Bioenergy Gold

HELSINKI -- Juha Sipila, who once converted his own Chevrolet to run on wood-gas, is counting on the abundant Finnish forests to provide the key to an economic revival. The 53-year-old head of the Center Party, which emerged as the winner in Sunday’s Finnish election, is targeting the “bio- economy” to generate half of a pledged 200,000 jobs over the next decade.

Sipila is seeking to build on the country’s traditional pulp mills and paper factories and develop new businesses and products such as biodegradable plastics, biofuels, wood composites and construction materials. “Bio-economy combines Finnish competencies, our companies have strong know-how in chemical and metal industry as well as in logistics and digital technology,” Sipila, a self-made millionaire, said in an interview last week.

Finland, almost 70 percent covered in forest, has one of Europe’s largest resources of trees and now many are left standing as falling demand has eroded the nation’s paper industry. The demise of Nokia Oyj’s handset business has also been a blow to the economy, which has shrunk for three years. “The goal is ambitious but possible,” said Raimo Lovio, professor at Aalto University in Helsinki. “The bio-economy is not only a question of raw materials like wood, but it also includes technology and software which can be exported.”

Pulp Mill

One project already under way that will further Sipila’s goals is in Aanekoski, where Metsa Group is building a 1.2 billion-euro ($1.3 billion) bioproduct mill to produce mainly pulp and energy. Metsa Group gave the project the go-ahead on Tuesday and said the mill and businesses related to it will create 1,500 new jobs once completed in 2017. The investment will increase Finnish exports by about 500 million euros per year, it said.

Sipila is building on a bio-economy strategy from the outgoing government. He has also proposed a new 1.5 billion-euro state fund to finance startups and innovation across industries. “We’re ready use the money we get from selling state’s property to boost this instrument,” Sipila said. “We must always give priority to private financing but there’s also need for public money. There are some bottlenecks that must be fixed.”

These include lack of private financing to test innovations and difficulties in reaching new markets, according to Christine Hagstrom Nasi, who heads the Espoo-based Fibic research network. Sipila has also shown himself example of innovation. Besides campaigning in a wood-gas fired El Camino in 2011, he also in 2008 participated in a housing development in his home town of Kempele that uses only wood chips to fill its energy needs. “Sipila is certainly more aware than the current prime minister of how this industry works,” Lovio said.

Copyright 2015 Bloomberg

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