UPM has announced it will discontinue the development of its proposed second biomass-to-fuels refinery at the Port of Rotterdam. The decision follows an extensive technical, commercial and strategic evaluation. As a result, the company will cease all engineering work related to the capital expenditure investment in the Rotterdam project and will withdraw from all associated site commitments.

The move reflects UPM’s sharpened focus on more strategic growth avenues within its biofuels business. Rather than pursuing new refinery construction in Rotterdam, UPM plans to concentrate its efforts on enhancing existing operations, developing innovative feedstock technologies, and expanding into high-value renewable fuel markets such as aviation.

Despite stepping away from the Rotterdam investment, UPM remains committed to growth in renewable fuels. The company is actively advancing proprietary technologies that aim to expand the variety of sustainable and competitive biomass feedstocks available for fuel production. UPM is also continuing its work to qualify and commercialize biofuels derived from Crude Tall Oil (CTO), particularly for use in aviation, where demand for sustainable alternatives is growing rapidly.

“Renewable fuels and renewable chemicals are at the core of UPM’s long-term growth strategy for decarbonization,” said Harald Dialer, executive vice president of UPM Biorefining and Technology. “Our biorefinery in Lappeenranta will remain the nucleus of our growing biofuels platform, serving as the foundation for innovation and future expansion.”

Aligned with this strategic direction, UPM has identified three key areas for targeted growth within its biofuels business:

•             Lappeenranta Biorefinery Optimization: UPM is evaluating the potential to debottleneck operations at its Lappeenranta biorefinery. The goal is to unlock low-capex capacity expansion opportunities, thereby increasing production efficiency and meeting rising demand for CTO-based biofuels, which have demonstrated strong market performance.

•             Sustainable Aviation Fuel (SAF) Development: UPM is accelerating efforts to enable the use of its CTO-derived biofuels as certified Sustainable Aviation Fuel. The company has completed successful SAF trials in partnership with Austrian aircraft manufacturer Diamond Aircraft and its Austro Engine propulsion system. Additionally, UPM is progressing through the technical certification process with the American Society for Testing and Materials (ASTM), with consistently positive results and stakeholder feedback.

•             Feedstock Innovation and Diversification: UPM is continuing research and development in feedstock technology to qualify and enable additional forms of competitive, sustainable biomass. This will support the cost-effective production of high-quality biofuels suitable for both road and aviation applications, enhancing the resilience and scalability of its biofuels supply chain.

“We continue to see robust long-term market potential for biomass-based fuels, particularly in Europe, where climate commitments are driving demand for renewable alternatives to fossil fuels in transport,” said Dialer. “With access to strategic feedstocks, superior greenhouse gas reduction performance, and strong regulatory alignment, UPM’s biofuels portfolio is well-positioned for scalable, sustainable commercial growth.”

By realigning its strategy and focusing on technological innovation, UPM aims to remain a leader in the renewable fuels sector while advancing global decarbonization goals.