Outokumpu collaborates with Envigas for large-scale production of high-quality biocarbon

Finnish Outokumpu, the global leader in sustainable stainless-steel, invests 9,9 MEUR in Swedish Envigas and becomes one of the company's major shareholders with a 20% ownership.

The two companies are establishing a close collaboration for the long-term development of large-scale production of high-quality biocarbon from the residual products of the forest- and wood-products industry, which form part of the natural carbon cycle. Outokumpu invests in green transformation and has the ambition to further decarbonize its stainless-steel production. The use of new, biomass-based raw materials is an important component in this journey. The goal for 2030 is a 42% reduction of the company’s CO2-emissions from the baseline of 2016.

Long-term transition for fossil-free production

 Envigas, with a first production facility in Bureå outside Skellefteå, is one of Europe’s first companies to invest in large-scale production of high-quality biocarbon and with a pronounced focus on deliveries to the steel industry. Biocarbon, which is produced by pyrolysis of biomass, can replace fossil coal and coke in the different production processes in the production of stainless steel and thus contribute to the reduction of carbon footprint. Therefore, the new raw material is a key enabler in the transition towards a fossil-free and greener production.

“Several companies in the steel industry have since long validated Envigas biocarbon with good results, says the company’s CEO, Lars-Gunnar Almryd. Since its inception, Envigas has built significant competence in the area, which has been appreciated by industries throughout Europe”, Almryd further says.

“The move towards using new types of biomass-based raw materials is a concrete step forward to significantly reduce our direct emissions, which account for approximately 25% of Outokumpus total emissions. We have successfully conducted production tests with biocarbon and biocoke and look forward to increasing the use in the future”, says Timo Huhtala, General Manager responsible for Outokumpus biocoke initiative.

In connection with the investment, Envigas enters into a long-term supply agreement with Outokumpu, which means that Outokumpu is guaranteed at least 50% of Envigas current and future production volumes from the first phase of the company’s expansion. The company is planning for an expanded production, with the goal of achieving additional capacity of approx. 25,000 tons of biocarbon by the end of 2026. The investment also creates a need for several new hires in the northern Swedish region of Västerbotten.

The owners’ long-term ambition is for Envigas to become one of Europe’s leading producers of biocarbon with large-scale production facilities strategically placed on the market in the Nordics and the rest of Europe.

The company’s current operations were started in 2018, after which regular deliveries of smaller volumes began in2020. In addition to the new co-owner Outokumpu, as well as management and staff, the list of owners include Beijer Ventures, Philian, Carbomax, ImranCapital and Palmstierna Invest. The largest shareholder following the transaction is Concejo AB with 25%.

Envigas CEO, Lars-Gunnar Almryd, with previous leading positions in, among other things, the paper and pulp industry, says the following about the collaboration with, and the investment from Outokumpu:

“We are very pleased that our discussions about collaboration have now resulted in Outokumpu becoming a partner in Envigas, which also guarantees the sale and supply of a significantpart of our future production to Outokumpu. Together, we continue to develop the large-scale production for biocarbon, which also includes capitalizing on the side streams of gas and oil that are formed in the so-called pyrolysisprocess. It will be an important component for building a long-term business with good profitability.”

The estimated need for biocarbon for use in the global steel industry is very large. For the Nordic market, recent calculations show a need for more than 350,000 tons of biocarbon per year, as an input in the production of steel.

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Green Steel World Editorial Team

Green Steel World Editorial Team

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