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Estonia’s own bioproducts production complex

We are launching a new development project aimed at exploring the possibilities of establishing a modern bioproducts production complex in Ida-Viru County. The complex will valorise pulpwood left unused in Estonia and produce bioproducts and renewable energy.

In our opinion Estonia needs a modern bioproducts production complex for adding value to timber and Ida-Viru County has the prerequisites for establishing such a facility. The complex would help us take a step forward in diversifying the economy in Estonia and Ida-Viru County and fulfilling the environmental goals, while also meeting the constantly increasing global demand for a more extensive use of bioproducts.

We are convinced that adding value to Estonian pulpwood is more expedient, reducing the current export from Estonia and the extensive incineration of timber to produce energy. We will valorise pulpwood in the volume allowed by the Estonian Forestry Management Plan. We shall cover the raw material need of the production complex from local resources as well as wood imported from Latvia and Lithuania.

The planned production complex will have a great role in increasing the diversity of the business environment of the region, but above all it will be a big step towards creating a biochemistry cluster. Global demand for bioproducts is ever increasing. We believe that the development of this economic sector is beneficial for the Estonian forestry, the Estonian economy, the Estonian science and the Estonian people.

Our aim is to develop this project in cooperation with the local residents, honestly and openly. We believe in the necessity of the project as well as in it creating value for all the parties – the local community, the local government and the state and the developer.

250

new direct jobs
500

thousand tonnes of various bioproducts a year
800

GWh renewable energy a year
450

million euros into the GDP
2.2

million m³ annual need for raw material
1000

million euros worth of an investment

285 million euros worth of export revenue and 250 well-paid jobs

The development project will doubtlessly have a positive socioeconomic impact both on the local and the national level.

Added value for domestic economy

Today, Estonia exports 80% of the raw material needed for the bioproducts production complex , i.e. pulpwood and wood chips to the Nordic countries where it is valorised into semi-finished of finished products. By valorising the currently exported wood here we would also keep the revenue in Estonia. According to studies, the new complex will provide 285 million euros worth of export revenue a year and ensure an approximately 2% increase in the value of Estonian export. In addition, the direct added value of the bioproducts production complex will amount to nearly 250 million euros, which is approximately 1% of the gross domestic product of Estonia.

An analysis of the socioeconomic impact of the Estonian forestry and timber sector completed in 2021 shows that the total added value of the sector in 2.184 billion euros. This is approximately 13.8% of the entire total added value created in Estonia. The amount could be at least 300 million euros bigger, if we also chemically valorised the paper wood exported from Estonia.

Development opportunities for other sectors

The everyday operation of the production complex will also provide broad development possibilities for enterprises in associated industrial sectors. In addition to the pulpwood supply chain, the operation of the production complex will also give work for other enterprises, primarily in the main areas of logistics, chemistry, machinery, technology, energy and development.

New jobs

For Ida-Viru County, the new environmentally friendly production facility will mean up to 250 direct well-paid jobs and at least 1,000 jobs in the value chain that serves the production complex. For the local government, it will mean contribution into the local budget in taxes as well as a positive impact on the rate of employment and immigration.

The implementation of this project will be the largest investment made by the private sector throughout history.

A good location and a functioning industrial infrastructure

Ida-Viru County is a region of long-standing industrial traditions and knowledge. For decades, oil shale and chemical industry enterprises have successfully operated here.

The establishment of a new facility in an existing industrial region will allow us to use a functioning infrastructure, e.g. large roads, water supply mainlines and power lines without building new ones. Such a solution will reduce the local environmental impact and environmental burden which the construction of a new infrastructure could entail. The vicinity of the port and the sea as well as a robust power network are also arguments for the benefit of the industrial region.

The complex will be established in a location with no objects of nature conservation or cultural heritage as well as no valuable landscapes and Natura 2000 areas. The best possible location for the complex will be found in the course of a local government special spatial plan process. For that purpose, VKG submitted an application for the initiation of a local special spatial plan to the Lüganuse rural municipality government on 20 July. If the plan is initiated, the best possible location is expected to be determined in 2023.