courtesy Neste

Finnish oil company Neste Oil and paper products maker Stora Enso have joined up to evolve technology that burns wood residues for power, heat and biofuels, it was learned Friday.

A demo plant will be built within a year Varkaus Mill in Finland, to be owned 50-50. Both cite Europe’s growing biofuels market after European declarations that promise 10 percent biofuel from a variety of fuel stocks by 2020 — 5.75 percent by 2010.

“The challenges related to generation of clean synthesis gas from wood will need to be solved before wood-based biomass can be used in biofuel production,” the Finns said in a statement, explaining that they intend to focus on the tried Fischer-Tropsch process to produce crude biodiesel from gas.

The €14 millio plant will provide enough energy for 4,300 homes.