Expected socio-economic benefits of bio-oil production in a resource periphery

The Finnish GREBE partners, Karelia UAS and LUKE, have assessed the direct and indirect socioeconomic impacts on a local, regional and national economy from forest biomass-based bio-oil production using input–output (I–O) analysis.

The planned fast pyrolysis bio-oil industry project will include two production units (each with the capacity of 90 000 tons of bio-oil) and related sites, a raw material terminal and infrastructures. The annual requirement for the biomass raw materials is approximately 700 000 solid m3, including by-products from the wood processing industries as well as round wood and smaller diameter energy wood. For fast pyrolysis bio-oil production, town of Lieksa has locational advantages, as there are available stocks of wood processing industry by-products (sawn dust, cutter shavings) with a currently limited market.

The analyses shows the potential of a bio-oil factory on the development of the local economy and determined the type of impacts bio-oil production has on population and employment development and on the public municipal economy. The study area is located in a resource periphery far from growing regions and suffers from development problems and stagnating development trends. In terms of employment and income, bio-oil production could have a significant positive net impact on the local economy despite leakages to regional and national economies. The impacts of bio-oil production could enhance the future development prospects for the resource periphery according to positive changes in the net migration and by slowing population losses.

Karelia UAS 01-09-2016

Pie chart from average estimates of the employment (number of jobs) and income (million euros) impacts of bio-oil factory construction and operation present at the local, regional and national levels. Size of the pie shows the scale of the total employment and income impacts of the construction and production periods.

For further information, please contact Lasse Okkonen (lasse.okkonen@karelia.fi), Olli Lehtonen (olli.lehtonen@luke.fi)

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