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Tall oil discussion in Finland

2. Background information: 

2.1 Generic information

The refiners of tall oil in Finland are and have been strongly against the Finland’s and EU’s policy and a directive (ILUC-directive, http://europa.eu/rapid/press-release_MEMO-12-787_en.htm) in which the tall oil is defined only as waste raw material and fuel (Satakunnan kansa 2015). The conflict started when the parliament of EU started to prepare the directive and has been on-going since. The directive was sealed in 2015 and is planned to be in effect to 2020 (Kauppalehti 2015).

2.2 Conflict type

The conflict is generic bioenergy governance conflict, based on the directive of EU. All the stakeholders in this case are not satisfied with current governance related to tall oil, since the directive is affecting the competition between stakeholders and making fluctuations in the taxation situation for biofuels (Kauppalehti 2015). 

2.3 Resources involved

Raw tall oil is produced as a by-product in the processes of pulping coniferous trees in wood pulp manufacture (UPM 2016). Tall oil is a mixture of molecules from which different fractions can be separated to further treatment with distillation operations. Tall oil itself is a renewable product.

 

3. Evaluation of the conflict

3.1 Main issues and descriptions

The conflict is about the utilization possibilities of tall oil. The refiners have seen the directive harming the refining of tall oil to other products than biofuel (Satakunnan kansa 2015). Refiners are worried the competition of tall oil will become unequal and markets unfair. The biofuel producers have been interpreted to have unfair benefits with taxes: When tall oil is defined as waste, the taxes orientated to produced biofuels are much lighter than in a situation where the raw materials of biofuel are not waste but more traditional materials (for example palm oil) (Kauppalehti 2015).

Mainly the conflict is about economic and social outlooks, but there is also an ecological side to it. EU has set the goal to 2020 of producing 10 percent of the energy for traffic from renewable sources. Many refiners have indicated that even if all the tall oil would be used to fuel purposes, the amount compared to the goal would be marginal and the tall oil should be allocated to innovations and other productions rather than biofuels and bioenergy (Real green cold 2015). 

3.2 Main stakeholders

The biggest opponents for this new directive in Finland have been Forchem in Rauma and Arizona chemical Oy in Oulu. They refine tall oil to other products than biofuel.

Stakeholders that are getting advantage from the situation are the biofuel producers. For example, the refinery of UPM in Lappeenranta produces renewable biofuels mainly to transportation. UPM does not use any material suitable for food production and the materials are originated only from sustainably and responsibly managed forests (UPM 2016). 

3.3 Analysis of the stakeholders values and interests 

The refiners are strongly opposing the new directive since they see it discouraging all the innovations in the area of bioeconomy. They would give value to a directive, which would allocate the subsidies to all tall oil users and would make the markets more equal. Now the countries in EU can allow financial support in the form of subsidies to utilizing the tall oil as a raw material for biofuels. Refiners see the situation to be harmful to economy, environment and the society of EU (Real green cold 2015).

On the other hand, biofuel producers like UPM can use tall oil in production of biofuels and it is supported. UPM has developed a biofuel that works well in all diesel vehicles and is suitable for all fuel distribution systems. By using biofuels made from tall oil, many environmental benefits can be achieved since the tall oil is renewable source and a by-product of very common production. UPM has also campaigned for the promoting effect for employment (UPM 2016). 

3.4 Evaluation of the intensity of the conflict

The conflict has been a public debate in different forms. The disagreeing party, refiners, have also stated their intentions to appeal to the law department of EU Commission. The appeal would include a statement of tall oil being included to the directive’s raw material list under false pretenses (Kauppalehti 2015).

It has been predicted that the next conflict relating to tall oil is in near future. EU Commission will start preparing new regulations soon as the directives are in effect only to 2020 (Kauppalehti 2015).

3.5 Evaluation of the possible causes of the conflict 

Disagreement concerning the definitions in new directive in EU’s policy. 

3.6  Main elements that may preclude conflict resolution 

EU Commission has already stated that outsiders have no opportunities to affect the contents after the vote of parliament (Kauppalehti 2015). 

3.7 Main elements that may encourage conflict escalation 

Biofuel producers have stated in Finland and Sweden that the directive only authenticates the recent development and practices. Refiners are provoked when the chemistry’s biorefining is being harmed by the different measures of support focused on the production of biofuels (Kauppalehti 2015).

 

5. References  

Investointi maailman ensimmäiseen puupohjaista uusiutuvaa dieseliä tuottavaan biojalostamoon. 2016. UPM BIOPOLTTOAINEET. Available: http://www.upmbiopolttoaineet.fi/biopolttoaineen-valmistus/biojalostamo-lappeenrannan-uusi-laitos/Pages/Default.aspx [6.2.2016]

Indirect Land Use Change (ILUC). European Commission Press Release Database. 2016. Available: http://europa.eu/rapid/press-release_MEMO-12-787_en.htm [6.2.2016]

Jarmo Hartikainen. 2015. UPM ja kemianteollisuus ilmiriidassa mäntyöljystä. Kauppalehti. Availabe: http://www.kauppalehti.fi/uutiset/upm-ja-kemianteollisuus-ilmiriidassa-mantyoljysta/AVkDtXnc [6.2.2016]

Kari Suni. Mäntyöljyjalostajat syyttävät valtiota kalliista virheestä. 2015. Satakunnan kansa. Available: http://www.satakunnankansa.fi/Satakunta/1194984479803/artikkeli/mantyoljyjalostajat+syyttavat+valtiota+kalliista+virheesta.html [6.2.2016]

Mäntyöljy. 2016. Wikipedia. Available: https://fi.wikipedia.org/wiki/M%C3%A4nty%C3%B6ljy [6.2.2016]

The real green cold. 2015. Mistä on kysymys? Available: http://www.realgreengold.com/fi/mista-on-kysymys/ [6.2.2016]