The stainless steel manufacturer Outokumpu has acquired a stake in the Swedish biochar producer Envigas AB. The company wants to use biomass-based raw materials for ferrochrome production as an alternative to fossil coal and thus reduce its carbon footprint.
A key factor in reducing direct emissions at Outokumpu is the switch from fossil raw materials to biomass-based alternatives. Outokumpu has now signed an agreement to acquire a 20% stake in Envigas. The integration of its value chain will strengthen the supply chain for sustainable raw materials and reduce CO₂ emissions from stainless steel and ferrochrome production.
Envigas plans to expand its production capacity in Skellefteå, Sweden, by 25,000 tons in the first expansion phase by the end of 2026, for which Outokumpu has pledged an investment of €9.9 million in the company. With the investment, Outokumpu secures a 50% share in Envigas’ production. Lars-Gunnar Almryd, CEO of Envigas, believes that cooperation and clear purchase commitments are key to expanding biochar production. This would allow both sides to reduce risks and accelerate the reduction of emissions.
Timo Huhtala, the General Manager responsible for Outokumpu’s biochar initiative, says: “Switching to new types of biomass-based feedstock is a concrete step forward to significantly reduce our direct emissions, which account for about 25% of Outokumpu’s total emissions. We have successfully conducted production tests with biochar and biocoke and look forward to increasing their use in the future.”
Biocoke supports the circular economy
The carbon footprint of Outokumpu’s ferrochrome is said to be 67% lower than the industry average. With the transition to the use of biomass-based reducing agents, a further reduction is being sought. Biochar is produced from the biomass of waste from the forestry industry. It can be used as such or further processed into biocoke and used as a substitute for fossil coke in ferrochrome smelting or for fossil coal in stainless steel smelting.
“The decarbonization of our stainless steel requires efforts to reduce emissions in all areas. The use of biomass-based raw materials represents an exciting new chapter in our stainless steel production and supports the circular economy, as valuable, sustainably sourced side streams from the forestry and wood industries, which are currently burned for less efficient energy purposes, can be used to produce new types of raw materials for other industries,” says Huhtala.
Outokumpu is also working on a feasibility study for a possible future investment in its own biocoke production plant. By 2030, Outokumpo aims to reduce its CO₂ emissions by 42% compared to the baseline year 2016, in line with the 1.5-degree climate target of the Science-Based Targets initiative. To this end, the company wants to transform a mine into first CO2-neutral mine in the world.