A kraft pulp mill traditionally sells pulp.

The better ones already sell considerably more.

Electricity.

District heat.

Tall oil.

Turpentine.

Other biochemicals derived from the wood and chemical-recovery process.

Metsä Group is now trying to add another product to that list:

carbon dioxide.

Finland has awarded Metsä Group €21 million in investment aid for a planned biogenic CO₂ capture facility at its Rauma pulp mill.

If built, the plant would capture approximately 100,000 tonnes of wood-derived CO₂ annually from recovery-boiler flue gas. Metsä says customers would use that CO₂ as feedstock for e-fuels.

The project received the funding through a reverse auction run by Finland’s Ministry of Economic Affairs and Employment, in which support was directed toward projects requiring the lowest amount of public aid relative to the carbon-capture capacity being built.

That makes the €21 million award significant.

But it does not mean construction has been approved.

Metsä says a final investment decision cannot be considered before early 2027 and still depends on:

an environmental permit;

completion of engineering;

and sufficient customer demand.

The grant itself will only be paid if the investment actually proceeds.

That last condition may be the most important one.

The technical question is increasingly becoming:

Can a pulp mill capture biogenic CO₂?

Metsä believes its 2025 pilot has already provided enough evidence to move toward controlled scale-up.

The commercial question is harder:

Can someone build a profitable industrial business around buying that CO₂ every year?

That is where this project becomes much more than another carbon-capture demonstration.

First, This Is Not Carbon Removal

The climate language around projects like this needs precision.

Metsä says using 100,000 tonnes of wood-based CO₂ annually in a fuel value chain could avoid fossil emissions equivalent to the annual emissions of nearly 30,000 passenger cars.

That is a company estimate based on fossil-carbon substitution.

It should not be interpreted as 100,000 tonnes of permanent carbon removal.

If the CO₂ is converted into an e-fuel and that fuel is later combusted in an aircraft, ship or other engine, the carbon normally returns to the atmosphere.

The climate logic is different.

Wood absorbed carbon dioxide while growing.

The pulp mill releases part of that biogenic carbon during its energy and chemical-recovery processes.

Capture prevents some of it from immediately entering the atmosphere.

If that carbon is then combined with low-emission hydrogen and turned into fuel, it can potentially substitute for carbon that would otherwise have been extracted from fossil resources.

The carbon is recycled through another use before returning to the atmosphere.

That is carbon capture and utilisation, or CCU.

Permanent storage would be different.

Metsä itself distinguishes between the two pathways in its climate-transition work: wood-based CO₂ could either be used as a raw material or stored permanently, with geological storage potentially functioning as a technical carbon sink.

The Rauma project currently being planned is focused on the utilisation route.

That distinction matters.

E-Fuel Climate Performance Depends on More Than the CO₂ Source

Biogenic carbon can be attractive for synthetic-fuel production.

The International Energy Agency sees potential synergies between e-fuel production and biogenic CO₂ sources, particularly for sectors such as aviation and shipping where direct electrification is more difficult.

But capturing wood-derived CO₂ does not automatically make the resulting fuel low carbon.

The hydrogen matters.

The electricity producing that hydrogen matters.

The heat and electricity consumed by carbon capture matter.

CO₂ purification and transport matter.

The conversion process matters.

European rules governing renewable and low-carbon fuels explicitly account for energy and consumables used in CO₂ capture when calculating greenhouse-gas performance. They also recognize qualifying CO₂ captured from sustainable biomass sources as a potential carbon input.

So the relevant climate equation is not simply:

biogenic CO₂ = sustainable fuel.

It is closer to:

qualifying biogenic carbon + sufficiently low-emission hydrogen + efficient conversion + appropriate logistics = potential fossil-carbon displacement.

Metsä’s capture plant would provide only one part of that value chain.

That is why the company describes this as the construction of an entirely new industrial value chain rather than simply another piece of pulp-mill equipment.

Why a Kraft Pulp Mill Is an Interesting CO₂ Source

Pulp mills have one major advantage as potential carbon suppliers:

scale.

The recovery boiler is a central part of kraft-pulp production.

Black liquor containing dissolved wood organics and spent cooking chemicals is concentrated and burned.

That process recovers energy and enables regeneration of cooking chemicals.

It also generates a large and relatively continuous stream of biogenic CO₂.

Metsä Fibre has previously estimated that its pulp and bioproduct mills generate roughly 10 million tonnes of wood-based CO₂ annually, with around 80–90% theoretically capturable. Metsä Group has put the broader figure across its production system at around 12 million tonnes.

Those are company estimates rather than demonstrated commercial capture volumes.

But they show why the forest industry is attracting interest.

A pulp mill does not have to grow additional trees simply to manufacture a CO₂ feedstock.

The carbon stream already exists as part of the current pulp-production process.

Metsä says the capture concept would not require additional wood use.

That gives the project a very different economic logic from building an entirely new biomass process solely to produce carbon dioxide.

Rauma Is Starting Small Relative to the Available Carbon

The planned 100,000 tonnes per year should therefore be understood as a first commercial step.

It is substantial for a first project.

It is small compared with the theoretical CO₂ stream available across Metsä’s pulp operations.

In March, the company said its long-term wood-based CO₂ capture potential across the Group was several million tonnes annually.

The company has already identified Rauma, Joutseno, Äänekoski, Kemi and Husum as mills with sufficiently large CO₂ streams to warrant attention.

So Rauma is not really a 100,000-tonne story.

It is a test of whether the first 100,000 tonnes can establish:

technical performance;

capture economics;

customer contracts;

energy integration;

CO₂ logistics;

and a workable commercial model.

If those pieces work, the next projects could be considerably larger.

If they do not, the theoretical millions of tonnes remain just that—theoretical.

The €21 Million Number Needs Context

The auction structure is interesting.

The government selected projects partly according to how little public support they required for each unit of carbon-capture capacity to be constructed.

With €21 million of aid supporting a nominal 100,000 tonnes of annual capture capacity, the simple ratio is:

€210 of one-time grant support per annual tonne of nameplate capture capacity.

That is not the same thing as paying Metsä €210 for every tonne it captures.

The €21 million is investment aid.

If the plant operates for many years, that capital-support metric is spread across many years of actual output.

Nor should the €210 figure be confused with the plant’s capture cost per tonne.

Metsä has not disclosed that.

It has also not published the final total capital expenditure for the Rauma facility.

Earlier in the process, the company said the public financing it was seeking could represent no more than 30% of the total investment.

That provides some context, but it would be inappropriate to reverse-engineer an exact project cost from the €21 million award because we do not know whether the final grant represents the maximum permitted share.

The unanswered commercial numbers remain:

total capex, operating cost per captured tonne and sale price of the CO₂.

Those three figures will ultimately matter more than the subsidy headline.

The Technology Has Already Moved Through a Pilot

This is not Metsä’s first step.

The company and Andritz began studying large-scale integration of carbon capture with pulp production before the Rauma commercial project was proposed.

In June 2025, a pilot capture unit began operating at Rauma.

Metsä said the pilot could capture approximately one tonne of CO₂ per day and was being used to examine:

energy consumption;

capture rate;

required flue-gas treatment;

and final CO₂ quality.

By early 2026, the company concluded that the technology had matured sufficiently for controlled upscaling.

That wording is important.

It does not mean every engineering problem has been solved.

It means Metsä believes the basic capture process has progressed far enough to justify the next development stage.

A 100,000-tonne commercial installation would still represent an enormous jump from the pilot.

The remaining challenge is no longer simply proving that CO₂ can be separated from recovery-boiler flue gas.

It is proving that it can be separated continuously, economically and reliably at industrial scale while the pulp mill keeps running.

Energy May Be the Hardest Technical Question

Carbon capture consumes energy.

That point can disappear surprisingly quickly in discussions about biogenic CO₂.

Flue gas contains much more than pure carbon dioxide.

The capture system has to separate CO₂ and regenerate the capture medium.

The purified carbon dioxide may then need compression or further conditioning depending on how it is transported and used.

Metsä and Andritz’s earlier work on a much larger Kemi-sized capture concept illustrates the scale of this challenge.

For that study, which examined capture on the order of 4 million tonnes annually, Metsä said only around 20% of the required heat energy could be supplied from existing mill operations without additional solutions. The remainder would require further technical development and energy integration.

That figure should not be applied directly to the 100,000-tonne Rauma plant.

The projects are different in scale and design.

But it identifies the engineering problem clearly:

carbon may be free in the flue gas; separating it is not.

Rauma Does Have One Significant Advantage

The Rauma pulp mill is already an energy producer.

It has approximately 650,000 tonnes per year of softwood-pulp capacity, and Metsä currently reports an electricity self-sufficiency rate of about 180%.

In practical terms, the mill produces substantially more electricity than it consumes and exports surplus renewable power.

That makes Rauma a logical location for an energy-intensive new process.

But electricity self-sufficiency should not be interpreted as saying capture energy is free.

A kilowatt-hour consumed by the capture plant is a kilowatt-hour that may no longer be exported.

Heat also has its own opportunity value.

And integration with steam systems can affect the energy balance elsewhere in the mill.

For a pulp producer, this creates an important calculation:

Does selling captured CO₂ create more value than selling the surplus energy required to capture it?

That comparison will change with:

electricity prices;

CO₂ prices;

e-fuel demand;

capture efficiency;

and process integration.

Those economics have not yet been published.

The Most Interesting Risk Is No Longer Technology

Metsä’s March announcement contained an unusually revealing statement.

The company said the main uncertainty is market development, because industrial value chains using wood-based CO₂ are still being created.

That is telling.

Metsä has already piloted the technology.

It has already begun pre-engineering.

It has already applied for the environmental permit.

It has now secured €21 million of investment aid.

And earlier this year, the company said it had signed its first supply agreements with customers for wood-based CO₂.

Yet sufficient market demand remains one of the conditions for the final investment decision.

That tells us the first agreements do not fully de-risk the project.

The pulp mill can potentially produce the CO₂.

The bigger uncertainty may be whether enough e-fuel producers will be ready to buy enough of it, on sufficiently long contracts, at a price that supports the investment.

This is where the forest industry becomes dependent on another emerging industry.

A CO₂ Plant Needs an E-Fuel Industry to Grow Beside It

Synthetic fuels require more than carbon.

They need hydrogen.

And low-emission e-fuels generally need large quantities of electrolytic hydrogen produced with low-carbon or renewable electricity.

The IEA sees e-fuels as potentially important in difficult-to-electrify transport sectors such as aviation and maritime shipping, but it also emphasizes the huge renewable-power expansion and electrolyser investment required to scale them.

That creates a chicken-and-egg problem.

A pulp mill will be reluctant to build a major CO₂-capture plant without reliable customers.

An e-fuel producer needs reliable CO₂ supply before building conversion capacity.

Hydrogen developers need customers before investing in electrolysers.

And infrastructure may be needed to move carbon, hydrogen or finished fuel between sites.

Public investment support is partly intended to bridge that early-market problem.

That is why Metsä says the €21 million is a key prerequisite rather than merely a financial bonus.

CO₂ Could Become Another Kraft-Mill Side Stream

This is where the project becomes especially relevant to the pulp industry.

Kraft mills have become progressively better at turning material that once looked like a production residue into commercially useful streams.

Tall oil.

Turpentine.

Electricity.

Heat.

Lignin at some sites.

Sulfuric acid and other biochemicals at increasingly integrated bioproduct mills.

CO₂ could be the next major addition.

Metsä describes wood-based carbon dioxide today as an almost completely unused side stream.

If a market develops, the recovery boiler stops being viewed only as the heart of the chemical-recovery and energy system.

It also becomes a carbon feedstock generator.

That subtly changes the economics of pulp production.

A mill would no longer generate value only from:

the cellulose fiber;

energy;

and established biochemicals.

It could potentially sell part of the carbon already moving through the process.

This is the biorefinery concept moving another step downstream.

It Could Also Make Pulp Competitiveness More Complicated

Metsä Fibre CEO Ismo Nousiainen said the project could improve the competitiveness of the company’s pulp production.

There is a clear logic to that.

If an existing process stream becomes another product, the mill potentially gains another revenue line against essentially the same wood input.

But that outcome is not automatic.

A capture plant adds:

capital;

maintenance;

energy consumption;

operating personnel;

chemicals or sorbents;

compression;

and potentially logistics costs.

The new revenue has to exceed those costs.

So carbon capture improves pulp competitiveness only if the net economics of CO₂ recovery are positive.

No public data yet allow us to make that calculation for Rauma.

That is why the sale price of biogenic CO₂ may become as important to this project as the market pulp price.

CO₂ Quality Will Matter More Than the Word “Biogenic”

An e-fuel plant does not buy a sustainability story.

It buys a chemical feedstock.

That means the captured CO₂ will eventually need specifications.

Purity.

Moisture.

Pressure.

Trace contaminants.

Delivery volume.

Consistency.

Potential impurities originating from recovery-boiler combustion.

Metsä’s 2025 pilot specifically examined the quality of the captured product and the degree of flue-gas pretreatment required.

That is an important detail.

A kraft recovery boiler provides a large carbon stream, but the downstream customer needs CO₂ that fits its process.

The more purification required, the more the economics change.

This is another reason pulp mills cannot simply declare millions of tonnes of flue-gas CO₂ a new commercial product overnight.

The value lies in captured and specification-compliant CO₂, not theoretical stack emissions.

Logistics May Decide Which Pulp Mills Have the Best Opportunity

The next issue is physical movement.

One hundred thousand tonnes of CO₂ per year is roughly 274 tonnes per calendar day on a simple annualized basis.

How that material moves from the pulp mill to an e-fuel producer matters.

Pipeline?

Ship?

Rail?

Truck?

Or should the e-fuel facility eventually be built beside the mill?

Metsä has not publicly defined the final logistics architecture for the Rauma project.

That uncertainty deserves attention because transport can strongly influence the value of a bulk industrial feedstock.

A pulp mill with an enormous CO₂ stream but poor access to hydrogen, ports or fuel-production infrastructure may have a less attractive carbon business than a smaller mill located inside the right industrial cluster.

This could eventually create a new criterion for pulp-mill competitiveness:

not just access to wood, energy and customers—but access to carbon-utilisation infrastructure.

The Project Also Changes the Meaning of “Pulp Mill Location”

Historically, mill sites have been selected and maintained around familiar industrial fundamentals:

fiber availability;

water;

energy;

transport;

and customer logistics.

The hydrogen economy could add another dimension.

A mill located close to abundant renewable electricity can be attractive for hydrogen production.

A mill with a concentrated biogenic CO₂ stream can provide carbon.

A nearby port can support e-fuel distribution.

Heat integration may create additional synergies.

Put those pieces together and a pulp mill can become an anchor inside a completely new industrial ecosystem.

Finland is particularly interesting in this respect because its large kraft-pulp industry already provides substantial concentrated biogenic carbon streams.

Metsä estimates several million tonnes of long-term capture potential within its own operations alone.

If even part of that becomes commercially recoverable, the forest industry could become an important carbon supplier to Finland’s future synthetic-fuels and chemicals sectors.

But E-Fuels Are Only One Destination

Metsä’s current Rauma project is focused on e-fuel customers.

The wider opportunity is larger.

The company has identified potential use of wood-based CO₂ in:

fuels;

chemicals;

and plastics.

That distinction could become strategically important.

Fuel use recycles carbon relatively quickly.

The molecule enters fuel and returns to the atmosphere when burned.

Chemical or polymer applications could potentially retain carbon for longer periods depending on the product and its life cycle.

Permanent geological storage could retain it much longer again and potentially create a carbon-removal pathway.

Those options could eventually place different values on exactly the same tonne of captured biogenic CO₂.

A pulp mill may therefore face a new optimization problem:

sell the carbon to fuels, sell it to materials, or store it?

The answer could depend on carbon-credit rules, customer price, transport distance and climate policy.

That market does not yet exist at mature scale.

But the Rauma project begins to make the question less theoretical.

The €21 Million Grant Is Really Buying Market Formation

Finland’s reverse-auction approach is worth watching for this reason.

The state is not paying Metsä simply because capturing CO₂ is technically interesting.

The support is intended to reduce the investment barrier sufficiently for an early commercial project to proceed.

If successful, that first facility creates more than capture capacity.

It creates:

operating experience;

equipment suppliers;

engineering knowledge;

CO₂ specifications;

customer contracts;

transport solutions;

and a reference plant for the next investment.

That is how a new industrial value chain begins to acquire infrastructure.

Metsä itself says early-stage public financing is often necessary when completely new value chains and markets are being established.

That does not guarantee that public support will generate an economically durable industry.

But it explains why the government designed the auction around the amount of aid required per unit of new capture capacity.

The policy objective is not merely to subsidize emissions equipment.

It is to discover which projects can build capacity with the lowest public-support requirement.

The Next Announcement Matters More Than the Grant

There are several milestones I would watch before calling Rauma a commercial breakthrough.

First:

the environmental permit.

Metsä submitted the application in December 2025 and previously expected a decision during 2026.

Second:

the final investment decision.

That cannot come before early 2027.

Third:

the customer contracts.

We need to know whether sufficient e-fuel demand exists to support the plant at scale.

Fourth:

energy integration.

How much steam, heat and electricity will 100,000 tonnes of annual capture require?

Fifth:

the economics.

What is the total capex?

What does capture cost per tonne?

What are customers willing to pay?

And sixth:

actual operating performance.

A nominal 100,000-tonne plant is only valuable if the mill can achieve high availability without disturbing pulp production.

Those numbers will tell us much more than the €21 million headline.

The Recovery Boiler Could Become a Revenue Asset in a New Way

Kraft pulp mills already have one of industry’s more sophisticated resource-recovery systems.

The recovery boiler takes material removed from wood during pulping and turns part of it into energy while recovering inorganic cooking chemicals.

For more than a century, the economic logic has been about keeping the kraft process running and lowering external energy requirements.

Carbon capture adds another possibility.

What comes out of the boiler stack could itself become a feedstock business.

That is a significant conceptual shift.

And unlike some proposed forest-sector diversification projects, it does not require changing the mill’s main product.

Rauma would still make softwood kraft pulp.

Its current capacity is approximately 650,000 tonnes per year, serving paperboard, tissue, printing, specialty and medical-paper applications.

Carbon becomes an additional revenue opportunity attached to existing pulp production.

That could make this type of diversification especially attractive.

The mill does not have to bet its core business on a completely new product.

It adds another product around the core process.

This Is What a Future Biorefinery May Actually Look Like

The forest industry’s “biorefinery” discussion sometimes sounds abstract.

The Rauma project makes it more concrete.

One tree enters the industrial system.

Part becomes lumber.

Sawmill chips can become pulp.

Cellulose becomes paper, board, tissue or specialty products.

Dissolved wood components help generate energy and chemical-recovery products.

Extractives can become tall oil and turpentine.

Surplus electricity can enter the grid.

Heat can serve neighboring users.

And potentially, carbon dioxide from the recovery boiler can become feedstock for synthetic fuel.

Metsä describes the Rauma site as already producing more bioenergy than it consumes, with electricity self-sufficiency around 180%.

Carbon capture extends that cascading philosophy into a stream that historically had almost no product value.

That is what makes this project more important to the pulp sector than the climate headline alone suggests.

But the Pulp Mill Cannot Build the Market by Itself

The technology may now be mature enough to scale.

The grant has arrived.

The mill produces the carbon.

What Metsä still cannot control completely is the downstream market.

E-fuel economics depend on policy, hydrogen cost, renewable-electricity availability and demand from sectors willing or required to pay a premium for lower-emission fuel.

That is why “sufficient market demand” remains a formal investment condition even after Metsä signed initial customer agreements.

This could ultimately become the defining risk.

The forest industry may be capable of producing millions of tonnes of biogenic CO₂ before the e-fuel industry is capable of paying for millions of tonnes of it.

If that happens, capture capacity will develop only as fast as downstream customers.

If e-fuels, chemicals and carbon-removal markets expand rapidly, the same flue-gas stream could become surprisingly valuable.

So Do Not Measure This Project Only in Tonnes of CO₂

The obvious KPI is 100,000 tonnes.

I would watch another one:

euros of new value created per tonne of pulp produced.

If CO₂ capture becomes a profitable side-stream business, it changes pulp-mill economics without increasing wood consumption.

That is the important strategic possibility.

A mill capable of extracting value from:

fiber,

energy,

tall oil,

turpentine,

heat,

and carbon

has a different economic structure from a mill relying almost entirely on the market price of pulp.

There is no evidence yet that Rauma’s CO₂ business will be profitable enough to materially transform pulp margins.

The required commercial data have not been released.

But that is exactly why the project deserves attention.

The €21 million grant is not proof of success.

It is Finland paying to find out whether biogenic carbon can graduate from pulp-mill emission to industrial raw material.

And if the answer is yes, the implication extends far beyond one 100,000-tonne plant.

Metsä believes its own operations ultimately contain several million tonnes of annual capture potential.

Finland has other kraft mills with similar biogenic point sources.

The customers could range from synthetic fuels to chemicals and, potentially, permanent carbon storage.

That means pulp mills may eventually compete not only on fiber cost, energy efficiency and pulp quality.

They may also compete on how effectively they monetize the carbon already passing through their recovery boilers.

For pulp producers, the question worth asking is therefore not simply:

“Can we capture our biogenic CO₂?”

It is:

“Who is willing to buy it, what will they pay, how much energy will capture consume—and is that new carbon business worth more than the electricity, heat and capital required to create it?”

Rauma’s next investment decision should begin to give the industry an answer.

Last Updated on 11/09/2026 by Jota Machinery