In a bold move for a struggling sector, a massive new chemical plant in Germany is betting its future on a surprising raw material: beech wood. The factory aims to transform branches and wood chips into the building blocks for everyday products, from car tyres to fleece jackets, directly challenging the industry's deep-rooted dependence on fossil fuels.
A Forest's New Value: From Firewood to Chemical Feedstock
Forestry manager Johannes Brodowski surveys a pile of freshly cut beechwood in Saxony-Anhalt, contemplating its new destiny. This timber, particularly the branches and twigs often deemed waste, is no longer destined just for burning. Instead, it is being shipped to a groundbreaking €1.3 billion ($1.5 billion) biorefinery operated by the Finnish group UPM Biochemicals.
The plant, which opened this year, processes this biomass to create chemical materials that traditionally come from oil or gas. "The innovative part is that a new product is getting made," Brodowski explained. "Namely, chemical materials that were originally made from fossil fuels and now can be made from renewable sources."
The 'Popcorn' Process: Turning Wood into Wearables
At the Leuna Chemical Park, home to over 100 firms, UPM's facility stands out. While many plants emit a sulphurous odour, parts of the new biorefinery are filled with a sweeter smell. Here, wood chips undergo a unique treatment.
"Wood chips are treated until they burst 'like popcorn'," said UPM spokesman Martin Ledwon. This process creates a slurry that is then fermented in enormous metal tanks. The final output is twofold:
- A liquid used to manufacture clothing like fleece jackets or plastic bottles.
- A brown powder that can replace carbon black, a key filler derived from oil used in car tyres and rubber products.
The refinery has a supply deal with the forest-rich state of Saxony-Anhalt, which could boost local beech wood production by 20-30%, according to Brodowski. It uses parts of the tree that have lower commercial value, giving new economic life to what was often just incinerated.
A Gamble for Germany's Ailing Chemical Heartland
This massive investment comes at a precarious time for Germany's chemical industry, which has been hammered by soaring energy costs and fierce competition from Asia. National chemical output has slumped to its lowest level since 1995.
Despite the sector's woes, UPM believes the timing is right to push giants to switch to renewable biomass. The potential is significant, as roughly 80% of German chemical products currently rely on imported fossil-based materials, noted Paul Muennich from the Agora Energiewende think tank.
"With local supply chains, we can be competitive and meet the needs of international markets," asserted UPM site manager Harald Dialer. By 2027, the plant aims to reach full capacity, producing 220,000 tonnes of bio-based chemicals annually—a potential bright spot in an otherwise gloomy landscape, underscored by the imminent closure of two nearby plants owned by US giant Dow.
Dialer called the decision to open the plant "very bold," noting that the Covid pandemic doubled both the timeline and costs. The company now seeks government support, arguing its project is more ecologically sustainable than oil-based alternatives. However, the new federal government under Chancellor Friedrich Merz has shown less enthusiasm for climate initiatives than its predecessor.
Both UPM and energy experts like Muennich argue that government intervention—through subsidies or tariffs on cheaper, often less sustainable imports—is necessary to accelerate the shift from fossil fuels to sustainable biomass. As Germany's industrial core seeks a viable future, the success of this €1.3 billion bet on beech wood could chart a new, greener course.
