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Norske Skog/Xynergo and CHOREN to Cooperate on Biofuel Production
Oxenøen, Norway, 26 September 2008 -- CHOREN Industries and Norske Skog have entered into an agreement for collaboration in the evaluation of second generation biofuel production in Norway.

CHOREN is a world leader in solid feed gasification technology used in the production of biomass-to-liquids (BTL), a synthetic biofuel, and earlier this year finalized construction of the world's first commercial plant for such production in Germany which is currently in the commissioning phase. In the near future it will produce about 18 millions liters BTL yearly.

Norske Skog is one of the world's largest producers of newsprint and magazine paper and has the competence and systems required to handle large amounts of woody biomass for industrial production. The production of second generation biofuel based on woody biomass has been identified as a potential new business area. The recently formed biofuel-subsidiary Xynergo has the objective to evaluate and potentially establish one or two full-scale plants for production of BTL in Norway.

The cooperation between CHOREN and Norske Skog means a strong alliance with competence over the entire value chain - from forestry feedstock input to synthetic biofuel output.

"I have high expectations for the business opportunities inherent in production of BTL," said Norske Skog's CEO Christian Rynning-Tønnesen. "The cooperation with CHOREN will allow Xynergo to speed up progress in the development of these plans," he said. 

"Norway has a long leadership tradition in the pulp and paper industry, a strategic partnership in exploring alternate routes for creating value out of the natural resources therefore makes a lot of sense," said Tom Blades, CEO of CHOREN.

CHOREN is developing plans for a final investment decision to be taken in 2009 on the world's first full-scale plant for production of BTL in Schwedt, Germany, with a targeted production of 270 million liters of synthetic biofuel annually.

A similar plant in Norway would be able to cover about 14% of the total Norwegian diesel consumption for road transportation. This would reduce Norwegian CO2 emissions by up to 700,000 metric tons per year, corresponding to 7% of the current total CO2 emissions from road traffic in Norway.

Second-generation biofuel can reduce the total life-cycle CO2-emissions by up to 90% compared to fossil diesel. The process uses woody biomass as raw material, avoiding competition with food or fodder.

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