6 April 2010 – Swedish utility Vattenfall has agreed a EUR50m ($67.4m) deal with Canadian classified advertising baron John McCall MacBain to buy 1m tonnes of wood chips from Liberia over the next five years, with the first delivery this summer.
The state owned utility, Europe’s fifth-largest power generator, wants to reduce dependence on coal in its European power stations, reported the Financial Times. Billionaire McCall MacBain, who built one of the world’s largest classified advertising empires, will produce wood chip from Liberian rubber tree waste that can be burnt to produce electricity.
Göran Lundgren, vice president of biomass at Vattenfall, said talks on further co-operation were continuing. He said: “We are seriously considering a much deeper commitment. It may be a longer supply contract or an equity partnership.”
Vattenfall is looking to secure supplies of biomass to reduce carbon emissions from its coal fired plants in Germany, Poland, Denmark and the Netherlands in anticipation of tougher regulation of greenhouse gases.
McCall MacBain has invested about $100m to develop biomass production in Liberia since breaking up and selling Trader Classified Media, which owned newspapers and websites in 20 countries, for more than $2bn in 2006. Further investment on a similar scale is needed to build up capacity and improve logistics in the impoverished African country.
Liberia has the potential to eventually provide 2m-3m tonnes a year, said McCall McBain.
Vattenfall needs annual supplies of about 7m-8m tonnes of biomass by 2020 to meet its target of reducing hard coal usage by 40 per cent, according to Mr Lundgren. He said: “We will get it from several sources but Liberia can play an important role. This is the biggest deal we’ve done so far.”
Vattenfall has so far bought wood chip from Russia and the Baltic states but Liberian rubber tree waste is potentially more efficient because the wood is drier than pine, the growth cycle is shorter and land costs are lower.