From Tree Branches to Fleece Jackets: German Chemicals Plant Invests in Biomass

Johannes Brodowski, a forestry manager, gazes at a stack of freshly cut beechwood, contemplating its potential role in transforming Germanys chemical industry. A nearby factory plans to use Brodowski's wood and other organic materials instead of fossil fuels to produce chemicals that go into everything from packaging and car tyres to fleece jackets.

"The breakthrough lies in creating chemical products that were once fossil-based but can now be made from renewable sources," Brodowski said.

Finnish company UPM Biochemicals inaugurated its 1.3 billion biorefinery in Saxony-Anhalt earlier this year, taking a significant risk during a challenging period for the sector. Germanys traditional chemical industry has struggled with high energy costs and competition from Asia, leaving production at its lowest level since 1995. Despite this, UPM sees an opportunity to encourage chemical producers to shift from fossil fuels to renewable biomass, particularly locally abundant wood.

"With regional supply chains, we can remain competitive and serve global markets," stated UPM site manager Harald Dialer.

The potential is substantial: around 80% of chemical products in Germany still rely on imported fossil-based materials, according to Paul Muennich from the energy transition think tank Agora Energiewende. UPM has secured a supply agreement with Saxony-Anhalt, using beech tree branches and twigs for chemical processes at its refinery. Brodowski noted this could boost beech wood production in the area by 2030%. The plant specifically uses branches, which are less commercially valuable than trunks and usually incinerated.

The wood is processed at Leuna Chemical Park, a hub hosting over 100 firms. While many factories emit strong odors, certain areas of the UPM facility have a sweeter scent. Wood chips are treated until they pop like popcorn, forming a slurry that is fermented in large metal tanks, explained UPM spokesman Martin Ledwon. The process yields two products: a liquid for clothing and bottle production, and a brown powder that can replace carbon black used in tyres and other rubber goods.

UPM aims to reach full capacity by 2027, producing 220,000 tonnes of chemicals annually, offering a rare positive sign in Germany's struggling chemical industry, highlighted further by Dows planned closure of two local plants. "Opening the plant was a very bold decision," said Dialer, noting that the Covid-19 pandemic doubled both the timeline and costs.

UPM hopes for support from the German government, emphasizing the ecological advantages of biomass over traditional fossil-fuel-based plants. However, the current administration under Chancellor Friedrich Merz has shown less focus on environmental policies than previous governments. Dialer noted that when the project began in 2020, sustainability played a central role in public discourse. He also suggested that EU and national measures, such as quotas or tariffs on cheap, environmentally harmful imports, could help bolster European chemical production. Paul Muennich added that subsidies or regulatory measures may be essential to facilitate the transition from fossil fuels to sustainable biomass.

Analysis: Germany’s Shift to Biomass in Chemical Production

The inauguration of UPM Biochemicals’ €1.3 billion biorefinery in Saxony-Anhalt represents a strategic pivot in Germany’s chemical industry, which has faced declining production and rising competition from Asia. By using locally sourced beechwood branches and other organic materials, the plant aims to replace fossil-based inputs with renewable biomass, signaling a potential structural shift for the sector.

The process converts wood into two key products: a liquid for textiles and packaging, and a brown powder that can replace carbon black in tyres and rubber goods. This approach leverages underutilized wood parts, increasing local beechwood production by 20–30% without competing with conventional timber markets.

Despite economic pressures and high energy costs, UPM is targeting full capacity by 2027, producing 220,000 tonnes annually. Success may depend on regulatory support, including EU or national measures such as quotas, tariffs, or subsidies to make biomass competitive against cheap fossil imports. This project highlights both the ecological and economic potential of renewable feedstocks in revitalizing Germany’s chemical sector.

Sources:

• Tree branches to fleece jackets: Chemicals plant in Germany bets on biomass

Author: Grace Ellison
Grace Ellison is a journalist focusing on environmental issues and sustainability. She has experience publishing international reports and participating in documentary projects.