Stora Enso and Neste Oil to Join Forces in Biofuel Development

Stora Enso and Neste Oil to Join Forces in Biofuel Development

March 21, 2007

    HELSINKI, Finland, March 21 /Xinhua-PRNewswire/ --
Stora Enso has signed an agreement with Neste Oil to join
forces to develop technology for producing new-generation
biofuels from wood residues to replace fossil fuels in
transportation and thus cut greenhouse gases.  The first
step will be to design and build a demonstration plant at
Stora Enso's Varkaus Mill in Finland.  The demonstration
plant, which will be owned on a 50/50 basis by the parties,
is expected to start up in 2008. 

    Stora Enso is pioneering in developing its business in
the new direction of producing biofuels for transportation.
 This will enable it to utilise its broad know-how and long
experience in wood-based industries and wood sourcing in a
new way to create business opportunities. Expertise from
Stora Enso, Neste Oil and VTT (the Technical Research
Centre of Finland) will be utilised to implement the
development phase and commercialise wood-based biofuel
production.  Stora Enso and Neste Oil see the growing
biofuel market in Europe as a promising and sustainable
business opportunity meeting the increasing demand for
premium-quality products made from a wide variety of
feedstocks.
 
    The EUR 14 million demonstration plant will be
integrated into the energy infrastructure of the Varkaus
Mill, where the gas produced will equal the energy needed
to heat 4,300 homes and cut carbon dioxide emissions
significantly. 

    Full-scale commercial production 

    Following the development phase, the joint venture will
build a full-scale commercial production plant at one of
Stora Enso's mills, once the technical solutions are ready
and the JV partners have gained enough experience from the
demonstration plant.  This facility will be owned on a
50/50 basis between the JV partners.  In the joint venture,
Stora Enso will be responsible for supplying the wood
biomass and utilising the heat generated at its pulp and
paper mill.  Stora Enso's wood biomass is supplied from
forests according to ecological preconditions. Neste Oil
will be responsible for final refining and marketing of the
biofuels produced.

    Responsibility through cutting greenhouse gases

    The European Union has set a target of replacing 5.75%
(18 million tonnes) of the fossil fuels consumed by
transportation with biofuels by 2010 and 10% by 2020.  This
would mean replacing 30 million tonnes of fossil fuels and
would require significant increases in biofuel production. 
Emissions from biofuels are considered to be carbon-neutral
because the carbon dioxide is recycled through the
atmosphere and stored by growing forests as part of the
natural carbon cycle, whereas combustion of fossil fuels
introduces "new" sources of carbon dioxide into
the atmosphere. 

    This new enterprise supports Stora Enso's
sustainability policies and the Group's efforts to mitigate
climate change.  Stora Enso is focused on reducing
greenhouse gases by improving energy efficiency, increasing
usage of biofuels and other renewable energy sources, and
maximising the use of combined heat and power in energy
production.

    Neste Oil Corporation is a refining and marketing
company focused on advanced, clean traffic fuels, with a
strategy that prioritises growing its refining and
premium-quality biodiesel businesses.  Neste Oil's
refineries are located in Porvoo and Naantali in Finland,
and have a total refining capacity of approximately 250,000
barrels per day.  The company employs around 4,700 people. 
Neste Oil is listed on the Helsinki Stock Exchange.  For
further information, see http://www.nesteoil.com .

    Stora Enso's Varkaus Mill produces fine paper,
directory paper, newsprint, coreboard and sawn timber on
three paper machines and one board machine with a total
annual capacity of about 620,000 tonnes of paper and board,
and 345,000 m3 of sawn wood products.  The mill's annual
wood consumption is approximately 2.3 million m3.  The mill
employs about 980 people.

    Stora Enso is an integrated paper, packaging and forest
products company producing publication and fine paper,
packaging board and wood products -- all areas in which the
Group is a global market leader.  Stora Enso's sales
totalled EUR 14.6 billion in 2006.  The Group has some
44,000 employees in more than 40 countries on five
continents.  Stora Enso has an annual production capacity
of 16.5 million tonnes of paper and board and 7.4 million
cubic metres of sawn wood products, including 3.2 million
cubic metres of value-added products.  Stora Enso's shares
are listed in Helsinki, Stockholm and New York.



    For further information, please contact:

     Jukka Harmala, CEO
     Tel:   [phone]

     Markku Pentikainen, EVP, 
     Corporate Technology and Asia Pacific
     Tel:   [phone]

     Kari Vainio, EVP, 
     Corporate Communications
     Tel:   [phone]

     Keith Russell, SVP, 
     Investor Relations
     Tel:   [phone]

     Ulla Paajanen-Sainio, VP, 
     Investor Relations and Financial Communications
     Tel:   [phone]
   
    http://www.storaenso.com
    http://www.storaenso.com/investors
    http://www.storaenso.com/varkaus

    Photos from Varkaus are available at
http://bmt.storaenso.com/storaensolink.jsp?imageid=070316 .