For decades, the economics of a pulp mill have centered primarily on fiber, energy and established byproducts. But as low-carbon markets develop, another potential source of value is emerging from the mill itself: biogenic carbon dioxide.
Biogenic CO₂ is generated from biomass rather than fossil sources. As governments and companies look for ways to reduce emissions, captured biogenic CO₂ can potentially serve two very different low-carbon markets:
As a feedstock for synthetic fuels
As a source of permanent carbon dioxide removal
That is beginning to change the conversation around carbon capture. Rather than viewing CO₂ solely as an emissions-management challenge, some pulp mills may increasingly be able to view it as a potential product.
The first potential market is e-fuels.
Captured biogenic CO₂ can be combined with low-carbon hydrogen to produce synthetic fuels such as e-SAF and other renewable fuels. As policies create requirements and incentives for lower-carbon transportation fuels, verified sources of biogenic CO₂ could become increasingly valuable as feedstocks.
The second pathway is carbon dioxide removal (CDR).
When biogenic CO₂ is captured and permanently stored underground, the process can remove carbon from the active carbon cycle. Plants absorb atmospheric CO₂ as they grow. If the resulting biogenic carbon is captured during industrial processing and permanently sequestered rather than returned to the atmosphere, the process can generate a physical carbon removal.
ResourceWise’s most recent Pulp Mill Bio Solutions Monthly Newsletter identifies both e-fuels and geological sequestration as major pathways for unlocking the value of biogenic CO₂.
For pulp mills, that creates an important strategic question: Which market offers the greatest value for each ton of captured CO₂? The answer may increasingly depend on geography, regulation, infrastructure, carbon purity and the ability to verify the environmental attributes behind the product.
The commercial opportunity does not exist in isolation. Public policy is playing a significant role in building both carbon-removal and low-carbon fuel markets.
Governments across Europe and North America are using subsidies, tax credits, competitive tenders and other mechanisms to support carbon capture and removal. Examples range from Swedish and Danish support for carbon capture and storage to Canadian CCUS incentives and various carbon-removal procurement mechanisms.
Europe is particularly noteworthy.
Optimism in European biofuel markets has grown as RED III implementation approaches, supporting the value floor for biogenic CO₂. In the German market for renewable fuels of non-biological origin, the implied biogenic CO₂ value reached €600 per metric ton.
Read More: EU Carbon Market Reform Could Transform Biogenic CO₂ Removal Economics
That value is not representative of every carbon market or every ton of biogenic CO₂, however. Carbon values can differ substantially depending on the end market and regulatory framework. For instance, some discretionary CDR values are below $150 per ton.
The spread between those markets illustrates an important point: there may not be one universal price for biogenic CO₂. Instead, its value can depend heavily on what the CO₂ enables downstream.
Pulp mills sit at an interesting intersection of forest products and decarbonization.
They process large volumes of renewable biomass and already operate industrial systems in which biogenic carbon moves through concentrated production streams. That potentially gives parts of the industry a starting point for participating in emerging CDR and low-carbon fuel markets.
The sector appears to be paying attention. US pulp and paper producers continue to evaluate entry into the CDR market through capital investment. But capturing the carbon is only part of the equation.
To turn captured CO₂ into a premium low-carbon commodity, mills must also be able to demonstrate where the carbon came from and what environmental attributes are attached to it.
Low-carbon markets do not simply value the CO₂. They value the verified environmental characteristics behind it.
For biogenic CO₂, that means buyers and regulators may need evidence that the biomass originated from acceptable sources, that the carbon stream meets the appropriate purity requirements, and that its environmental characteristics can be documented throughout the supply chain.
Sustainability documentation will be required in markets that evaluate environmental attributes, including evidence that biogenic CO₂ does not originate from deforested sources and verification of the CO₂ stream's purity.
This creates a data challenge.
According to ResourceWise, the US South alone contains more than 12 million private forestry holdings. This makes forest-level traceability potentially complex at scale.
The commercial implications are significant. Traceability serves as the entry point into markets that pay for the environmental attributes of biogenic carbon. CDR and e-fuel supply and offtake markets are already looking toward biogenic CO₂ indexation to manage price risk.
In other words, the ability to prove the carbon's credentials could become almost as important as the ability to capture it.
Biogenic CO₂ is still an emerging market, and multiple elements must be better understood to move forward:
Infrastructure
Capture Economics
Storage
Certification
Traceability
Long-term Pricing
But the direction of travel is becoming clearer.
Carbon-removal incentives are expanding. E-fuel regulations are creating new demand signals. Companies are looking for scalable sources of verified low-carbon carbon. And pulp and paper producers are beginning to assess how existing industrial assets could participate.
For mills, the strategic opportunity may therefore extend beyond simply reducing emissions.
The larger question is whether carbon that already moves through the pulp production system can be captured, verified and directed toward the market that values it most.
If those pieces come together, biogenic CO₂ could represent something relatively new for the pulp and paper sector: a decarbonization tool that also creates an additional source of value.
Biogenic CO₂ is just one of several emerging opportunities reshaping the economics of pulp production. From tall oil and lignin to methanol, bioenergy and other low-carbon products, evolving markets are creating new ways for mills to capture value from existing processes and byproducts.
The Pulp Mill Bio Solutions Monthly Newsletter brings together ResourceWise market intelligence, pricing trends, policy developments and analysis to help producers understand where these opportunities are developing — and what they could mean for their operations.
Download the latest Pulp Mill Bio Solutions Monthly Newsletter to explore the data, trends and market developments shaping the next generation of pulp mill revenue opportunities.