The southern coastal city of Kotka is competing against Rotterdam in the Netherlands as the location for Finnish forestry company UPM's new biorefinery.

The company has stated it has begun the new plant's design planning stage, which will take at least a year.

When UPM first set out plans to build a new biorefinery three years ago, the city of Kotka reserved a 30-hectare space, located at an old power plant site in the Mussalo harbour region. Preparations of the site have already cost the city roughly eight million euros.

The city's MayorEsa Sirviö says it was aware another city elsewhere in Europe had shown interest as a potential location for the plant, so the announcement has not come as a surprise. According to Sirviö, the city of Kotka is willing to spend more money on the location if UPM decides to go ahead and build the refinery in the city.

If the plans do go ahead, the biorefinery would employ several thousand people during its construction period, and the plant itself would employ roughly one hundred people. UPM estimates the planned biorefinery would have an annual capacity of 500,000 tonnes of high-quality renewable fuels, including aviation fuel.

The company estimates that the fuels produced at the new plant would significantly reduce the carbon footprint of road and air transport, and states they would replace the fossil raw materials in chemicals and bioplastics with renewable alternatives.

UPM is historically a Finnish company, but now emphasises that Finnish locations must compete with other sites for new investment. That strategy has cut costs but also embroiled the firm in controversy, as in Uruguay where the company is building a pulp mill. The construction of the mill has angered residents in central Uruguay due to thedisruption caused by the building of a railway to transport wood pulp from the plant to the port in the capital Montevideo.

The railway project is said to have cost the Uruguayan state a little under 2 billion euros. Concerns have also been raised over the toxic materials used in pulp production, such as sulphuric acid and lye.