Pulp Non-Fiction: Mercer International Finds Allure, Redemption in the Advanced Bioeconomy

by Jim Lane (Biofuels Digest) ... Black liquor, they called her. Thick, volatile, carbon-rich. The kind you burn without thinking, just to feel the heat. Most mills did. Most couldn’t help themselves.

But Mercer… Mercer looked closer. They saw through the smoke. Saw value, not waste. Sequestration. Substitution. Redemption. They didn’t reach for the match.

As Mercer CEO Juan Carlos Bueno explains, Mercer’s “main strategy that we have on on the energy side is to generate less energy so that we can actually use that raw material instead of burning it for energy to extract additional value from them”. This marks a significant shift from simply being a net energy exporter, which Mercer already is, selling 40% of the 400 megawatts it produces to the grid. Instead, the focus is on a more profound “pulp separation” – isolating high-value components from byproducts previously earmarked for combustion.

We’ve seen this elsewhere, Raizen spoke to us of how they were generating power and heat out of by anaerobically digesting vinasse, allowing them to use more sugarcane bagasse to make cellulosic ethanol or other products.

In Mercer’s case, the key is black liquor, a byproduct of pulp production, which contains valuable components like lignin and hemicellulose. Mercer is actively extracting lignin from black liquor at a pilot plant in Rosenthal, Germany, producing one ton per day of lignin. The goal is to scale this to 40,000 tons of lignin per year commercially within three years.

The use of lignin to “replace fossil based products”

The opportunity is not just technical — it’s economic. The global market for lignin-derived products is projected to exceed $6 billion by 2030, with rising demand in automotive, packaging, construction, and specialty chemicals. While current supply chains still rely on petroleum-based phenols, carbon black, and bitumen, a scalable supply of low-cost, bio-based lignin could rewrite the rules. Mercer’s 40,000-ton target may be modest in that landscape, but it opens the door to higher-value niches where price premiums and ESG mandates align.

For Mercer, this includes substituting phenols in resins used in the wood product industry, transforming them into “green based glues”. Other potential applications being explored include anodes for lithium batteries, carbon black for tires, bitumen for asphalt, and vanillin for food.

From a sustainability perspective, lignin allows for a product that has been sequestered (carbon stored) to remain in a building for decades, rather than being released into the atmosphere when burned for energy. This is seen as a “win win”.

Mercer is pursuing a significant carbon capture project at its Peace River mill in Alberta, Canada. This mill is uniquely positioned due to its location “almost on top of” large physiological formations ideal for carbon sequestration, minimizing transport distances. The project aims to extract 500,000 tons of CO2 using a membrane-based technology developed in partnership with Svante. This initiative has “incredible potential for revenue and profit,” with the Juan Carlos Bueno telling us that CO2 could become the “number one profit contributor on top of pulp” for the mill, fundamentally transforming it into a “biorefinery”.

They are converting the lime kiln at their largest pulp mill in Germany from natural gas to biomass (pellets produced internally), which will be a “very significant contributor to the reduction of greenhouse gas emissions,” helping them achieve almost halfway to their 50% Scope 1 GHG reduction target by 2030. This project is supported by a 50% grant from the government.

Mercer’s investment in mass timber (like CLT and glulam) is another key area. While not directly about energy efficiency, it’s about expanding higher-value offerings and replacing fossil-based and carbon-heavy materials in construction, thus supporting low-carbon transitions and driving long-term growth potential. Mercer holds approximately 30% of North America’s installed CLT capacity. This contributes to storing carbon in long-lived products and displaces emissions from traditional materials.

Sustainability is not just a separate initiative but is woven into the core business strategy to create lasting enterprise value.

For Mercer, achieving triple bottom-line goals — delivering significant environmental benefits (decarbonization, circularity), fostering societal well-being through sustainable solutions, and driving substantial financial returns — is not an alternative to ESG, but rather the strategic realization of its inherent value. READ MORE