The gasification test plant in Otaniemi is one of the largest energy projects financed by the Finnish Funding Agency for Technology and Innovation, Tekes. Apart from VTT, the project involves the Helsinki University of Technology, Neste Oil, Foster Wheeler Energy, Andritz, Vapo, Pohjolan Voima and the large forest industry companies UPM, StoraEnso, M-Real and MetsäBotnia.

The commercialization of the gasification technology will be carried out in three phases. The output capacity of the first phase plant for power generation recently launched is 500 kW. The second phase plant, estimated to be launched in 2008-2009, will have the output capacity of 50 MW. This phase involves verifying the risk-free operation of the process. The third phase, from 2010 onwards, encompasses the construction of a demonstration plant which will be able to cover about three percent of the transport biofuel demand.

The total cost of the development and demonstration phase will amount to approximately €300 million (US$376 million). In the commercial plant, the estimated production costs of synthetic biodiesel will be €0.45-0.60/liter (US$2.12-$2.84/gallon US). In Europe, the estimated market for transport biofuels will be approximately 20 million tons after 2010, which corresponds to an annual turnover of €15 billion (US$18.8 billion).

According to VTT Development Manager Esa Kurkela, new production technologies will enable the reduction by half of the additional costs incurred for the national economy from the use of biofuels. Additionally, with the domestic supply of raw-materials, the share of bio-energy could amount to as much as 20% by 2020.

Finland is committed to increasing its share of biofuels by 2010 in accordance with EU requirements. The Finnish government has therefore drafted a bill for parliament to consider that will see 5.75% of all fuels are bio-based by 2010.