UPM, which is one of the world's biggest producers of forest products with sales of £7.5bn (€10bn) and 28,000 employees worldwide, has signed a deal with Chempolis Oy on the use of a new biorefining technology for producing papermaking fibre and biochemicals.

UPM is currently considering building an industrial biorefinery using agro residues in China, which would be the first of its kind in the world.

Chempolis Oy technology means agro residues and other non-wood feedstocks, such as straw and reed, can be used as raw materials for pulp and biochemicals.

Non-wood materials include a number of cultivated and naturally growing plants that are abundant in highly populated countries with a shortage of papermaking fibres.

Chempolis is touting the technology as environmentally friendly because it does not use sulphur or chlorine, the water consumption and greenhouse gas emissions are low, and other environmental impacts are minimised.