Pulp Giant Throws Cold Water on Eucalyptus-Derived Lignin Ambitions

A major Latin American pulp and paper giant appears to be backing away from its much-publicized efforts in kraft lignin, dealing a blow to hopes for scaling biobased innovation in the sector.

According to individuals familiar with the company’s internal direction, lignin-related investments and commercialization efforts are being shelved in favor of refocusing capital and personnel on its legacy pulp and paper business. Insiders cite executive-level strategic “realignment” as the rationale behind the move. The news throws cold water on what had been one of the more promising initiatives in the lignin space, particularly given this company’s unique access to vast eucalyptus plantations. The company had previously introduced a branded eucalyptus-derived kraft lignin product and positioned lignin as part of a broader commitment to sustainable materials and circular economy initiatives. The scale-down interrupts a highly watched lignin effort, particularly given the company's access to vast renewable eucalyptus feedstocks. It's interesting to observe how different players in the bio-based economy respond to market challenges. Moments like these tend to clarify which organizations are genuinely committed to long-term transformation – and which have adopted the language of sustainability more as a positioning tool than a guiding principle. The global kraft lignin market is clearly on an upward trajectory, supported by growing demand for sustainable materials. European producers continue to expand development, production, and integration with long-term decarbonization goals. Simultaneously, North American leaders such as Domtar have successfully integrated lignin into their strategic sustainability plans.