Mercer International Inc. (NASDAQ: MERC) began operating a six‑month carbon‑capture demonstration unit at its Peace River pulp mill in northern Alberta. The pilot, installed by subsidiary Mercer Peace River Pulp Ltd. in partnership with Svante Technologies, uses Svante’s solid sorbent technology to capture biogenic CO₂ from the mill’s recovery boiler flue gas. The unit entered service on December 18, 2025, and will generate data to inform a future commercial‑scale deployment.
The pilot is a key element of Mercer’s “biorefinery transformation” strategy, which seeks to convert its pulp mills into multi‑product facilities that generate revenue from lignin extraction, advanced biofuels, and carbon capture. The company has faced significant financial headwinds in recent quarters, reporting a net loss of $80.8 million and negative operating EBITDA in Q3 2025, a sharp reversal from the $16.7 million net income reported in Q4 2024. The carbon‑capture initiative is therefore positioned as a potential revenue generator and a hedge against commodity price volatility.
Management emphasized the strategic importance of the pilot. Chief Sustainability Officer Bill Adams said the demonstration is “an important and cost‑efficient step” that will provide operational data for scaling up. CFO Scott Gardner noted that testing the technology in an operating pulp mill environment is critical for assessing commercial viability and cost performance. The company’s leadership views the pilot as a way to diversify revenue streams and improve long‑term profitability amid a challenging market.
If the demonstration proves successful, Mercer could install a larger facility capable of capturing up to 500,000 t of CO₂ per year, potentially generating significant revenue from carbon credits. The pilot also supports the company’s broader goal of reducing its carbon footprint and meeting growing regulatory and customer demand for sustainable products.
The launch comes at a time when the pulp and paper industry is under increasing pressure to decarbonize. Svante Technologies, a leader in solid sorbent carbon capture, has expanded its manufacturing capacity with a new gigafactory, underscoring the scalability of the technology. Mercer’s investment aligns with industry trends and positions it to capture a share of the emerging carbon‑capture market.
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