UPDATE 1-Finnish forestry group UPM presses ahead with biorefinery plans

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Jan 28 (Reuters) - Finnish forestry group UPM has decided to start the basic engineering phase for a biorefinery with annual capacity of 500,000 tonnes of high-quality renewable fuels including sustainable jet fuel, it said on Thursday.

These initial preparations for the plant - to be located either in Kotka, Finland, or Rotterdam in the Netherlands - would last at least 12 months, after which UPM said it would make the investment decision.

The company said its solid wood biomass-based residues and side streams would play a substantial role in the feedstock pool.

UPM said in January last year that it had decided to invest 550 million euros ($665 million) in a new biorefinery in Leuna, Germany, to produce a range of 100% wood-based biochemicals, enabling a switch from fossil raw materials to sustainable alternatives. ($1 = 0.8269 euros) (Reporting by Tarmo Virki in Tallinn Editing by David Goodman)