Dec 21, 2007. /Lesprom Network/. Norske Skog will, in cooperation with the Norwegian forest owners, establish a joint venture to develop and produce wood-based biofuel. A prototype facility for biodiesel will be built in connection with Norske Skog Follum at Honefoss. The new the company will be jointly owned by Norske Skog (60%) and the forest owner cooperatives (40%), and will be established with equity of NOK 30 million (nearly $5.36 million). Norske Skog aims to establish full-scale biodiesel production. Such a plant will require 1-1.5 million cubic meter of wood per year and will produce 65 000 - 100 000 tonnes of biodiesel, corresponding to 4-6% of Norway's overall consumption of diesel in the transport sector. The long-term objective is to develop a global enterprise in biodiesel production and sale. The investment in a prototype for biodiesel production at Follum is estimated at NOK 100 - 200 million ($18-36 million). Further capitalisation will be decided at a later date. The agreement is subject to approval by the board of directors of the companies involved.