"The investment in a prototype for bio-diesel production at Follum is estimated at NOK 100-200 million (USD 17.91 million - USD 35.82 million)," Norske Skog said in a statement.
Norske Skog will take 60 percent and the forest owner cooperatives 40 percent of the venture, the company said.
The chairman of the Forest Owners Union, Helge Evju, told financial web site E24 Friday that they were also united in opposing recent plans to split up Norske Skog according to geographic or business areas.
A triumvirate of Norwegian business tycoons, Petter A. Stordalen, Øystein Stray Spetalen and Ove Gusevik have recently acquired a 5.78 share of Norske Skog through their company Unionen, and have floated a number of ideas to rejuvenate the Norwegian paper giant.
The forest owners have a nearly 15 percent stake in Norske Skog. Evju praised many of the recent Unionen suggestions for the future of the company, but said there was unanimous opposition to any splitting of Norse Skog.
