The Ontario government announced plans on Thursday to invest $4.5 million into a bio-refinery plant to produce eco-friendly products in Thunder Bay.

The grant will assist FPInnovations establish a pilot plant, which will help with the production of green chemicals from wood for use in industries such as mining and construction, as a replacement for petroleum-based chemicals. 

"This investment will help Ontario's forestry sector grow and help to create jobs in Thunder Bay, said Michael Gravelle, the Minister of Northern Development and Mines and MPP for Thunder Bay-Superior North, in a release. 

"As a local MPP, I am delighted to see our government's continued commitment to building up the North by investing in innovative projects such as this one."

The project will help make the pulp and paper industry in Ontario more profitable and sustainable, by moving away from newsprint to other products, said Pedram Fatehi, the industrial research chair in green chemicals and processes at Lakehead University.

"[The industry is] struggling because their main product was newsprint," he said. "Newsprint consumption is very low now. So they want to convert their current process to something that is more profitable. 

The pilot plant will be housed at the Thunder Bay plant of Resolute Forest Products, which is pledging an additional $3.5 million for the project.

According to a press release, the new plant will speed up the mass production and successful commercialization of green bio-chemicals derived from wood.