Valmet reaches 100% carbon neutral electricity purchases in Finland and Sweden

To explore the role of electricity in the environmental impact of Valmet’s own operations more thoroughly, we invited Victoria Larsson, VP, HSE at Valmet, to discuss the topic with us.   

Victoria, what should be understood about electricity in this context?  

There are several aspects that need to be understood. First, electricity consumption is the biggest source of carbon dioxide emissions from Valmet’s own operations, and something every Valmeteer can influence through their daily behaviors. Second, electricity cost is a significant expenditure for us, and third, we should not take electricity supply for granted, as it is vulnerable to different factors.  

To reduce electricity-related emissions, should Valmet be more concerned about its overall consumption or the way it has been produced?  

In the big picture it is both. As a company, we need to do more with the electricity that is produced and that is why in the climate program we focus on making sure electricity is used more efficiently. At the same time, we work to become less dependent on carbon-intensive electricity and switch to carbon neutral production.  

What are the concrete actions that Valmet does to reduce electricity related emissions?  

We need to remember that Valmet operates in over 250 locations globally, meaning that even small local energy efficiency improvements matter. Initiatives such as switching to LED lights or turning off workshop lights at lunchtime and turning off cooling in vacant conference rooms, lead to significant savings altogether. By fixing compressed air leaks and improving heating and ventilations systems we also make easy savings.

Lately many of our locations in China, South America and Europe have utilized the possibility to start producing CO2 free electricity themselves by installing solar power stations, and there are studies ongoing to further installations in several countries.   

It has been calculated that in 2022 Valmet reached a 45% reduction in CO2 emissions in its electricity purchases compared to the year 2019. What does it mean and how was that achieved?   

In addition to the concrete energy efficiency actions just mentioned, many of Valmet’s locations have started to switch to carbon-neutral electricity suppliers reducing emissions. The big step in 2022 was that the Jiading workshop in China and the Finnish operations started purchasing part of their electricity carbon-neutral, followed by many other locations such as Lenox in the United States.  

By the end of 2023, Valmet will achieve 100% carbon-neutrality in its electricity purchases in the Nordic countries Finland and Sweden. What is the significance of that? 

The impact really is significant, as these countries represent 60% of Valmet’s total electricity consumption and about 30% of Valmet’s total CO2 emissions from electricity. Through this, we are saving a total of 32 000 tonnes of CO2, which is equivalent to driving almost 223 million kilometers by car.  

I think we as Valmeteers should be really proud of this achievement! Behind each decision to invest in energy efficiency and purchase carbon neutral electricity is a lot of effort from many of our colleagues, and it is great to see the results in the numbers.   

Buying 100% carbon neutral electricity sounds simple, but is it so?  

It is easier in some countries than others. For example, in Canada Valmet’s existing suppliers already provide hydroelectricity. In other countries, electricity suppliers do not yet offer carbon neutral options and we need to wait for the local infrastructure and market to develop.

However, in countries where there are options, choosing carbon neutral electricity can require a marginal cost increase to the business. This is where the company’s energy efficiency improvements come in, as savings in the electricity costs leave room in the budget for the carbon neutral options.   

Finland and Sweden have a unique integrated electricity market, and Valmet also has such large volumes that the electricity purchases are hedged through a broker to better control the costs. Due to that, Valmet’s treasury team can closely manage the costs and purchases of carbon neutral electricity. 

In your opinion, what could be the next steps in reducing electricity-related CO2 emissions in Valmet’s own operations further?  

As a company, we need to continue the work to switch to carbon-neutral electricity and heating suppliers in all countries globally. I also believe we should increase the number of internal energy audits to find more possibilities for energy efficiency improvements. Finally, we can be better at sharing good practices and learning from each other how to better manage and save electricity in our facilities.

*Baseline and calculations in article do not yet include the Tissue Converting business unit that Valmet acquired from Körber in November 2023. Baselines will be updated in 2024.