Identify what needs to be done to cope with the effects of climate change and reduce the impact their activities have on the planet, preparing for a different but possible future. A well-known supplier has laid out its path towards decarbonisation. And the watchword is: supply chain
As part of the initiatives to combat climate change that different countries are putting in place, including on a global level, there are concrete actions that industry can and must pursue. Valmet is among those who are already moving in this direction. The company has set itself very precise internal targets and has drawn up a detailed and ambitious climate programme aimed at reducing its CO2 emissions.
Launched in March 2021, Valmet’s new climate programme is entitled ‘Forward to a carbon-neutral future’ and has been drawn up in line with the UN Sustainable Development Goals and the Paris Agreement – concluded during Cop 21 in 2015 – which set the goal of limiting the global temperature increase to a maximum of 1.5 °C above pre-industrial levels.
Over the past decade, the approach to the topic of sustainability has greatly changed, “we have seen the development of a cultural concept of sustainability that has moved from considering safety in operations to environmental management within operations» says Laura Puustjärvi, head of Sustainability di Valmet, who presented the Finnish multinational’s programme at the Aticelca 2022 Congress. «A concept that has evolved and today we speak of sustainability as a holistic approach that covers all different aspects of the companies’ value chain, no longer just the company’s operational activities but also how these activities and even supply chains are managed. And also how any negative aspects that, from a social and environmental point of view, arise in the realisation of services, products and whatever is being provided are addressed».
As part of this more general approach, the goal is to enable a paper production process that is totally decarbonised
A studied transition
«Climate change and global warming have a huge impact on what companies do and how they do business» Puustjärvi continues. «They are aiming to introduce carbon footprint control, thus transforming production and production cycles very quickly, reducing dependence on fossil fuels, increasing energy efficiency and moving more and more towards «CO2 free» energy sources. In our company, we believe that technology is crucial in this transition phase». The climate programme «Forward to a carbon-neutral future» therefore aims to push the green transition not only in internal operations but also among employees and suppliers – there are more than 20,000 in more than 50 countries worldwide – and corporate customers.
The approach adopted is a scientific one. The entire programme, she explains, is based on data and data analysis, with targets also validated by independent bodies that aim to reduce emissions throughout the supply chain. The key element, however, is to achieve the reduction of CO2 emissions without the use of offsetting.
Carbon neutral: market and regulatory requirements
We walk a fine line between risk and opportunity. The need to meet environmental sustainability and green transition targets represents both a challenge and a great business opportunity for the paper industry.
The main drivers of the green transition come from several fronts. First of all, the stakeholders, namely the financial community, banks, investors and analysts who are lobbying for companies to present their ESG (environmental, social and governance) story. Climate and CO2 emission reduction targets are also increasingly present in agreements with banks, «they are really becoming the norm» says Puustjärvi, «and allow for better margins».
Not only that, consumers are also demanding products that have a reduced environmental footprint, «they demand carbon neutral products and we in this sector are ready to give them what they want». Various market research shows that consumers, especially in northern Europe, are even willing to accept cost increases to get these kinds of products, so «even our direct customers in the Nordic countries are willing to pay a little bit more to make sure from us that the technologies we supply them are truly carbon neutral. We have customers who do not buy anything that uses fossil fuels». A transition that began in recent years.
But the price per tonne of CO2 is also a driver: «when it gets close to 100 EUR per tonne, reducing dependence on fossil fuel becomes appropriate».
Also on the regulatory side, more structured principles and recommendations are being articulated that are geared towards the sustainability of companies and are now becoming national regulations to be complied with. «Europe is very united in tackling the problem of climate change and environmental warming» Puustjärvi recalls. «In Finland we have a target to become carbon neutral by 2035, in Sweden there is a similar target, the EU in general has a target to become carbon neutral by 2050. Italy plans to reduce CO2 emissions by 33 per cent by 2030 with 80 billion EUR of EU funds to support this transition So it is an ongoing process in virtually all European countries.
Companies need to understand what they need to do to make this transition a reality and play their part.
Tangible objectives and possible solutions
Valmet’s «Forward to a carbon neutral future» climate programme sets targets for its entire value chain, including its operations and activities, the supply chain and the use phase of its technologies. The intention is to achieve an 80 per cent reduction in CO2 emissions in its operations and a 20 per cent reduction in the supply chain by 2030, compared to the 2019 baseline. When using its own technologies, the company aims to achieve a further 20 per cent cut in energy consumption compared to its current technology portfolio.
«We evaluate every aspect, from the production and transport of the components we use, to how we process them and, again, how we transport them back to our customers, and how they use our solutions». It has been calculated, she explains, that around 95 per cent of the entire footprint of the value chain is produced in the use phase of the technologies, which is why it is crucial to continue investing in research and development, «and that is what we are doing» she says. In 2021, Valmet has invested EUR 98 million in R&D, to create new products and technologies, to develop the existing offering so that it can become more efficient in terms of energy and water consumption, and to reduce its carbon footprint. The company has also launched «Beyond Circularity», a new programme that invests an additional EUR 40 million in the green transition and reducing the environmental footprint. «What we want to do is to create an ecosystem, forging partnerships that enable this transition for the whole industry and for the whole sector». The ultimate goal, he adds, is to enable paper and board production processes that are 100 per cent carbon neutral by 2030, «by developing new technologies but also by relying on the ones we already have and are working on precisely to enable this change starting today».
Acting on the value chain
In addition to making the most impactful parts of the papermaking process more efficient – first and foremost the drying section, which, Puustjärvi reminds us, is the most energy-intensive part of the entire paper production cycle, absorbing around 83% of the overall energy demand – Valmet has studied solutions for the entire production chain.
«We want to reduce emissions in our supply chain by 20 per cent by using recycled steel instead of primary steel, which causes 90 per cent more CO2impact than recycled steel».
In addition, he continues, «among the 20,000 suppliers we use, we have also identified the ‘top fifty’ who are the main suppliers and calculated the value chain emissions over the last 10 years. By committing these suppliers to reduce their emissions, we too will be able to further reduce our impact».
The same has been done on the logistics front. «Also in the transport segment we are consolidating and better planning our share of spending on suppliers who already provide us with low-carbon transport, for example by using fleets that use renewable energy sources.
We also plan to make the energy in our locations even more efficient by replacing fossil fuels with renewable energy in our operations, thus reducing emissions by 80 per cent by 2030. Finally, we also care about how people travel to work on a daily basis, whether they use hybrid cars, public transport or electric cars; we can support our employees so that they too can reduce their emissions on their way to work».
No one knows what the world will look like in terms of energy in 2030, how the green transition will take place and what solutions will be available in the future, «for this reason» Puustjärvi concludes, «we have to keep an eye on the situation and figure out how to move».