Stora Enso example Jan Bresky Stora Enso Environment

Demonstrate and Assess New Tools for Environmental SustainabilityDemonstrate and Assess New Tools for Environmental Sustainability

Stora Enso example

Jan BreskyStora Enso Environment

DANTESDANTES

http://europa.eu.int/comm/environment/life/home.htm


PROJECT INFORMATIONPROJECT INFORMATION Stora Enso

• Stora Enso is the largest forest company in the world, and is also the world oldest shareholding company still in operation.

• We have always been dependent of the surrounding environment (forests)

• Stora Enso is a global company with ca: 45 000 employees.

• Strategies developed within DANTES are Emission Trading and Supply Management. Two people from Stora Enso Environment have actively been involved in DANTES.


TOOLS & METHODSTOOLS & METHODS Company answer to political intentions = Strategy

• Emission Trading:How to integrate carbon reduction policies into day to day operation at our mills.

• Supply Management:How to secure Stora Enso’s Environmental standards through the whole supply chain.


STRATEGIESSTRATEGIES

• Global Awareness • International intentions (UN)• Federal political intentions• National political Intentions• Local political intentions

– International intention result = Kyoto Protocol 2008 to 2012

– Federal political intentions result = EU ETS– National political intentions result = Different National systems– Local political intentions result = Same system within the

national boarders in almost all EU countries

Emission Trading Background


STRATEGIESSTRATEGIES Carbon cycle

Bio carbon Bio carbon

Non-fossil CO2

Foss

il ca

rbon

Foss

il ca

rbon

Bio carbon

Forest carbon:Increase when growth is larger than harvest (active forest management is positive for the forest growth)

Product carbon pool:Increase when accumulation of fibre materials (examples: Timber products in buildings and furniture; paper in books and archives)

Fossil CO

2

Mix of fossil and non-fossil CO2 in the atmosphereAtmospheric pool



Carbon storage:

Forest vegetation 350 Gt

Forest Soils 800 Gt

Oceans 40 000 Gt

Atmosphere 800 GtSource: IPCC 2000

Global carbon emission equal to 6.3 Gt/yand terrestrial carbon uptake including forest is estimated to 1.7 Gt/ySource: IPCC 2000

Approximately Global Carbon Storage



Mill preparation for EU ETS

Trading year one starts Verification of emitted and traded amount for the previous year

Trading year two starts

Discussions for emission quotas for Kyoto I starts

2004 2005 2006Kyoto I starts2007

Trading year three starts

Time Schedule for Millsfor Verification of system and Emission Trading



• Setting of boundaries – Juridical owned energy production facilities

• Common emission calculation methodology – International, UNFCCC, Kyoto, WRI and WBCSD

• EU, Kyoto, WRI, WBCSD and IPCC– National, adopting EU regulations into National

legislations» Branch, adopting WRI and WBCSD methodology for

the Industry (NCASI)

Preparation and steps on how to meeting the challengesof EU ETS and Kyoto I (1)



• Control mechanisms– First Phase (EU ETS 2005 - 2007)

• Emissions– EU authorities

» National authorities and internal verification • Financially (IAS International Accounting Standard)

– Economic book keeping system of financial value Transparent revision for all involved authorities

– Second Phase (Kyoto I 2008 - 2012)• Like the first phase but on a global level

• Reporting structures (IFRIC International Financial Reporting Interpretation Committee )– Stricter emission reporting to authorities– Strict verified financial reporting to authorities

Preparation and steps on how to meeting the challengesof EU ETS and Kyoto I (2)



EmissionsFinancial

Emission grants

Hedge fund

Emitted quantity

Balancing the fond

Part of Mill, Division and Corporate financial report

EU ETS/Kyoto

Emission grants

Opening of account

Emission calculation

Emitted quantity

Emission trading

Report to authorities

Same source with two separate lines of different demands of verifications


STRATEGIESSTRATEGIES Calculation model

jord Authority interfaceMills CO2 Permit (Application) Production in tonAllocation free of charge 78 627 5 650 000 1CO2 Difference from production 4 139 MWh/t Steam from own productionActual mill data 0,7 2CO2 Emissions to air Ton 82 766 455 000Budget MWh/t Electricity from own production CO2 Allowances to be bought 4 139 0,2 3

7 130 000Cost of € / Ton 10 0 Tot GWh/t

Fuels Cost of € / Ton 15 41 388 0,9Oil in % Cost of € / Ton 18 62 082 Tot Energy production in GWh

15 Cost of € / Ton 20 82 776 5858 GWh in Allowances

Coal in % Prod Emiss Steam to be bought €/t CO2 9 Tot Cost Cost in €/ton paper30 Prod year 1 650 000 82 766 455 4 139 15 41 388 0,06

Prod year 2 700 000 89 132 490 10 505 15 105 054 0,15Natural Gas in % Prod year 3 750 000 95 499 525 16 872 18 168 720 0,22

0 Prod year 4 900 000 117 428 630 38 801 20 582 021 0,65Prod year 5 1 000 000 127 332 700 48 705 20 730 575 0,73

Bio energy in % 6 Year 1 Year 2 Year 3 Year 4 Year 555 Total electricity consumption in GWh 3 500 3 700 3 900 4 200 4 400

Purchased electricity in GWh 3 370 3 560 3 750 4 020 4 200Peat in % Own generation in GWH 130 140 150 180 200

0 Emissions from own electricity generation 18 392 19 807 21 222 25 466 28 296Efficiency Rate in own generation 0,75 4

Liquid Gas in % Fossil share in electricity market mix/GWh 263 Ton0 CO2 emissions from purchased electricity 44 316 44 184 44 053 43 658 43 395

Cost for CO2 in € for purchased electricity 443 155 441 840 440 525 654 870 650 925Tot in % Total cost for emissions in € 484 543 546 894 609 245 1 236 891 1 381 500

100 Tot, increased cost in €/ton product 0,75 0,78 0,81 1,37 1,38



Stora Enso Group level & cross boarder CO2 clearing

SE FinlandCO2 balance

SE SwedenCO2 balance

SE GermanyCO2 balance

SE CECO2 balance

SENAGHG balance

SE LA

SE A&PMill 1Mill 2:Mill n

Mill 1Mill 2:Mill n

Mill 1Mill 2:Mill n

Mill 1Mill 2:Mill n

Mill 1Mill 2:Mill n

EU/International Green house gas market

SEFS performing SE market activities

Schematic picture of Emissions Trading management in Stora Enso



Links to further information

• www.DANTES.info

• Strategies – Production: GHG Emission trading

• Tools & Methods – Other info: Conventions – More about Kyoto protocol

Documents

Stora Enso example Jan Bresky Stora Enso Environment