​Energy and climate change

Steelmaking and rolling processes are energy intensive. Achieving the highest possible level of energy efficiency is very important for Outokumpu. Our aim is to minimize total energy usage from a life-cycle point of view and reduce the direct environmental impact. We recognize the need for energy to be used efficiently. In addition to world class energy efficiency, we also aim to minimize the Group's effect on climate change.

Energy efficiency

Outokumpu's production sites use a range of energy sources, such as natural gas, propane, heavy fuel oil and electricity. Outokumpu's approach to energy efficiency is long term, and the target is a continuous improvement of a 1% reduction yearly. Energy efficiency is part of the management systems at all production sites. The largest energy-saving potential lies in the use of process gas or CO gas from ferrochrome production, the recovery of waste heat, improved process integration and improved efficiency in using raw materials.

In all new investments or replacement investments, energy efficiency is improved and energy saving is a target. We also systematically monitor and analyse energy consumption. Cumulative improvement in energy efficiency achieved by Outokumpu in 2016 was 12.7% since 2010, against the baseline of 2007-2009. 

Outokumpu participates in low-carbon energy programs in nuclear power, wind power, hydropower, combined heat and power and LNG mainly in Finland but also in Norway and in Germany. In 2016, 32% of electricity came from renewable sources, 35% from nuclear power and 33% from fossiles and turf. 

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Climate change

Outokumpu contributes to climate protection with a specific target to reduce its carbon footprint by a further 20% from the 2007-2009 baseline by 2020. Primary actions to reduce carbon footprint are energy effciency, increasing the proportion of low-carbon electricity and aiming for effciency improvements through optimal capacity utilization and yield improvement in production. Sustainable aspects are gradually being integrated into our logistics and transportation solutions.

In 2016, Outokumpu committed to a science based target on CO2 intensity. Corresponding reporting on this target will replace carbon profile monitoring in 2017.

Latest results

In 2016 the carbon profile could be reduced by 13.3% compared to the baseline, on track with the 2020 target. This good result was caused by an improvement in energy efficiency and a significant reduction in the electricity emission factor of Outokumpu's electricity mix.

See all climate change related figures in the reporting tool. More information on the climate change and our results is also available in our latest annual report.

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Emissions trading

Outokumpu is participating in carbon dioxide (CO2) emission trading according to the EU ETS legislation. Outokumpu has been participating in trading according to ETS since beginning of 2005. Currently 5 production sites are included: Tornio Works, Avesta Works, Sheffield primary products SMACC, Nyby Thin Strip and Degerfors.

The emissions trading (or cap and trade) system is an administrative approach used to control pollution by providing economic incentives for achieving efficient reductions in the emissions of pollutants. The European Union Emission Trading Scheme (or EU ETS) is the largest legally binding multi-national, greenhouse gas emissions trading scheme in the world and was created in conjunction with the Kyoto Protocol.

Our regulatory environment

Outokumpu’s main production operations in terms of energy consumption and carbon emissions are located in Europe. More than 90% of Outokumpu’s direct emissions fall under the CO2 Cap & Trade system. The European Emissions Trading Scheme places a direct financial cost on production emissions and the indirect costs of emission trading are reflected through higher electricity prices. These two elements raise Outokumpu’s marginal production costs in relation to our global competitors. The emissions trading scheme has also created an administrative burden for European companies. Outokumpu emphasizes the need for global regulation in efforts to transfer to the low-carbon society.

The progress and fulfilment of these targets in our energy and low carbon program is reported annually in our annual report. In order to view latest report please see our Reporting section.