This article has been produced and originally published by Capgemini as a part of their On Pulse content series. Visit Capgemini's website to listen to the full podcast (in Finnish).
Outokumpu is the leading producer of sustainable stainless steel globally – how does this support achieving the carbon neutrality objectives for all of Finland? And what is the green transition of steel production about?
Capgemini’s On Pulse podcast talks about sustainable growth. There has been a lot of talk about sustainability, but words are no longer enough: we need action that results in change in and outside our own organization.
Capgemini’s Head of CX & Design Nina Antipin and Director of Automation Jaakko Lehtinen look for sustainable growth in this podcast. Nina’s passion is to help organizations to reach their full potential, while Jaakko helps companies to understand the opportunities provided by smart process automation. In each episode, Nina and Jaakko have rotating expert guests sharing their lessons learned from actions that have incorporated sustainable innovation into day-to-day operations and the corporate culture.
In the newest podcast episode, Nina and Jaakko have Outokumpu’s CFO Pia Aaltonen-Forsell and Juha Erkkilä, Outokumpu’s VP, Group Sustainability, Excellence & Reliability as their guests.
Outokumpu steel is made of 94% recycled materials
There's a lot to consider when it comes to steel production and sustainability. The use of raw materials is one of the key questions. Outokumpu's steel is made of 94% recycled materials, which is, internationally, a very high percentage.
“Most commonly, the scrap is procured from nearby markets, meaning that European production uses European scrap. This scrap comes from mundane goods, such as pots and cars”
The use of scrap is also key from the point of view of emissions: up to two-thirds of a carbon footprint is caused by raw material and emissions from the supply chain. It is easy to consider that production caused the biggest emissions.
“Because raw material chains are the most significant source of emissions, we need to consider how to act sustainably in the end-to-end supply chain. We must start by confirming whether we actually know all of the parts of the end-to-end supply chain,” Aaltonen-Forsell says.
The Kemi Mine is the EU’s only chrome mine
Outokumpu has a unique position in Europe, thanks to the Kemi Mine, which is the only chrome mine in the EU. Outokumpu aims to make the mine completely carbon neutral by the end of 2025. According to Aaltonen-Forsell, there are no such carbon-neutral mines anywhere in the world, as far as she knows.
“We want to set an example of being able to decarbonize a mine. Perhaps the only carbon-neutral mine in the world will soon be found in Finland,” Erkkilä says.
In a carbon-neutral mine, it is essential that carbon-free electricity and biofuels are used. Aaltonen-Forsell also reminds us that the gas used in mining operations should be biogas.
Outokumpu accounts for approximately 4% of Finland’s electricity consumption, making it a significant consumer of electricity. The majority of this massive electricity consumption is used in Outokumpu’s electric arc and ferrochrome furnaces. In fact, Outokumpu’s Tornio unit is one of the biggest individual electricity consumers in the Nordics.
Yet, Aaltonen-Forsell considers electrification to be a good thing when compared to the use of coal, for example. In Finnish and Nordic industry, carbon-neutral electricity is a considerable competitive advantage, the importance of which the energy crisis last year emphasized further.
“Electric arc furnace technology is the one that makes it possible for us to use scrap as mentioned before. In a way, this places us at the core of the circular economy on the whole. Of course, we also want to contribute to ensuring that electricity is used efficiently.”
During the energy crisis, Outokumpu made major decisions to improve energy efficiency. The aim now is to achieve an 8% improvement in energy efficiency in two years. This is an ambitious goal, as an improvement of only one-half of a per cent over a year would normally be a good achievement. In general, the demand for electricity will increase, but, fortunately, the electricity available in Finland is more sustainable than in many other countries.
Soon, Outokumpu will have other promising news to tell in addition to the carbon-neutral Kemi Mine: the share of recycled feedstocks has been increased, and indicators suggest that the amount of CO2 emissions per tonne of steel, for example, has plunged. In the early 2000s, the emissions per tonne of steel were 7 tonnes, but now, the emissions have decreased to 1.7 tonnes.
Companies’ sustainability goals are not visible in the form of concrete action
According to Capgemini Research Insitute’s Conversations for Tomorrow: Climate Tech for a Sustainable Planet report, the challenge is that the sustainable and ambitious goals of companies do not lead to concrete action. According to the study, only 21% of executives agree that the business case for sustainability is clear. On the other hand, sustainability forerunner companies report that their revenues per employee are 83% higher and net profit margins are 9% higher when compared to the average.
“Millennials and Gen Z, in particular, also consider sustainability to be an important factor for well-being at work. It also increases the motivation to work towards a common goal, because sustainability is a point of interest at the personal level as well,” Erkkilä says.
Outokumpu has worked a lot to develop products that promote carbon neutrality, and the already launched Outokumpu Circle Green product has attracted a lot of interest. It is not yet easy to find business models that are based on sustainability – if it were, it would be the prevailing custom.
“We still need to strive to this end. Producing steel is a serious business that involves large-scale processes and material flows. Therefore, we cannot tinker around but must do things properly. We have already obtained formidable figures regarding the reduction of carbon emissions.”
At the end of the episode, Aaltonen-Forsell and Erkkilä issue a challenge to the sustainability directors of other businesses:
“Consider how you could promote the circular economy and how you could implement the organization’s sustainability goals so that everyone can contribute to them.”