A wind power agreement is helping Outokumpu reach its climate goals
Wind power agreements signed by Outokumpu and Gasum help Outokumpu achieve carbon neutrality in its operations. The cooperation will produce results if both parties commit to it for the long term.
Wind power is already being used in the steel industry to some extent, but wind power has so far had a smaller role in when it comes to mines. However, the steel industry giant Outokumpu knows that wind power is also suitable for mining activities.
“Outokumpu is Finland’s biggest individual consumer of electricity. We are responsible for about 4% of the whole country’s electricity consumption. For this reason, it is important that this electricity is generated sustainably and by using renewable energy sources. The emission factor of electricity has a direct effect on the total carbon footprint of our end products,” says Juha Erkkilä, Outokumpu’s VP of Group Sustainability, Excellence & Reliability.
The wind power supplied on the basis of the agreements between Outokumpu and Gasum will be used directly. In practice, the wind power supplied on the basis of the agreement covers all of the electricity consumption of Outokumpu’s Kemi mine and more.
“The agreement is meaningful, as this kind of longer time span supports us in the long term. Wind power is, of course, also competitive when it comes to price, but the main reason we chose wind power is that using it does not produce emissions,” Erkkilä says.
Once in effect, the agreements are an important step towards Outokumpu’s ambitious climate goals. The agreement signed last year is a Power Purchase Agreement (PPA), which wind farms typically enter into for the long term with their partners.
“Gasum’s role in PPAs is to make it possible to efficiently meet the needs of the electricity producer and user by offering PPAs to all kinds of electricity users, regardless of industry,” says Tommy Mattila, Gasum’s Vice President, Industry and Traffic.
Working towards the goals of the Paris Agreement
The PPAs signed by Outokumpu are a good example of how all possible measures should be taken to reduce one’s carbon footprint.
Outokumpu is the only stainless steel manufacturer in the world whose climate goals comply with the Paris Agreement on climate change: the company’s goal is to operate in a completely carbon-neutral way by 2050.
“We will not be able to reach these ambitious climate goals alone – we need strong partners,” Erkkilä says.
The goal of the Paris Agreement is to limit the increase in the global average temperature to 1.5 °C above pre-industrial levels.
“Emission reduction needs to happen globally, so we also include our supply chain’s emissions in our carbon footprint,” Erkkilä says.
When one’s goals apply across multiple decades, it is natural to choose a partner with whom these goals can be worked towards in the long term and on the basis of similar values.
According to Erkkilä, Gasum felt like a natural choice of partner for Outokumpu, as the two companies have worked together before. Outokumpu and Gasum have worked together on, for example, the Tornio Manga terminal, LNG deliveries and energy market services.
“This kind of project requires mutual trust. Both parties must have great faith in the work,” Erkkilä says.
The climate efforts apply to both direct and indirect emissions as well as emissions from both consumer goods and raw materials.
“We are able to have an effect on all these areas by working with Gasum,” Erkkilä says.
Towards the next milestone
Outokumpu is already looking at 2030, which, according to Erkkilä, is the company’s next milestone on the road to reaching the climate goals of the future.
“Our goal is to reduce our emissions by 42% compared to the 2016 level by 2030. In the future, the carbon footprint of the electricity we use will be further reduced, and the direct and indirect emissions we produce will also be reduced in other ways,” Erkkilä says.
Outokumpu intends to reduce emissions in all emission categories at various locations around Europe and the Americas.
“Electricity and its source also have a very big role in these measures,” Erkkilä says.
According to Tommy Mattila from Gasum, Gasum would be happy to continue helping Outokumpu reach its carbon neutrality goals.
“PPAs like the one signed now are one way to do this. In addition, Outokumpu and Gasum are also looking at other possible options and solutions for reducing Outokumpu’s carbon footprint, both in production and in land and sea logistics,” Mattila says.
Pioneer in sustainable development
Outokumpu operates in the global stainless steel market.
Outokumpu’s history began in 1910 with the discovery of a rich copper deposit on a hill called Outokumpu in the municipality of Kuusjärvi in Finland.
Sustainable development and the circular economy are at the heart of Outokumpu’s operations, as stainless steel is 100% recyclable. Stainless steel is one of the most recycled materials in the world and it maintains its quality even when recycled. Outokumpu’s carbon footprint is the smallest in the stainless steel industry, being 70% smaller than the industry average.
Text: Pi Mäkilä