METSÄ BOARD Annual review 2023
paperboard produced. Energy efficiency actions of a smaller scope were also completed in 2023, including the optimisation of energy use in drying at the Joutseno BCTMP mill and the Äänekoski paperboard mill. The turbine and generator investment at the Kyro paperboard mill’s biopower plant is expected to be completed by the end of 2024. Thanks to the new turbine’s improved efficiency, the biopower plant’s electricity self-sufficiency will increase from 30 to 50 per cent. Greenhouse gas emissions in the value chain The commitment of Metsä Board’s suppliers to science-based greenhouse gas emissions (SBTi compliant) is discussed on page 35, under Progress in targets . Greenhouse gas emissions in Metsä Board’s value chain are curbed by Metsä Group’s wood supply target of reducing fossil-based carbon dioxide emissions from wood supply in Finland by 30 per cent from the 2022 level by 2030. Emissions are reduced by introducing electric and biogas lorries, for example. The value chain’s greenhouse gas emissions are also reduced through emissions reduction targets jointly set by Metsä Group and its suppliers. The joint 2030 target of Metsä Group and VR, a logistics group, will halve emissions from transports covered by the cooperation. For Metsä Group, these actions mean an annual emissions reduction of approximately 14,000 tonnes of carbon dioxide equivalent, corresponding to more than 25,000 average lorry transports. VR also handles Metsä Board’s rail trans- ports in Finland. The joint target with Royal Wagenborg, a Dutch maritime logistics company, is to reduce products’ carbon dioxide emissions from marine transports by 30 per cent (per tonne per mile) from the 2021 level by 2030. Logistics emissions will be reduced by planning efficient routes, minimis- ing transport distances, optimising fill rates and favouring rail connections over road connections on selected routes. For example, in the transport of products from the Kemi paperboard mill to ports, the load size of transport units is maximised, and all fuels are fossil free. At the Tako paperboard mill, products are transported fossil free to the nearby terminal, and from there, shipping containers are delivered by low-emission lorries to the port. Carbon balance of forests In 2023, Metsä Group adopted regenerative forestry principles. They include measures in wood supply and forest services with which the state of nature will begin to improve verifiably in Finland. Regenerative forestry practices will increase forests’ carbon sequestration , biodiversity and ability to adapt to climate change. Forest certification demonstrates that the forest has been managed sustainably. Key practical actions related to climate change mitigation include the following: • Forests are swiftly renewed after regeneration felling. The faster and with better quality a new forest is established, the sooner it begins to store carbon from the atmosphere. Cultured seeds and seedlings of local tree species are used in renewal whenever available. Domesticated trees grow better than naturally generated trees. • Young stand management and thinning ensure that stands remain vital, and growth is focused on the best trees. • Forest fertilisation improves tree growth, maintains the growth condi- tions of the soil and ensures the vitality of trees.
• Increasing the share of continuous cover forestry helps curb and adapt to climate change, as it minimises the GHG emissions of peatland forests. The goal of continuous cover forestry is to maintain a steady surface level of groundwater to prevent the carbon stored in peat being released into the atmosphere and to minimise impacts on waterbodies.
caused by harvesting conditions. Metsä Group’s regenerative forestry principles and sustainable forest management services help forests adapt to climate change and promote forest biodiversity. Regenerative forestry is discussed in more detail under E4 – Biodiversity and ecosystems .
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Energy consumption by energy source
GHG emissions
Metsä Group’s Wood Supply and Forest Services have public sustainability targets for these measures, and they are presented in the table on page 34 .
%
2023
2022
tCO 2 e
2023
2022
Renewable, wood-based Other renewable energy
73
67
Direct GHG emissions (Scope 1)
201,984 300,726
264,961 287,640 142,436
Strategy and financial targets
0.5
3.2
Location-based indirect GHG emissions (Scope 2) Market-based indirect GHG emissions (Scope 2) GHG emissions in the value chain from material categories (Scope 3)
Products The aspects most relevant in terms of the climate impact and carbon footprint of paperboard packaging are the energy used in its production and the light weight of the paperboard itself. As Metsä Board shifts to using fully fossil free energy in its production, the carbon footprint of the compa- ny’s products will continue to decrease. Reducing the weight of paperboard is a focal area of Metsä Board’s R&D operations. Metsä Board’s paperboards offer an alternative to packaging materials made of non-renewable raw materials such as plastic. According to an independent study, the carbon footprint of a cherry tomato box made of Metsä Board’s paperboard is as much as 80 per cent smaller than that of a box made of recycled plastic (source: Natural Resources Institute Finland). Metsä Board aims to replace the fossil-based raw materials and packag- ing materials still in use with fossil free alternatives by 2030. The transition to fully fossil free raw materials is being promoted collaboratively in Metsä Group’s strategic R&D programme. Replacing fossil-based binders used in Metsä Board’s paperboard coatings with bio-based alternatives was a key focus of pilot and mill trials in 2023. Investigation of bio-based alternatives for product packaging materials were conducted collaboratively in Metsä Group. All in all, cooperation with the scientific community and raw mate- rial providers is important. The progress of work is monitored by Metsä Group’s procurement organisation. The share of fossil free raw materials and packaging materials is pre- sented in the table on page 34 . Further information about the company’s R&D operations is available under section E5 – Resource use and circular economy and in the Report of the Board of Directors, under R&D and innovation . Climate change adaptation Climate change adaptation calls for adaptation to both acute hazards such as extreme weather phenomena and chronic hazards, caused by the impacts of climate change on water availability, harvesting conditions, growth conditions of different tree species, or snow, storm, drought, forest fire, insect, and fungi damage in forests. Metsä Board prepares for hazards from extreme weather phenomena at both the company and mill level. Examples of actions include controlling water levels with dam arrangements and ensuring power distribution in exceptional situations. The supply chain is preparing for alternative transport routes or partners. The company’s mills are not located in areas at high water risk, which supports the company’s competitiveness in the face of climate change. Metsä Board’s target of reducing the use of process water and enhancing the recycling of water within the process also reduces the water risk. Metsä Group’s wood supply always considers weather conditions and related changes in harvesting. Wood is harvested only in suitable conditions. If required, wood storages can be used to smooth out variation
8
Value creation
Nuclear power
16 10
15 15
5,108
Fossil-based fuels
1,792,006
2,274,825
Financial development 10 Key figures 12
1 Purchased goods and services
479,875
656,936 68,884
Energy consumption
2 Capital goods
57,651
3 Fuel and energy-related activities (not included in Scope 1 or Scope 2 emissions) 4 Upstream transportation and distribution
57,772
111,064
MWh
2023
2022
Report of the Board of Directors
FUELS Oil
282,264
368,052
20 72
• Sustainability statement • Sustainability statement assurance report
310,423 412,864
298,274 573,967
5 Waste generated in operations
2,919
1,984
Gas Coal
6 Business travel
813
315
0
0
7 Employee commuting
1,889 4,732
1,897
Waste
43,825 17,829
63,317 95,619
9 Downstream transportation and distribution
8,490-
74
Consolidated financial statements
Peat
10 Processing of sold products
268,042
356,970
Wood-based fuels
5,010,322
4,892,216
11 Use of sold products
890
3,883
78 Notes to the consolidated financial statements 126 Parent company financial statements 129 Notes to the parent company financial statements 142 The Board’s proposal to the Annual General Meeting for the distribution of funds 143 Auditor’s Report 147 Shares and shareholders 151 Ten years in figures 152 Taxes 153 Production capacities 155 Calculation of key ratios and comparable performance measures Corporate governance 157 Corporate governance statement 165 • Board of Directors of Metsä Board 168 • Corporate Management Team of Metsä Board
12 End-of-life treatment of sold products
582,863 52,294 2,294,716 1,999,098
657,177 39,174
PURCHASED ENERGY Purchased electricity and heat, renewable wood-based Purchased electricity and heat, other renewable Purchased electricity and heat, fossil-based Purchased electricity and heat, nuclear power
15 Investments
663,692
899,056
Location-based total GHG emissions Market-based total GHG emissions
2,827,426 2,682,222
7,543
250,532
22,539
239,429
GHG intensity
1,200,337
1,263,229
2023
2022
GHG intensity based on sales, Scopes 1, 2, 3 (market-based), tCO 2 e / euros GHG intensity based on sales, Scopes 1, 2 (market-based), tCO 2 e / euros GHG intensity based on production, Scopes 1, 2 (market-based), tCO 2 e / t
0.0010
0.0011
CONSUMPTION OF OTHER SELF-GENERATED RENEWABLE ENERGY Consumption of self-generated hydropower 29,349
25,238
0.0001
0.0002
ENERGY SOLD Energy sold, renewable wood-based
0.09
0.12
9,288
13,164
Electricity sold, fossil-based
442
434
Wood-based biogenic carbon dioxide emissions
Energy sold, renewable wood-based
52,656
51,820 2,025
Heat sold, fossil-based
7,930
tCO 2
2023
2022
Wood-based biogenic carbon dioxide emissions
1,984,088
1 937,318
TOTAL ENERGY CONSUMPTION Total energy consumption, renewable wood-based Total energy consumption, other renewable
5,612,070
5,726,287
36,892 799,107
275,770
Total energy consumption, fossil-based Total energy consumption, nuclear
1,268,202 1,263,229 8,533,488
1,200,337 7,648,406
Total energy consumption
ENERGY INTENSITY (MWh/sales) Energy intensity
0.004
0.004
170 Remuneration report 174 Investor relations and investor information
36
37
Report of the Board of Directors | METSÄ BOARD ANNUAL REVIEW 2023
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