Climate benefit in Holmen’s value chain

The forest has the greatest climate benefit when wood-based products replace fossil material – the substitution effect. In 2021, Holmen’s operations helped to cut the amount of fossil carbon dioxide in the atmosphere by 6.9 million tonnes. This is equivalent to 15% of Sweden’s emissions.

We deliver solutions to the challenges of our age

Holmen delivers solutions to some of the biggest challenges of our time – meeting the needs of a growing population while at the same time halting climate change. Our growing forests reduce the amount of carbon dioxide in the atmosphere. Our products bind carbon dioxide and replace fossil alternatives. Our production of hydro power, wind power and bioenergy play their part in the transition to a renewable European energy system.

A value chain where every link counts

At Holmen, we believe that the climate question has to be viewed holistically, across the entire system. Just like the UN’s Sustainable Development Goal 17, Partnerships for the Goals, it is through partnership and collaboration with new and existing customers and suppliers that we create the greatest climate benefit.

Holmen’s long-term, sustainable forestry contributes towards several of the climate goals of the European Green Deal, including a fossil-free, circular economy and a fossil-free, affordable and secure energy supply.

Holmen also contributes renewable energy production which is controllable, thanks to our hydro power and bioenergy. These controllable renewable energy sources, which can be stored and turned off and on, are needed as an injection when non-controllable renewable sources of energy such as wind and solar power are unable to supply electricity due to a lack of wind or sun. It is these value chains that we seek to highlight in our climate benefit reporting.

Why does Holmen report climate benefit?

Reporting our climate benefit is a way to show how Holmen’s operations are playing their part in reducing carbon dioxide in the atmosphere and how we are helping our customers to reduce the climate footprint of their business.

At Holmen, we have been calculating and reporting climate benefit in our annual accounts since 2010. Up until now, our climate reporting has covered the increased uptake of carbon dioxide by the forests, the sequestration of carbon in wood products and the substitution effect that arises when wood products replace materials with a greater climate footprint such as steel and concrete. Last year, in 2020, we took the next step in reporting on the entire chain. 

Why are we changing the way we calculate Holmen’s climate benefit?

The Paris Agreement and the climate targets adopted by countries, such as the EU Green Deal (the EU taxonomy for sustainable activities, the EU Climate Strategy, the EU Forest Strategy, etc.) have increased interest in carbon reporting. At the same time, up until now Swedish forest companies have lacked, and have called for, one uniform method for calculating climate benefit.

The lack of established frameworks for calculating the substitution value – the part where forest management produces the greatest climate benefit – has led to this aspect easily being ignored in political contexts.   

From 2020 years reporting and onwards, we have modified the way we report climate benefit so that our reporting from now on incorporates uptake, emissions and substitution of fossil carbon dioxide throughout the entire value chain.

We have adapted the calculation to ensure that it largely matches the way that other industry actors have started to conduct their own reporting, i.e. in line with the methodology used by the UN’s climate panel, the IPCC, plus the substitution effect.

6.4 million tonnes of climate benefit

The forest delivers the most benefit when it is put to use. It is the heart of Holmen’s sustainable business. We are part of a value chain that creates climate benefit in several areas, amounting to almost 7 million tonnes of fossil carbon dioxide equivalents in 2021. And it is clear that our greatest climate benefit comes from forest products replacing fossil alternatives.

How we calculate our climate benefit

+1,8

CO2 uptake in the annual increase in the volume of standing timber in Holmen’s forests after harvest, plus CO2 stored in Holmen’s products.

+5,8

Substitution, where the renewable products and the renewable energy Holmen sells replace fossil alternatives.

-0,7

Holmen’s fossil emissions. Over 80% of these are generated from transport and procurement.

+ 1.8: Our products and the growth in our forests stored 1.8 million tonnes CO2e

Growing trees absorb carbon dioxide. Our active and sustainable forestry means the trees grow even more than they would otherwise have done. We harvest less than the forest growth, which means that the amount of wood in our forests is constantly increasing. In 2021 it was calculated that the increase in the volume of standing timber in Holmen’s forests alone absorbed and bound 1.3 million tonnes of carbon dioxide in trees and soil.

The raw material from the forest continues to bind carbon dioxide when we refine it, and in 2021 Holmen’s production of wood products led to half a milion more tonnes of carbon dioxide being stored in wooden buildings and other timber structures. Our paperboard and our paper also contributed towards increased storage of 72 thousand tonnes of carbon dioxide, albeit more in the short term.

Read more about how bioenergy is part of the forest's natural carbon dioxide cycle

The calculation in detail

+ 5.8: Our products substituted 4,1 million tonnes CO2e

Substitution arises when wood-based products replace fossil alternatives. In this way, Holmen’s products were thus expected to reduce the need for fossil materials and raw materials such that just over 4,1 million tonnes of carbon dioxide were able to stay in the ground in 2021.

It is through this substitution effect that we gain the maximum climate benefit from the forest. All forests benefit the climate, and by managing the forests sensibly and sustainably we can increase this climate benefit mainly by replacing fossil materials.

The calculation in detail

+ 5.8: Our energy replaced 1.6 million tonnes CO2e

Our production of renewable electricity from bioenerbi, hydro- and wind power replaced power from coal and gas equivalent to 1 million tonnes of greenhouse gas emissions.

On top of this, we have bioenergy production that comes from residual products from the forest. Selling this bioenergy sees us reducing our customers’ needs to purchase fossil energy equivalent to 0.6 million tonnes of fossil carbon dioxide emissions.

The calculation in detail

- 0.7: Holmen’s value chain emitted 0.7 million tonnes CO2e

Emissions from Holmen's industries are already within the Paris Agreement's limit values ​​for 2044, thanks to energy efficiency and investments in renewable energy. Since 2005, we have reduced the use of fossil fuels by 85%.

Today, more than 80% of our fossil emissions is genereated through transport and purchase, and therefore our new emission targets focus on reducing emissions there. Holmen's new targets have been approved by SBT, which confirms that Holmen is in line with the Paris Agreement.

0.7 million tonnes of fossil CO2 was emitted in our value chain in 2021. By using biofuel in the form of residual products, including from our harvest and from recycled wood, we have also emitted 1.4 million tonnes of biogenic carbon dioxide. These biogenic emissions are part of the natural carbon cycle between air and trees and are therefore not part of humanity's strengthening of the greenhouse effect.

Our climate targets

Climate benefit in several value chains

In addition to the uptake, storage and substitution that take place in Holmen’s main value chains, we are also a link in creating climate benefit in other value chains, partly through our external sales of roundwood. The raw material often comes from private forest owners and is then refined by our customers. This creates additional climate benefit through cooperation between several different actors.

No-one owns climate benefit

Holmen’s business helps to benefit our planet by reducing the amount of greenhouse gases in the atmosphere.

It is in our own interests to manage our forest sustainably while preserving robust ecosystems and as high growth as possible. This produces more renewable wood raw material while increasing the forest’ capacity to absorb carbon dioxide.

The greatest climate benefit is created, however, when our customers choose to replace fossil alternatives with renewables. This means that fossil raw materials such as oil, coal and gas can stay in the ground rather than being extracted. Therefore, Holmen has decided to invest even more in producing the products that contribute to the greatest climate benefit: wood products. The forest provides the greatest benefit when it is used and it is the power of customer choice that makes the difference.

Our progress areas for a sustainable future

Holmen is growing a sustainable future. We especially focus on the three areas where we have particular opportunities to make a positive impact, not only in the future but right now: we are part of a value chain where climate benefits are created in several stages, we make the greatest benefit for the climate together with our customers, and we grow best together.

Our progress areas