Sustainable fuel purchasing

The most significant environmental impacts of our supply chain are related mainly to fuels, particularly to coal and biomasses. We recognise that open-pit coal mining can be challenging in terms of environmental protection, and working conditions in underground mines can create occupational health and safety concerns. The acquisition of biomass involves environmental risks, such as illegal logging and loss of biodiversity, but there are also economical, social and reputational risks related to human rights, labour rights and land ownership.

Fuel purchases in 2015

In fuel purchasing, special attention is paid to the origin of the fuel and to responsible production. In 2015 we had 117 suppliers in our fuel supply chain, 8% of them operated in risk countries.
 

Origin of fuels used at Fortum in 2015 1)

 

Natural gas

The natural gas used in Russia, the Baltic countries and Finland originated from several suppliers in Russia. The natural gas used in Poland was purchased mainly from Poland.
 

Coal

The coal used in Finland originated from Russia. The coal used in Poland originated mainly from Poland. The power plants in Russia used coal originating from Russia and Kazakhstan.
 
In Finland, we have a legal obligation to have an amount of fuels in reserve equivalent to three months of average electricity production. There are no similar legal obligations in other countries, but we do maintain sufficient reserves for uninterrupted energy production in all countries where we operate.
 
Fortum is a member of the Bettercoal initiative, and uses the Bettercoal Code and tools in assessing the sustainability of the coal supply chain.  The 2015 Bettercoal audits are described in more detail in Sustainable supply chain.
 

Biomass

The biomass we used consisted of wood pellets, wood chips, industrial wood residues and agrobiomass that originated from Finland, the Baltic countries, Russia, Belarus and Poland. We are developing measures to verify the traceability and sustainability of biofuels. In 2016 we will strengthen and standardise the agreement requirements related to the origin of wood-based biofuel, and we aim to set a target for the use of wood-based biofuel from certified sources.
 
A verification system established for the bio-oil production at the bio-oil plant integrated with Fortum’s Joensuu power plant was approved at the end of 2014. The verification system is used to prove compliance with nationally legislated sustainability criteria for bio-oil. In 2015 the first Fortum Otso® verification certificates were given to domestic and foreign customers. The verification certificates enable customers to prove that the combusted Fortum Otso® is a carbon dioxide-free fuel.
 

Uranium

The fuel assemblies used at the Loviisa power plant are completely of Russian origin. The fuel supplier acquires the uranium used in the fuel assemblies from Russian mines in accordance with Fortum’s agreement. In 2015, the uranium originated from the Krasnokamensk, Khiagda and Dalur mines.
 
Both ARMZ Uranium Holding Co., a uranium producer, and TVEL, which is responsible for refining and manufacturing uranium, have environmental and occupational safety systems in place in all their plants. All three uranium mines have ISO 14001 environmental certification. The Khiagda mine has an OHSAS 18001 certified occupational health and safety management system, and certification is under way at the Dalur mine. The zirconium material manufacturing plant and the plant responsible for manufacturing uranium oxide pellets and fuel assemblies have ISO 14001 environmental management system certification and OHSAS 18001 occupational health and safety management system certifications.
 
We regularly assess the quality, environmental, and occupational health and safety management systems of our nuclear fuel suppliers and the manufacturing of nuclear fuel assemblies. As part of the collaboration between the different companies in the supply chain of uranium to be manufactured into fuel, Fortum’s representatives assessed the operations of the uranium mine co-owned by Fortum’s Russian uranium supplier in Kazakhstan in summer 2015. The mine’s sustainable operations represented best practices in the sector, and its quality, environmental, occupational health and occupational safety management systems and its energy efficiency management system were certified.
 

2/25/2016