Coal procurement at Fortum

The use of coal in energy production needs to be discontinued and we are working towards that. Fortum is the third largest producer of carbon dioxide-free electricity in Europe. In sites where we still use coal, we do so efficiently and responsibly.

Coal use is decreasing quickly

We have a big responsibility in the everyday functioning of society. The transition to a low-carbon society must be done in such a way that enough energy at an affordable price can be produced at any given moment. Coal accounts for about 13% of Fortum’s power generation, and it will decrease rapidly in the upcoming years. Coal use in Europe is gradually being phased out within the framework of national schedules.

Fortum’s power generation is mainly based on natural gas-fired generation, and carbon dioxide-free hydro and nuclear power. Fortum targets to rapidly reduce the share of coal in power generation. A minor share of Fortum’s power generation is currently based on solar and wind, but Fortum targets significant growth in the area over the next five years.

Uniper also operates a commodities trading business and has natural gas storages.

Examples of the coal phase-out

  • In Finland, Fortum is discontinuing the use of coal in Espoo-Kirkkonummi district heating area by 2025
  • In Inkoo, Finland, Fortum has dismantled the biggest coal-fired power plant in the Nordic countries
  • Fortum’s Russia division is announced to discontinue its use of coal by the end of 2022
  • In Germany, the coal-fired 345-MW Scholven C plant unit will cease power generation at the end of 2022, and the coal-fired 510-MW Staudinger 5 plant unit will be closed in 2023
  • In the United Kingdom, one of four 500-MW units of the coal-fired Ratcliffe power plant will be closed in 2022

Read more about Fortum's coal phase out

Responsible coal procurement


Fortum and Uniper require that suppliers commit to a responsible way of operating. We use the Bettercoal initiative’s Code and tools in assessing the responsibility of the coal supply chain. Bettercoal is an independent organisation with the goal of continuous improvement of the coal supply chain.

At year-end 2021, Fortum Group’s coal volume purchased via direct contract from Bettercoal suppliers was 67%.

More information on coal procurement and use

Fortum (excluding Uniper)

We purchase majority of coal directly from mining companies, so we know the origin of the coal. In 2020, we imported coal to Finland from Kuzbass, Russia. In Poland, we used mainly Polish coal. Russian power plants used coal from Kazakhstan and Russia.

Finland
In Finland, coal is used at the Suomenoja combined heat and power (CHP) plant and Meri-Pori power plant, and at Fortum’s co-owned Naantali CHP plant.

Fortum will discontinue the use of coal at the Suomenoja CHP plant in Espoo in 2025. Fortum and the City of Espoo have together committed to developing Espoo’s district heating to be carbon-neutral in the 2020s in the Espoo Clean Heat project.

Fortum’s Meri-Pori coal-fired power plant has been has been selected for 440 MW of production capacity for the national peak-load reserve capacity system, based on the competitive bidding organised by the Energy Authority. Fingrid will give the plant the possible start-up order in situations when there is a shortage of electricity or the threat of a power shortage is evident.  

Poland
In Poland, coal is used at the Czestochowa combined heat and power plant and the heat only boiler plants, as well as at the new Zabrze combined heat and power plant and the heat only boiler plants. The Czestochowa plant also uses biofuels, and the new Zabrze plant uses refuse-derived fuel (RDF) and coal.

Russia
The majority of our energy production in Russia is based on natural gas, and the development focus is on boosting energy efficiency. The new plant units in Russia use CCGT (Combined  Cycle Gas Turbine) technology, which  represents the best available technology in natural gas combustion. 

Coal suppliers
Fortum’s most significant coal suppliers in 2021 were SUEK, Maikuben-Komir, AB Energo, Polska Grupa Górnicza, and Węglokoks Kraj. Fortum is working towards diversification of our coal procurement sources to our power plants to improve the security of supply.

Reducing environmental impacts
We take the environmental impacts of coal seriously. In addition to carbon emissions, the use of fuels also produces, e.g., sulphur dioxide, nitrogen oxide and particle emissions that impair air quality, and cause acidification of soil and water systems. Flue-gas emissions can be reduced effectively with various technology solutions and flue-gas cleaning technologies. All our power plants operate in compliance with environmental permit conditions.

Read more in Fortum’s Sustainability Report

Uniper

Uniper is independently responsible for its coal procurement. Information about Uniper’s coal procurement and use is available in Uniper's 2020 Sustainability Report. 

Bettercoal

Bettercoal’s requirements are based on the Bettercoal Code, which covers good governance, human rights, social responsibility, and environmental issues, among other things. Bettercoal’s assessment programme includes the coal supplier’s Letter of Commitment, self assessment, and an independent assessment of mining operations.

Based on the assessment, a Continuous Improvement Plan (CIP) is made for suppliers; the realisation of the plan is monitored by Bettercoal regularly. A new assessment is done every five years. Additionally, the realisation of the improvement plan is monitored by country-specific working groups.

Bettercoal has Russia and Colombia working groups, and Fortum participates in both of them. Uniper chairs the Colombia working group. The working groups’ reports are published on the Bettercoal website. Important focus areas in the development work for Russia include, e.g., environmental impacts, securing biodiversity, occupational health and safety, and engaging with local communities. The particular focus in Colombia is on strengthening the trust between the various stakeholders in coal-mining regions to support the peace process of the civil war that ended in the early 2000s, and to support the diversification of local livelihoods in a situation where the demand for coal is decreasing. The agenda of the working group also includes issues related to access to clean water for local communities.

If a coal supplier committed to Bettercoal violates its commitments and fails to implement corrective measures within a reasonable time, Bettercoal can initiate measures to disassociate the supplier. In such case, the supplier forfeits its Bettercoal supplier status.

Bettercoal member companies, like Fortum and Uniper, are required to annually report on the use of coal and on how the Bettercoal supplier assessment process has been integrated in their coal procurements. Every member company must also annually define commitments to advance the Bettercoal principles and processes.

Read more about Bettercoal