Fortum is today one of Europe’s cleanest power generators. Almost 90% of the Group’s EBITDA (year 2022 excluding Russian operations) originates from the company’s Nordic 45 TWh outright power generation, which is based on CO2-free hydro and nuclear power. This business is complemented by onshore wind and solar, district heating and cooling operations, electricity retail and circular economy business.
Fortum’s new strategy is built on the expectation of increased demand growth in the Nordics in the mid- and long-term while at the same time it is addressing the current uncertainty in the operating environment impacted by geopolitical tensions, general weaker economic outlook with higher inflation and interest rates, tightening regulation and volatile commodity markets.
Fortum has a very competitive Nordic generation portfolio that delivers clean power generation at terawatt-hour-scale making Fortum the preferred partner for industrials. Fortum is one of only two players in the Nordics who can provide the competitive, reliable and clean energy at scale to enable the industrial decarbonisation of the Nordics. Therefore, the focus is on maintaining best-in-class operations and high availability of the Nordic fleet and securing and optimising the earnings at all times. Fortum will also work to find solutions for industrial customers to lower their carbon footprint. The aim is to develop and build new clean power in partnerships with strategic customers and actively develop a project pipeline to enable future growth. To navigate the uncertainty in the current operating environment, Fortum will continue to transform and develop and with this ensure value creation.
In order to preserve the regained solid financial position Fortum will be prudent in capital allocation and selective with growth projects prioritising profitability. This will be ensured by a clear financial framework and balance between CAPEX balance sheet strength and dividends to create value .
New more ambitious environmental targets
Fortum’s position as a leading Nordic clean energy company is now complemented by considerably enhanced environmental targets with the aim to be a leader in sustainability.
Fortum has brought forward its target to reach carbon neutrality (Scopes 1, 2, 3) by several years to 2030 and will exit all coal generation by the end of 2027. Fortum will also commit to set emission reduction targets based on the climate science (SBTi 1.5°C). This commitment assumes full exit from Russia. To measure the progress, mid-point targets have also been set for specific emissions at below 20 g CO2/kWh for total energy production and at below 10 g CO2/kWh for power generation by 2028. Fortum is already taking steps to reach the new environmental targets and examples of these include the Loviisa nuclear plant lifetime extension, increasing the use on hydro power and the ongoing decarbonisation projects in district heating.
Further, Fortum is now also committing to an ambitious biodiversity target to have no net loss of biodiversity (excluding any aquatic impacts) from existing and new operations (Scopes 1, 2) from 2030 onwards. In addition, the company will reduce its negative dynamic terrestrial impacts in upstream Scope 3 by 50% by 2030 (base-year 2021). Fortum will continue local initiatives, especially in hydropower production, and is committed to develop a science-based methodology to assess the company’s aquatic impacts during 2023.