Fortum and coal

Fortum’s power generation is mainly based on natural gas-fired generation, and carbon dioxide-free hydro and nuclear power. Fortum targets to reduce the share of coal use in power generation rapidly. Fortum is the third largest producer of carbon dioxide-free electricity in Europe.

Zabrze

The use of coal in energy production needs to be discontinued and we are working towards that. In sites where we still use coal, we do so efficiently and responsibly.

Fortum uses hard coal and lignite in Russia, Poland, and Finland. In 2021, coal accounts for about 13% of our combined 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.

Further information about fuel use by country is available on Sustainability 2021 Report.

Fortum’s coal use in 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 coal use in 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.

Fortum’s coal use in Russia

The majority of our energy production in Russia is based on natural gas, and the development focus is on boosting energy efficiency. In 2021, Fortum sold its coal-fired Argayash CHP plant. Following the decision to transition from coal to gas at the Chelyabinsk CHP-2 plant, the transaction will allow the Russia division to discontinue its use of coal by the end of 2022. On 12 May 2022, Fortum announced that we are preparing a controlled exit from the Russian market, with potential divestments of its Russian operations as the preferred path.

We will gradually phase out coal in Europe

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

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.

Respon­sible fuel procurement

Fortum requires 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 (including Uniper) coal volume purchased via direct contract from Bettercoal suppliers was 67%.

Coal suppliers

Fortum’s most significant coal suppliers in 2021 were SUEK, Maikuben-Komir, AB Energo, Polska Grupa Górnicza, and Węglokoks Kraj. Following Russia’s attack and the war in Ukraine, Fortum ceased coal purchases from Russia and looked for alternative sources.

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. The working groups’ reports are published on the Bettercoal website. Bettercoal suspended the engagement with Russian coal suppliers and the Russia working group due to the Russian attack and war in Ukraine. 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 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.