Climate report

Our goal is for Setra’s business to be climate neutral by 2030. The goal applies along the entire value chain, with the exception of foreign distribution.

Our opportunities and challenges

Wood binds carbon and our products are climate positive. The climate benefits of using wood as a construction material far outweigh the emissions from production and transport of the products. For Setra’s wood products, the net effect lies between around 600 and 800 kg captured carbon per cubic metre of wood, depending on the transport distances involved.

To make the business climate neutral, we also need to work on our own negative carbon footprint, with the main challenge in this area coming down to our dependence on energy for production and transport.

Governance The annual climate report shows where the emissions are occurring in our operations and the size of these emissions, seen in relation to the whole lifecycle. The climate report help us to prioritise where we need to put interventions in place and follow up their effects.

How we work

Monitoring emissions with climate report For several years now, Setra has produced an annual climate report for the business. The climate report shows emissions from a lifecycle perspective, from planting spruce or pine seedlings to delivering sawn and processed wood products and bioproducts to customers.

Setra’s emissions of greenhouse gases from its own heating boilers, machinery and vehicles (Scope 1) account for a small proportion, around 5%, of the total emissions. Indirect emissions from purchased energy (Scope 2) account for less than 1% of emissions.

This is because Setra has bought in ecolabelled electricity since 2018. The vast majority of the emissions thus fall within Scope 3, with transport accounting for the most (read more about our transport on page 36).

Climate calculations in line with the GHG Protocol Setra’s climate calculations are conducted in line with the Greenhouse Gas (GHG) Protocol, an international calculation standard. The standard divides the emissions into three categories, or scopes, as follows: • Scope 1: Direct emissions from the business (fuel combustion at own plants and company vehicles) • Scope 2: Indirect emissions from purchased energy (electricity, district heating, district cooling) • Scope 3: Indirect emissions from other parts of the value chain, such as purchased transport, travel and the carbon footprint of the raw materials.

Emission categories

SCOPE 3

SCOPE 2

SCOPE 1

Climate neutral The term climate neutral means that the total climate impact of a certain operation or a product is net zero. First and foremost, the emissions that the operation causes must be reduced to the minimum possible. The business is able to offset the remaining emissions so that the net total is zero.

Carbon emissions Emissions from Setra’s operations (tonnes).

2019* 2018 2017 2016

Scope 1 9,236 8,979 8,119 9,880

Scope 2 226 231 37,657 43,032

Scope 3, including transport 183,831 191,089 194,945 151,855

Scope 3, excluding transport (21,977) (23,282) (20,858) (24,076)

Total: 193,293 200,299 240,721 204,767

Scope 1 Scope 2

Scope 3

Direct emissions from our own operations. Indirect emissions from purchased energy. When Setra buys in electricity, district heating and district cooling, the emissions do not occur inside the gates but where the energy is produced. Indirect emissions from purchased transport, hired machinery and the climate impact of purchased products, for example.

*Including emissions from divested and sold units and new investments. The complete climate report for 2019 is available at setragroup.com

The forest industry’s roadmap for fossil free competitiveness Setra is part of the Swedish forest sector’s roadmap for fossil free competitiveness. The plan focuses on three areas in which the forest sector can contribute to Sweden’s work on climate change: • Substitution – replacing fossil products or products whose production creates major fossil emissions with bio-based products. • Carbon capture – binding carbon in the forest and in bio-based products. • Reducing energy use – cutting climate emissions from the industry’s own use of fossil energy.

Wood from a climate perspective

Emissions and respective carbon sequestration in kg CO 2 /m 3 sawn timber for different destinations. Emissions are calculated based on a lifecycle perspective from planting to transport of finished goods to the customer.

25 36 60 69 231

Sweden UK Germany Japan

2,7 2,9

2,5 2 ■ Excluding outbound deliveries ■ Including transport to an average customer in a typical destination

■ Amount of carbon bound in wood recalculated as CO 2

-800

Calculations show that wood binds the equivalent of 800 kg of carbon dioxide per cubic metre of sawn timber. At the same time, the carbon emissions from a lifecycle perspective from planting to delivery to an average customer in Sweden are 36 kg. Using wood for construction and housing produces a carbon sequestration effect of 764 kg carbon per cubic metre of sawn timber.

Plan for climate-neutral Setra Our goal is to make Setra carbon neutral by 2030. In 2019, we clarified how we are going to get there. As part of the operational planning, all the units and parts of the business have identified activities that will be collated in a Roadmap for climate-neutral Setra. In order to clearly set out each production unit’s impacts and contribution to the collective roadmap, we will also be drawing up a climate report for each unit.

Concrete measures for the climate As well as being the only renewable construction material, wood also stores carbon dioxide for the whole of its lifecycle. Our most important contribution to work on climate change is therefore to promote greater use of wood as a construction material.

We are working on various fronts to increase our own and our customers’ knowledge of how wood and bio-based raw materials benefit the climate. • We are providing our customers with product information, quality-assured climate data and environmental product declarations (EPD). • We are participating in studies and analyses to expand knowledge and reporting concerning the climate benefits of wooden buildings. This includes supporting Linnaeus University’s research project to increase the competitiveness of cross-laminated timber as a construction material. • We are taking part in and investing in innovation and the development of new products and applications for forest raw material and bioproducts. A prime example of this is our investment in biofuel. Read more on page 34.

To become carbon neutral, we also need to minimise and, in the long term, entirely eradicate our own negative carbon footprint. We have succeeded in halving greenhouse gas emissions per cubic metre of sawn timber from around 48 kg, excluding transport (base year 2011), to around 25 kg. The single most effective measure has been the purchase of renewable electricity. Other measures have included increasing the proportion of biodiesel in our machines, making the drying process more efficient and investing in energyefficient equipment. High accessibility, and thus high production, is essential to attaining the target.

In 2019, work included energy surveys at our facilities in Heby, Hasselfors and Skinnskatteberg.

Vital activities in the plan looking ahead include: • Working to improve accessibility and production. • Ongoing energy efficiency improvements through more specific surveys of potential savings. • Expanded dialogue and specified requirements for freight carriers on optimising space utilisation and route planning. • Enable rail transport for timber as well as finished products.

1.3 million tonnes CO 2 The volume of wood products Setra sold in 2019 (1.666 million cubic metres) has thus captured in the region of 1.3 million tonnes of carbon dioxide. That equates to the greenhouse gas emissions of around 150,000 people in Sweden. 33

Greenhouse gases

Greenhouse gas emissions per activity, 2019

2.8% ENERGY 3.2% MACHINES 0.2% BUSINESS TRAVEL 10.4% TIMBER TRANSPORT 0.2% EMPLOYEE COMMUTING 9.8% RAW MATERIALS AND MATERIALS 73.4% OUTBOUND DELIVERIES

Emissions per product type

Average emissions in kg CO 2 per m 3 manufactured

SAWN WOOD PRODUCTS

GLULAM

CROSS-LAMINATED TIMBER

25

44

47*