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Sustainable transport
From forest to fuel tank with Pyrocell
Climate-smart raw material Sustainable transport
Setra is sitting on one of the solutions for increasing domestic production of renewable biofuel. In partnership with fuel company Preem, a joint production facility is currently being built to produce bio-oil at the sawmill in Kastet outside Gävle.
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THE JOINTLY-OWNED company Pyrocell will produce bio-oil from sawdust. Setra is responsible for the raw material, sawdust, and Preem for refineries and filling stations.
“For several years, we’ve been looking at how we can improve profitability and secure revenue for our bioproducts and develop our sawdust business. A lot of pieces fell into place when we found a partner in Preem,” explains Pontus Friberg, SVP Enterprise Risk Management at Setra and Chairman of the Board of Pyrocell.
Used where it does the most benefit Today sawdust has various uses, including district heating. But it produces the greatest benefit as a raw material for biofuel, a product that is in short supply in Sweden. Today, 85% of renewable fuels are imported or based on imported raw materials. At the same time, use of renewable fuels needs to more than double if we are to attain our target of a 70% reduction in carbon emissions in the transport sector by 2030. “Sawdust has long been seen as a waste product. Now we have assessed where we think it can produce the greatest climate benefit, and the answer is by reducing carbon emissions in the transport sector. The investment in Pyrocell is sustainable from a commercial and environmental perspective,” says Pontus Friberg.
The project has been awarded SEK 117 million in investment grants from the government’s Klimatklivet initiative, which supports local and regional measures to reduce climate gas emissions. This support shows that the project is considered to have potentially wide-ranging benefits for the climate.
Direct impact on the roads Pyrolysis oil can replace fossil oil and be used in heating boilers in the energy sector and in industry more widely, or, as in Pyrocell’s case, to produce biofuel. Once Preem has refined the bio-oil, it will replace part of the fossil raw material in ordinary petrol and diesel. It will have a direct impact on emissions on the roads and make a real contribution to the transition to a fossil-free transport sector. Other advantages of domestic biofuel production are that it will be easier to control the environmental impact of production and ensure that acceptable working conditions are provided.
“Pyrocell’s plant at Kastet will be the first production facility for pyrolysis oil in Europe, and possibly the world, linked to a refinery. What is unique about the project is that we are linking up the whole value chain from forest to fuel tank,” says Pontus Friberg. Pyrocell will also produce steam that goes back to the sawmill, where it will be used in the drying process. The factory, which will be completed in 2021, will produce about 25,000 tonnes of pyrolysis oil per year. This is equivalent to the annual fuel consumption of up to 17,000 cars.
“Exactly how big the overall climate impact will be is hard to say, but we have estimated that we could attain a reduction in carbon dioxide compared with fossil fuel of 80 to 90%,” says Pontus Friberg.
At the moment, many actors are looking to make their products greener. Demand is outstripping supply and Pontus Friberg is not opposed to the idea of more production plants adjoining Setra’s sawmills. “The investment in bio-oil makes us an attractive business partner and employer, and results that demonstrate Grönsamhet will increase the value of our brand.
Pyrolysis Pyrolysis is a process in which a substance is rapidly heated to a high temperature without adding oxygen so that the solid material is vaporised and can be condensed into a liquid. Through pyrolysis, branches, roots, tops and sawdust can be turned into oil, which can then be refined into renewable petrol and diesel. Pyrolysis oil is a dark brown liquid with a strong, slightly smoky odour and a low pH value. According to the CLP Regulation, which contains rules on the classification, labelling and packaging of chemical products, the oil is not classified as flammable or hazardous to the environment. Read more at pyrocell.se
Pontus Friberg, SVP Enterprise Risk Management at Setra and Chairman of the Board of Pyrocell.
The new company PyroCell sees Setra and Preem joining forces to create a commercially viable value chain from forest to fuel. The pyrolysis oil will be used as a renewable raw material in the production of biofuel at Preem’s refinery in Lysekil.
What potential does Preem see in pyrolysis oil as a fuel? Ever since Preem started producing renewable fuel, we’ve recognised the particularly high potential of waste products from the forest. The partnership with Setra is a milestone and an important part of Preem’s investment in renewables. Together we can create completely new value chains that will help to eventually phase out fossil transport fuel.
What are the challenges? Sweden has unique opportunities to be the best in the world at renewable fuel, but progress is rather slow. The new rules clearly require a reduction in the carbon content of fuel, which is a good sign. However, domestic production of renewable fuels is lagging behind. Unfortunately, the reason for this is legislation that currently favours the import of cheaper renewable fuels offering less climate benefit.
Does forest-based fuel offer more advantages? The environmental and climaterelated benefits of renewable fuel are naturally the most important ones for us. But we also see other positive effects, not least in the labour market, where our investments are creating new, green jobs in small towns and rural areas. Using our domestic raw materials also reduces dependence on imports of both fossil raw materials and renewables.
Sustainable transport
Setra’s operations depend on transport, in and outside Sweden. Transport accounts for the majority of Setra’s greenhouse gas emissions and we are therefore taking a broad approach to make it as sustainable and efficient as possible.
Our opportunities and challenges
Efficient logistics are an important part of our business. We transport large volumes, often over long distances. Our timber raw material is transported to our facilities and finished products need to be transported to our customers. Our own operations are located in rural areas of Sweden and about 65% of sales are exported to Europe, North Africa, the Middle East and Asia. Overall, transport accounts for about 10–15% of Setra’s costs and almost 85% of our total carbon emissions (read more in the climate report on page 30).
In a broader perspective, our wood products benefit the climate even when transported to the other side of the globe, because they capture so much more carbon dioxide per cubic metre than the emissions caused by their production and transport. Nevertheless, it is still important to do what we can to minimise emissions.
How we work
Good cooperation, dialogue and follow-up We choose our partners with care and only use reliable shipping lines and shipping agents that uphold high quality and comply with legislation and rules. Overall, our operations provide employment for between 300 and 400 people in the transport sector.
For domestic road transport, we have a long-term agreement with a main supplier, Unite, which gives us a greater opportunity to attain optimised, smart, transport chains. The same vehicle can transport timber from a sawmill to a processing unit, pick up finished products and deliver them on to customers nearby. Unite has well-developed environmental credentials with clear goals to increase the proportion of load capacity used, increase the proportion of renewable fuel and quality assure transport from a safety perspective.
Method of transport by volume sold
47% ROAD TRANSPORT
53% SHIPPING
Setra’s code of conduct for suppliers applies to all new agreements we enter into. Work is also in progress to get our existing suppliers to sign up. The code sets out fundamental sustainability requirements that address areas such as employees’ terms and conditions and the environmental work of suppliers. We also follow up on the systematic sustainability work of our partners by requesting and evaluating responses to a survey from Q3, an organisation that works for sustainable road transport. In addition, we conduct follow-up by obtaining emissions reports as a basis for our climate calculations. We carry out regular feedback meetings with our suppliers where sustainability is a fixed point on the agenda.
Smart logistics – no unnecessary transport Together with our partners, we strive to attain as optimum transport flows as possible. This involves developing flexible and effective transport chains where as much of the load capacity is used as possible and the distance that the vehicle drives without a load is minimised.
Adapting sales volumes to the capacity of the vehicle and installing scales at our units to weigh each load are two examples of measures that are improving load capacity.
Working with Triona and the digital platform C-load enables us to hire the supplier that is the best match in terms of geography and volume for each shipment. Transport needs and available transport capacity are automatically coordinated such that freight carriers can more easily take loads that fit their flow, reducing the proportion of driving with spare or empty capacity and improving transport efficiency.
Investment in rail Today about 10% of our sawn wood products and 4% of timber transport does part of the journey by rail. We see great potential in increasing the proportion of rail transport. More timber transport by rail produces a major climate benefit – not
Governance
Our starting point is that the transport we use must be efficient, safe, climate and eco-friendly and comply with health and safety requirements and good working conditions for transport company employees. Our requirements are based on the Swedish Forest Industries Federation’s sustainability criteria for road transport and criteria from Q3, an association for sustainable road transport.
merely for our own flows but also for timber transporters and surrounding society. In 2019 Setra’s Board of Directors and management decided to invest in connecting more units by rail. Existing rail connections at Kastet, Skinnskatteberg and Hasselfors will be linked to the unit in Heby. The decision was based on financial and environmental benefits. One important reason is to be able to move timber long distances cost-effectively when storms or insect attacks hit. In the long term, we also see excellent opportunities to use railways to transport bioproducts, pulpwood and finished products longer distances.
Overall, we estimate that our investment in rail in Heby has the potential to cut emissions in the region of 2,500–3,000 tonnes of carbon dioxide per year thanks to the volumes that can be switched from road to rail.
One important step on the way is the co-financing agreement to expand railway lines that we have signed with the Swedish Transport Administration and Region Uppsala. The co-financing is based on the Swedish Transport Administration wanting access to more reloading and service locations and Region Uppsala looking to move traffic from road to rail for environmental reasons.
The investment will result in industrial track to the plants, improved terminal solutions and electrical safety solutions. Heby is the site of the most extensive measures where changes may be needed to the municipality’s detailed development plan. The project is in progress but has been delayed by the planning process and we estimate that it will be able to be completed by 2024 at the latest. The measures in Hasselfors and Skinnskatteberg are planned to begin in 2020–2021.
10% of sawn wood products in 2019 were transported by rail part of the way.
Developing renewable fuel As a processor of forest raw material, Setra has a unique opportunity to make a contribution towards more renewable fuel and reduced climate impact from road traffic.
The jointly-owned company Pyrocell sees Setra joining forces with Preem to produce bio-oil from sawdust. Read more about Pyrocell on page 34.
Industry partnerships To further contribute towards a more sustainable transport sector looking ahead, we are actively involved in forums and dialogues in the sector. During the year we launched a new collaboration with other transport-heavy companies via the Mid Sweden Chamber of Commerce. The Swedish Forest Industries Federation, of which Setra is a member, is lobbying for longer and heavier vehicles to be permitted on Sweden’s roads, a move that would cut traffic and emissions.
Electrification of heavy goods traffic, more intermodal transport (combination of road and sea) plus emissions issues associated with shipping are other areas in which we are working with the sector to make a difference.
