CO2 roadmap

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Annika Ramsköld

The climate emergency

The climate emergency is one of the greatest challenges of our time. The increasing frequency of extreme weather events and their significant impact on people, the environment, and economies underline the urgency and the need to act.

In order to prevent the worst impacts, we need to stay within the Paris Agreement’s 1.5°C global warming limit. The latest climate science shows that we are dangerously close to breaching multiple tipping points, beyond which a cascade of interacting are predicted to occur, but there is still a window of opportunity.

Deep cuts in global greenhouse gas (GHG) emissions are needed, in order to nearly halve them before 2030 and to achieve net-zero before 2050*. Such a scale of reduction can only be achieved if the world takes collective action now. To reach net-zero, all sectors of society need to do their part – governments, industries, companies and individuals.
* The IPCC sixth assessment report

Phasing out use of fossil fuels and increasing access to fossil free energy will be critical. Greater rollout of fossil free electrification across areas such as transport, heating, buildings and industrial processes is key – and at the same time provides opportunities for sustainable economic growth whilst minimising harm to the planet and its inhabitants.

"As an energy company we have the expertise, the opportunity and the responsibility to do that and take the lead in the energy transition." – Anna Borg, CEO Vattenfall

Vattenfall’s commitment to play our full part

By committing to reach net-zero by 2040, Vattenfall have committed to play our part. We have committed to reduce our own GHG emissions and to simultaneously help other societal sectors to move towards fossil freedom too.

Our climate commitment encompasses not only Vattenfall’s own heat and power production, but also all of our upstream and downstream emissions, for example those in supply chains linked to new fossil-free power production, and the emissions which arise from supplying natural gas to private and business customers. Our climate commitment and associated targets therefore cover the entire value chain, and all ‘Scopes’ therein: 1, 2 and 3.

Scopes are used to group organisations’ greenhouse gas emissions, based on the activities to which the emissions relate. Emissions may, for example, occur as a result of an organisation’s direct or indirect activities.
Read more about Scopes and the GHG Protocol

For Vattenfall, the different Scopes can be summarised as:

  • Scope 1: Direct emissions from assets Vattenfall owns or operates such as power plants and vehicles.
  • Scope 2: Indirect emissions from purchased energy that Vattenfall uses in own operations.
  • Scope 3: Indirect emissions, for example emissions produced by customers using Vattenfall's products (e.g. fossil gas) or emissions from Vattenfall's supply chains.

In order to reach our 2040 net-zero commitment, Vattenfall must tackle emissions which arise across all three Scopes. We therefore have specific climate targets which tackle each of these scopes.

More information and a breakdown of Vattenfall’s specific climate targets are provided below.

Visual 2A – SBTi UK.svg Source: Greenhouse Gas Protocol

Science Based Targets logotype

Guided by climate science

The targets on Vattenfall’s road to net-zero are guided by climate science. The overarching net-zero target, and the targets within this which sufficiently cover each of the Scopes in order to ensure Vattenfall reaches net-zero, have been approved by the Science Based Targets initiative (SBTi).

An independent global body which has been established by organisations including the Carbon Disclosure Project (CDP), the United Nations Global Compact, and the World Wide Fund for Nature (WWF), the SBTi uses climate science to determine how much emissions need to be reduced by, and at what speed, in order to keep global temperatures below the thresholds at which tipping point may be breached.

Approval of Vattenfall’s climate targets by the SBTi means that Vattenfall’s commitments are fully aligned with the Paris Agreement’s 1.5°C limit. Vattenfall’s commitment to being net-zero by 2040 – and therefore our commitment to being 1.5°C-aligned - is currently the most ambitious designation available through the SBTi process. We are one of the first European energy companies to have our net-zero targets certified by the SBTi.

"SBTi provides a crucial standard for reporting on net-zero, ensuring transparency and accountability in our efforts. By adhering to SBTi guidelines, we can confidently communicate our progress towards net-zero emissions, offering stakeholders a clear and reliable framework to assess our performance. We also encourage those we work with across the value chain and in the wider sector to join us in making a real contribution to climate action." – Annika Ramsköld, Head of Sustainability, Vattenfall

Vattenfall’s road to net-zero

Vattenfall’s climate targets

To achieve our net-zero commitment, Vattenfall must fulfil the SBTi 1.5°C requirements for significant GHG emissions reductions of a minimum 90% across our full value chain. Any outstanding emissions which persist beyond this must then be neutralised. By following this two-step approach, Vattenfall’s 2040 net contribution to the global CO2e budget will be zero.

To achieve the above, we have set near-term (2030) and long-term (2040) targets across the different scopes, 1, 2 and 3, all against a 2017 baseline. These targets have been informed by the SBTi’s guidance on the two-step reduction-neutralisation approach:

Graph showing reduction of CO2 emissions

First step:

  • Reduce Scope 1 + 2 CO2e intensity to 9g/kWh. This equates to an over 90% reduction
  • Reduce absolute Scope 3 emissions by 90% or more.

Second step:

  • Neutralise any remaining emissions with carbon removals.

The specific targets which Vattenfall has set based on this two-step approach are all set against a 2017 baseline. As of May 2024, Vattenfall has divested the Berlin heat business from our portfolio. We are now in the process of re-baselining our emissions to reflect this divestment. The process of re-baselining will have implications on our emissions trajectory and our path to achieving our net-zero target in 2040.

As a result, Vattenfall’s near- and long-term climate targets which have previously been approved by the SBTi will also have to be revisited to ensure that they accurately reflect our up-to-date business situation. Whilst the process of re-baselining and gaining SBTi approval of our new climate targets remains underway, Vattenfall’s pre-existing SBTi-approved targets remain applicable. For the time being, therefore, our climate targets are as follows:

Vattenfall's targets on the road to net-zero

By 2030

  • Vattenfall commit to reduce our Scope 1, 2 and 3 (sold electricity) GHG emissions intensity by >77%. By setting a separate target covering emissions from all sold electricity, we will measure our progress in decarbonising the electricity we sell to our customers.
  • Vattenfall commit to reduce our absolute Scope 3 (downstream: use of sold products) GHG emissions by >54%. By setting a separate target covering emissions from use of sold products, we will measure our progress in decarbonising the services which we provide to our private and business customers. The bulk of these emissions are currently attributable to use of natural gas for heating.

By 2040

  • Vattenfall commit to reduce our Scope 1, 2 and 3 (sold electricity) GHG emissions intensity by >93%
  • Vattenfall commit to reduce our absolute Scope 3 (downstream: use of sold products, and all of our remaining Scope 3: both upstream and downstream) emissions by >90%. By setting a target to encompass remaining Scope 3 emissions which are additional to those covered by sold electricity and use of sold products, we will measure our progress in decarbonising the remainder of our value chain, including emissions attributable to fuel sourcing; production of the goods and services which Vattenfall uses; and emissions linked to transport and business travel.

Together, the above targets equate to an absolute reduction of >90% across all Scopes by 2040.

Our approach to achieving our targets

The majority of Vattenfall’s Scope 1 and 2 emissions are attributable to the use of fossil fuels in district heating. Achieving net-zero for Scope 1 and 2 will require a twin-track approach: rapidly phasing out use of fossil fuels to generate electricity and heat whilst simultaneously increasing use of fossil-free sources for generating electricity and heat.

Vattenfall has agreed upon a transition plan which will support phase-out of fossil fuels in favour of a variety of future-oriented solutions, as laid out below.

Reliance on fossil gas will be reduced to a minimum by:

  • Expanding use of a variety of low CO2e emitting technologies such as geo- and aqua-thermal heat sources, power-to-heat solutions and seasonal storage options
  • Expanding Vattenfall’s partnerships which will allow integration of a higher share of third party excess heat infeed (TPI)
  • Retrofitting any remaining required gas assets to be powered by fossil-free hydrogen or biogas.

Electricity production from wind and solar will continue to grow strongly. Hydropower and nuclear will also continue to enable the electrification of society with fossil-free power.

Pumped hydro, batteries, and other solutions will continue to be developed to increase storage capacity of fossil-free energy and to increase flexibility of the energy system.

Through tackling our Scope 1 and 2 emissions and reducing the natural gas which Vattenfall sells to our customers, a significant proportion of Vattenfall’s Scope 3 emissions – those attributable to sold products will also be addressed.

Remaining Scope 3 emissions will include those attributable to Vattenfall’s supply chain, business travel, and waste generated by our operations and transportation. These areas are also being tackled in order for Vattenfall to deliver on our net-zero 2040 commitment.

Scope 3 emissions are widely regarded as being the most challenging to tackle as many categories are not directly associated with the company. However, by setting Scope 3 targets, Vattenfall’s climate actions can have a much wider impact and will unlock new innovations and collaborations in the full value chain.

A key step will be to transition customers away from natural gas to alternative ways of heating their homes and businesses and to power industrial processes (this is covered by Scope 3.11 which relates to use of the natural gas sold). The approach will focus on three key solutions:

  • Increasing the availability and choice of heat pumps to help replace traditional gas boilers.
  • Use of biogas, which is produced from biomass or organic waste, such as plant material and agricultural waste, will also have an important role to play. As well as expanding sales to customers, Vattenfall will look at contributing to ensure sufficient biogas capacity is available across the markets.
  • Expansion of heat networks, which will enable more homes and businesses to access low carbon heat. 

In addition, our work with consumers to help them benefit from energy efficiency measures will cut emissions by reducing consumption of both gas and electricity.

Vattenfall's business and private customers in Sweden have long benefitted from 100% fossil-free electricity, and they were joined by consumers in the Netherlands in 2022. In Finland, all private and small business customers have been using fossil-free electricity since 2021. In Germany, the aim is for all customers to be supplied with fossil-free electricity by 2030, and for businesses in the Netherlands by 2035 at the latest. This will reduce emissions from sold electricity (under Scope 3.3D).

Influence across the value chain

"Through measures such as integrating sustainability requirements in large tenders, we can use our buying power to accelerate progress towards fossil-free value chains." – Annika Ramsköld, Head of Sustainability, Vattenfall

To make progress on targets on reduction of Scope 3 emissions, which include supply chain emissions, we are using a number of complementary strategies.  These include actively engaging with suppliers and incorporating sustainability requirements into tenders. 

We are also playing an active role in a number of global initiatives aimed at driving meaningful reductions in emissions across key sectors.

For example, Vattenfall is a founding member of the First Movers Coalition – launched at COP26 in Glasgow – which committed to setting a number of requirements for suppliers that will significantly reduce the carbon footprint across key materials and services.

We have committed to:

  • Requiring our suppliers to use “breakthrough steel” which will enable the company to have at least 10% of the steel volumes procured annually by 2030 being breakthrough steel, e.g., Hybrit fossil free steel.
  • Requiring our trucking service providers to meet the requirements of at least 30% of their heavy-duty and 100% of their medium-duty truck purchases being zero-emission trucks by 2030.
  • Requiring airlines and air transport providers to replace at least 5% of conventional jet fuel demand with SAF (Sustainable Airline Fuels), and/or use zero-carbon emitting propulsion technologies by 2030.

As part of the SteelZero initiative, we are further minimising the carbon footprint of wind turbines and has committed to an interim target of using 50% low emission steel by 2030, on a journey to sourcing 100% net-zero steel by 2040.

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