Sustainability Topic: Climate

Toward a competitive low-carbon metal production

Boliden is working to reduce its climate impact and to constantly maintain and improve low-carbon metal production. There is a growing global demand for metals to meet societal challenges, including climate change. For example, the greater use of renewable energy and the electrification of society needed to combat climate change both require more metals, such as copper and zinc. Furthermore, several of Boliden’s metals were identified as being of special strategic interest for the development of the fossil free society.

Boliden is well positioned to help limit Europe’s heavy dependence on metal imports, and to enhance sustainability throughout the metal value chain. Naturally, our operations also face challenges. Mining and smelting activities can generate significant amounts of greenhouse gas emissions. However, as a sustainability leader in the metals and mining sector, Boliden clearly has a role to play in significantly reducing its climate impact – and in driving positive change throughout the industry.

Boliden has compiled a first version of a climate program that summarizes how we will manage climate risks.

The program includes disclosure sections on:

  • Governance – how climate-related risks and opportunities are governed.
  • Risk management – how climate-related risks are identified, assessed and managed.
  • Strategy – our status on the actual and potential impacts of climate-related risks and opportunities on the business, strategy and financial planning so far.
  • Metrics and targets – the metrics and targets used to assess and manage relevant climate-related risks and opportunities.
  • Performance – the current performance and progress made by Boliden toward its climate targets.

Boliden’s climate program for competitive low-carbon metal production applies to the entire Group. The Business Areas decide on what actions to take to support the program, and which units and projects to improve.

Governance

Proactive climate governance

The Boliden Environmental Board, which consists of the Boliden Group Management team, has the overall responsibility for the company’s climate program and long-term targets. The CEO reports on progress to the Boliden Board.

Group Management is supported by an Environmental council. The Environmental council has an expert group, the Boliden Climate Committee, which co-ordinates Boliden’s climate program. The committee consists of business area representatives and experts from the organization. The committee’s assignment is to follow up, suggest improvements and coordinate the climate work within Boliden. The committee reports quarterly to the Environmental Council. Each business area is responsible for implementing Boliden’s climate strategy and long-term targets.

Risk Management

Boliden’s business areas conduct climate-related risk and opportunities assessments, as part of its ISO 14001 certified environmental management for each of its sites. The Boliden Management team annually builds on these business area assessments to evaluate risks and opportunities, and present a risk and opportunity report to the Boliden Board each year.

An annual sustainability workshop is held, to identify the most important topics to address on a Group level. This workshop involves key people throughout the organization and provides an outside-in perspective by gathering input from important external stakeholders, such as investors and local communities. Climate change was identified as one of Boliden’s most important topics to deal with in the February 2019 workshop. This led to a Group-wide agreement, at the Group strategy meeting in March, on a 40% emissions reduction target by 2030.

Strategy

The decarbonization of Boliden’s business will help it to mitigate the risks associated with fossil fuel dependency, such as those related to rising fuel costs and more stringent future regulations. Decarbonization also presents opportunities and will enhance competitiveness and drive long-term profitability. 

 

Risks

The need for mines & the issue of carbon leakage

Boliden’s greatest risk is the perception in society that mines are not needed. Authorities make permits difficult to obtain, using increasingly stringent environmental criteria. Moving mining and metal production activities out of Europe may reduce Europe’s emissions, but may at the same time significantly increase global emissions. This is known as carbon leakage.

Balancing circular economy & climate obligations

Recovering valuable metals from societal waste can sometimes cause more carbon emissions than sourcing new metal ore. It is essential to find a balance between promoting circular resource use and climate emissions.

Regulation change risks

Changes to regulations and taxes, such as the EU Emission Trading Scheme (ETS), may result in cost increases that jeopardize Boliden’s competitiveness in the international market. Decarbonizing more quickly than competitors is Boliden’s strategy to mitigate the company’s exposure to such future risks. An efficient and reliable permitting process from the authorities is crucial to ensure that new, necessary and climate-smart investments are made possible.

Extreme weather-related risks

Global warming can increase the risk of more extreme weather events as the global climate continues to change. Changes in precipitation might lead to heavier snowfall or flooding that can affect open pit mining operations, or localized flooding and changes in groundwater levels could impact on Boliden’s operations. Higher temperatures and storms in the future might also have negative implications on Boliden’s operations. All business units shall include weather-related scenario analyses in their risk assessments.

Opportunities

Resilience - metals for a sustainable society

As a leading sustainability metals and mining company, Boliden is well positioned to supply the metals needed for a sustainable society. Copper and zinc, for example, are essential for society’s transition from fossil fuels to electrification by enabling solar panels, wind turbines and electric vehicles. Boliden’s proactive stance on climate-related issues can differentiate us from our competitors as there will be strong demand for low-carbon metals in a fossil-free society. Boliden is also a leader in recovering valuable metals from societal waste, such as e-scrap, lead car batteries and existing process waste.

Boliden is actively working to reduce the climate footprint of its own operations. This includes working toward the electrification of its mines and the development of low-carbon production processes for its smelters. These areas both require significant R&D innovation and investment, and working proactively with them is essential to enable the supply of low-carbon metals to the market. Establishing itself as a low-carbon metals producer is a major opportunity for Boliden to enhance its reputation and brand.

Potential for more sustainable metals to command a higher premium

Boliden has identified potential customers that will be interested in paying a premium for low-carbon metals. Boliden has opportunities to tap into this market – to enhance profitability while also contributing toward a more sustainable society.

Financial planning

Boliden has a strategic investment program, including investments to mitigate climate-related risks and capitalize on opportunities. The program involves evaluating different actions based on their long-term environmental impact, CO₂ emissions and financial cost.

Metrics and Targets

Boliden’s objective is to provide metals with a low carbon footprint, by decarbonizing its operations and supplying low-carbon metals. This will enable Boliden to contribute toward the EU aspirations to achieve net zero CO₂ emissions by 2050 and the Paris Agreement objective to limit the global temperature increase.

Boliden has a comprehensive system to collect and report climate-­related data. Key metrics are the aggregated scope 1 and 2 emissions per source and greenhouse gas emissions intensity.

305–1  Direct (Scope 1) GHG emissions

Boliden reports this indicator for the units over which it has ­operational control. The direct carbon dioxide emissions arise from GHG emissions from carbonaceous raw materials, from fuels in metal extraction processes and fuels for heating, and from the use of fuels for mining operations and road transportation within the company.

The direct emissions are calculated in accordance with the procedures laid down in the WBCSD1) GHG²) Protocol, together with additional guidelines from the EU and/or national ­authorities.

The CO₂ reporting within the framework of ETS is carried out in accordance with separately audited procedures in each country, and although we seek to report the same data, we cannot guarantee that the Group’s GRI disclosure will correlate exactly with the CO₂ data reported within ETS.

 

Carbon dioxide emissions (Scope 1 + Scope 2), 2019 per source

The total reported CO² emissions are 0.918 (0.971)
M metric tons for the year.

 

305–2  Indirect (Scope 2) GHG emissions

Boliden reports this indicator for the units over which it has operational control and includes only production-related indirect emissions. In 2015, Boliden began using location-based emission factors. This was an adaptation to the updated GHG Protocol Guidelines for Scope 2 reporting. The calculation is made by multi­plying the energy used with the production mix for the spec­ific region. The production mix should be as current as possible, and Boliden uses emission factors published by International ­Energy Agency. For the 2019 reporting, the following emission factors were applied: for the operations in Sweden 12.2 (10.8), Finland 116.6 (106.8), Norway 8.0 (9.0), and Ireland 413.4 (417.6) g/kWh.

 

CARBON DIOXIDE EMISSIONS (SCOPE 1 + SCOPE 2), 2019 PER SOURCE

Boliden Group

Carbon dioxide emissions,
Scope 1+2, metric tons

2017

2018

2019

       

Direct emissions, (305-1)

605,000

644,000

598,000

Indirect emissions, (305-2)

419,000

327,000

319,000

Total (305-1 + 305-2)

1,024,000

971,000

917,000

Mines

Carbon dioxide emissions,
Scope 1+2, metric tons

2017

2018

2019

       

Direct emissions, (305-1)

192,000

207,000

173,000

Indirect emissions, (305-2)

151,000

134,000

139,000

Total (305-1 + 305-2)

343,000

341,000

312,000

Smelters

Carbon dioxide emissions,
Scope 1+2, metric tons

2017

2018

2019

       

Direct emissions, (305-1)

413,000

436,000

425,000

Indirect emissions, (305-2)

268,000

194,000

179,000

Total (305-1 + 305-2)

681,000

630,000

605,000

 

Optimizing mine ventilation

Mine ventilation systems are typically inefficient, with fans in constant operation. Using Wi-Fi that had recently been installed as part of an automation program, Boliden’s Swedish mines installed systems to automatically control individual fans to optimally meet the need for ventilation based on the location of mine workers and vehicle operation. The systems reduced the energy consumption for ventilation by between 5 and 55% in different mines during the first year.

Following the success in its Swedish mines, Boliden plans to implement a ventilation optimization solution at its Tara mine in Ireland, which is estimated to save approximately 6,800 MWh of fossil-fuel intensive Irish electricity generation – and to reduce CO2 emissions by approximately 2,800 metric tons CO2.

 

305–4  GHG emission intensity

Boliden’s GHG intensity was 0.64 (0.64) t/t metal. The GHG intensity is reported as the product emission intensity (metric tons of direct [Scope 1] and indirect [Scope 2] emissions per unit of metal product).

 

GREENHOUSE GAS EMISSION INTENSITY

t CO2/t metal

Boliden group

Carbon dioxide emissions, Scope 1+2,
metric tons/production volume

2017

2018

2019

       

Direct intensity

0.41

0.43

0.42

Indirect indirect intensity

0.28

0.21

0.22

Total intensity

0.69

0.64

0.64

Mines

Carbon dioxide emissions, Scope 1+2,
metric tons/production volume

2017

2018

2019

       

Direct intensity

0.37

0.40

0.37

Indirect intensity

0.29

0.26

0.29

Total intensity

0.66

0.66

0.66

Smelters

Carbon dioxide emissions, Scope 1+2,
metric tons/production volume

2017

2018

2019

       

Direct intensity

0.43

0.45

0.46

Indirect intensity

0.28

0.20

0.20

Total intensity

0.71

0.65

0.66

 

Electrification of mining activities

The majority of mine emissions originate from the use of truck diesel. In recent years, Boliden has been involved in the development and testing of electric trolley trucks, and has itself actively developed overhead power line, pole and foundation solutions. Boliden has the policy of sharing all its knowledge and solutions with other mining companies, seeing that the more companies are involved in mine electrification, the more affordable solutions will become and the greater the overall societal benefit will be.

In 2019, the Boliden Board approved funding of 300 million SEK to build trolley power lines at its large open pit mines Aitik (Sweden) and Kevitsa (Finland). This is expected to lower the CO2-emissions with around 300,000 metric tons through­out the mines’ lifespan. Potential savings may be even greater if additional trolley investments are made in the future.

 

305–5  Reduction of GHG emissions

Boliden strives to deliver the excess heat from its processes for use in district heating, wherever possible. Boliden is also, actively initiating attempted reductions in fossil-fuel emission by means of fuel substitution tests, participation in demonstrations of electrified road transports, and improved heat recovery/exchange with the aim of phasing out the use of fossil fuels for heating purposes.

Recent initiatives have focused on reducing diesel use, which typically has a significant impact on reducing both financial costs and emissions. The majority of projects have involved the promotion of electrification, which helps to mitigate Boliden’s exposure to fluctuating oil prices but risks greater dependency on electricity prices and fees.

Heat recovery to reduce fossil fuel use

The mines have to preheat incoming ventilation air in winter when outdoor air temperatures are below zero degrees Celsius, which is typically done with propane gas heaters. Boliden’s Garpenberg and Kankberg mines are planning to install heat recovery units in 2021, which will use outgoing mine air to warm up incoming cold air. The projects will reduce the use of propane gas by between 80 and 90%, and realize annual savings of around 2,000 metric tons CO₂ at Garpenberg and approximately 1,000 metric tons CO₂ at Kankberg.

Underground mine electrification – a great opportunity

Underground mines are more difficult to electrify than open pit mines due to the need to combine trolley and battery solutions. However, the potential for electrification is huge since avoiding underground diesel use will not only reduce vehicle emissions, but will also significantly decrease the need to ventilate diesel fumes from mines. Boliden expects to trial its first trolley and battery hybrid solution in 2022, which will draw experience from the lessons and failures from previous projects by other mining companies. Potentially, profitability will also be boosted by higher diesel prices.

Boliden produces metals with relatively low CO₂ emissions compared to the average metal producer, and continuously strives to improve its processes. The Business Area Smelters invests in technology and solutions that further reduce the carbon footprint and optimize the profitability of its smelters.

Action Programs

Boliden aims to identify multiple pathways toward low carbon smelting and refining. Different technology options for decarbonization have been identified in close cooperation with production experts at the smelters´. Specific innovation support is managed in partnership with research institutes to support the scaling up of R&D to pilot and demonstration plants.

The Business Area Smelters R&D department has several ongoing projects to evaluate various innovative technologies that have the potential to decrease CO₂ emissions and reduce financial costs. Examples include:

  • Evaluation of hydrogen and bio-based alternatives as decarbonization options.
  • Switching to biofuel oil for process heating
  • Investigation of carbon capture and utilization or storage.
  • Project with Vattenfall to evaluate renewable energy ­technologies.

Overcoming major challenges

Major challenges include decarbonizing Boliden’s smelter processes by finding alternatives to the fossil fuel reducing agents currently used by smelters throughout the Smelter Business Area. To meet Boliden’s climate objectives, alternative low-carbon processes are required, which would require significant innovation and investment, as this report highlights, Boliden has both the R&D capacity to develop the innovative solutions required, and the willingness of the company’s management to invest in low-carbon solutions that make long-term financial sense.

This approach to difficult challenges ensures that Boliden is well-positioned to achieve its objective of becoming the preferred supplier of metals for a sustainable society – with all the business and societal benefits this entails.

 

Plastic recovery reduces emissions

Boliden’s Bergsöe lead smelter, which is one of the largest recyclers of used lead-acid car batteries in Europe, has been upgraded to recycle plastic battery casings – to reduce CO2 emissions and generate additional value from waste. The plant came into operation in September 2019 and reduces Bergsöe’s overall CO2 emissions by around 10,000 metric tons CO2, equivalent to over 20 % of its total emissions. The plastic separator may also position Bergsöe favorably against future legislative demands, as plastic separation may well become mandatory according to the Best Available Techniques (BAT) EU Emissions directive in the coming years.