Environment and climate

The world is facing considerable climate change challenges. Scientists have proved that the rise in global temperatures must stay below 1.5 °C to protect life on Earth. Exceeding this limit is likely to have lasting consequences for nature and humans. To keep the temperature rise below 1.5 °C, the world needs to halve global carbon emissions by 2030 and reach net-zero emissions by 2050. This is explained in the IPCC Special Report on the impacts of global warming of 1.5 °C.

Sustainable energy is our key focus area. It is at the heart of Verdo and therefore a natural part of our activities. We create solutions which focus on energy efficiency and lower supply prices, CO 2 and NO X reductions as well as clean and plentiful water.

In 2015, we adopted the UN’s 17 Sustainable Development Goals towards 2030. They define a new and improved framework for how companies can contribute to solving major global climate change challenges. Verdo acknowledges that we are part of the problem, but we are also part of the solution. This is reflected in our commitment to the UN’s 17 Sustainable Development Goals.

Verdo directly or indirectly addresses all the 17 Sustainable Development Goals. However, we have unique expertise to provide solutions to some of them. In 2019, goal no. 6 ‘Clean water and sanitation’, goal no. 7 ‘Affordable and clean energy’ and goal no. 13 ‘Climate action’ were implemented in our strategy. In 2020, we expect to implement more goals.

Policy

Goal no. 7 ‘Affordable and clean energy’

Goal no. 7 is about ensuring access to safe, clean and affordably priced energy. Our approach is to increase the use of certified biomass in the form of wood chips and keep coal consumption to an absolute minimum. This helps to reduce our CO 2 and NO X emissions year after year.

Every year, we replace an increasing number of street lights with LED technology to reduce energy consumption and thereby CO 2 emissions caused by lighting. In addition, we are committed to developing intelligent infrastructure that further promotes the green transformation. It not only makes the infrastructure more energy-efficient, but also uses data and communication via street lighting and intelligent traffic management to optimise traffic flow and reduce congestion and thereby urban CO 2 emissions.

Goal no. 13 ‘Climate action’

Goal no. 13 focuses on urgent action to combat climate change by reducing the impact of greenhouse gases, among other things. That is why Verdo has long been committed to utilising surplus heat from industry. In Randers, we work with the Bilka supermarket, the crematorium and the regional hospital to offtake their waste heat from production instead of just releasing it into the atmosphere. Therefore, we welcome the 2018 energy agreement on improving the utilisation of surplus heat from businesses for the benefit of citizens and the environment. Improving the utilisation of surplus heat reduces heating costs for consumers and fuel consumption in heat production. In 2019, Verdo’s initiatives in this area corresponded to the annual heat consumption of about 40 households. In 2020, we will explore further opportunities for utilising surplus heat in Randers and Herning.

Given the increasing wood consumption –both in the energy sector and in construction – the need for sustainable forestry is increasing. This creates a natural focus on certification and documentation. International certification schemes play an important role in this respect. The certifications reflect a joint commitment to responsible forestry. Verdo is therefore entering into partnerships with our suppliers and industry organisations to push the market and the forestry industry in a more responsible and sustainable direction.

We require that all sourcing of wood-based biomass is certified by reputable and independent organisations. This helps us to maintain forest ecosystems, ensure responsible and lawful work processes and provide financial incentives for countries with major forestry operations to adopt sustainable production methods.

We maintain FSC® CoC and SBP CoC certification to ensure that our fuels are sustainably sourced. In 2019, we were also NEPCon Generic CoC certified and became one of the first major biomass suppliers in Denmark to be awarded PEFC™ traceability certification.

The forest area and the products it supplies are certified by one of the world’s leading forestry certification systems. PEFC™-certified forests protect biodiversity, climate, safety at work and local communities. The felled wood can be traced all the way from the forest to the sawmill and on to the shop or combustion plant. Certifications ensure sustainable and responsible sourcing, and that the biomass is produced under safe financial, social and environmental conditions.

We have also helped to draft the energy companies’ Industry Agreement for Sustainable Biomass. It stipulates that 90% of all fuel in the industry must be

Importance of certifications for Verdo

FSC® (Forest Stewardship Council®) certified and sourced from sustainable resources by 2019. Verdo sees sustainable biomass as a green path to a fossil-free future. Biomass reduces CO 2 emissions by more than 90% compared to coal. Coal therefore emits more CO 2 than wood, and while plants’ absorption of CO 2 takes place over decades, the process takes millions of years for coal.

Trees can play an important role in solving the planet’s climate change challenges. Trees have an excellent natural ability to absorb CO 2 from the atmosphere. For example, a large beech tree with a diameter of 50 cm and a height of 26 meters can absorb an amount of carbon equivalent to 4.30 tonnes of CO 2 in its lifetime. Photosynthesis is the forests’ natural contribution to the fight against climate change. We are already planting trees and protecting woodlands, but in 2020 we expect to increase our efforts in this area.

Goal no. 6 ‘Clean water and sanitation’

In Denmark, we all have access to clean drinking water – a resource most people take for granted. However, as is the case in the rest of the world, our drinking water is under threat. Verdo is therefore continuously stepping up activities aimed at protecting our groundwater and guaranteeing clean drinking water for consumers in the local community. In 2019, one of such activities was the protection of forests and the creation of non-toxic environments in local communities. In addition, we joined partnerships to develop new water filtration and purification methods. In 2019, we entered into a partnership with the waterworks Hjørring Vand and TREFOR Vand and the Danish Technological Institute on maximum pesticide removal through natural, microbiological manipulation of the existing sand filter at Danish waterworks.

SBP (Sustainable Biomass Programme)

Certification of forest area and forest products Social and environmental responsibility.

• Documentation for lawfulness and compliance with EU Timber Regulation (EUTR). Ensures sourcing of sustainable wood-based biomass and adherence to industry agreement.

Certification of producer and products. Ensures that biomass is produced and transported responsibly. Ensures detailed documentation and CO 2 accounts.

• Ensures sourcing of sustainable wood-based biomass and adherence to industry agreement.

PEFC (Programme for the Endorsement of Forest Certification)

Certification of forest area and forest products

• Builds on social and environmental responsibility. Ensures access to wider market of certified products. Recognises existing national certification systems.

• Ensures sourcing of sustainable wood-based biomass and adherence to industry agreement.

NEPCon (Generic Chain of Custody certification)

Certification of traceability documentation system where our FSC, PEFC or SBP procedures are not relevant.

We use it to document traceability when sourcing biomass from Danish forests – biomass that meets the requirements for alternative documentation for adherence to industry agreement.

Efforts and results

In 2019, we measured the highest-ever efficiency at the CHP plant Randers Kraftvarmeværk thanks to our skilled employees. This resulted in reduced fuel consumption and CO 2 emissions. The efficiency improvements were achieved through considerable operational and optimisation efforts.

In 2019, our consumption of biomass at Randers Kraftvarmeværk totalled 206,587 tonnes, while coal accounted for only 399 tonnes or 0.19% of our total fuel consumption. Overall, we reduced our CO 2 emissions by 10% from 3,314 tonnes in 2018 to 2,994 tonnes in 2019. Our success in reducing CO 2 emissions in 2019 is mainly due to improved production planning and operational reliability.

In 2019, we saw a minimal increase in coal consumption compared to last year. We only use coal as backup fuel if problems arise. While the conveyor belt for biomass underwent major repair work, we had to use coal to keep the heating on in our heating customers’ living rooms.

Verdo is committed to reducing NO X emissions, for example by carefully analysing and optimising the composition of the biomass we use. In 2019, we successfully reduced NO X emissions by 57,446 kg by reducing fuel consumption and the amount of nitrogen in biomass. That is a reduction of nearly 23% from 2018 to 2019. At the same time, we reduced CO 2 emissions by 10% or 320 tonnes. This corresponds to the annual CO 2 emissions of 19 Danes. According to figures from Concito, each Dane emits an average of 17 tonnes

Energy production in Verdo

of CO 2 to the atmosphere per year. This is based on figures from the Global Resource Footprint of Nations report, which is based on consumption in each country surveyed. If Denmark is to meet its target of becoming climate-neutral by 2050, each person must reduce its emissions to less than 2 tonnes per year.

LED optimisation

In 2019, we energy-optimised and replaced 14,000 street lights with LED technology, reducing annual energy consumption by 3,332 MWh in the municipalities concerned. The lower energy consumption of LED lighting also resulted in significant CO 2 reductions of about 666 tonnes. This equates to the annual CO 2 emissions of 40 Danes. We have used LED lighting at our head office since 2018, saving 43,853 kWh and just over 20 tonnes of CO 2 every year. This is a natural extension of our goal that all the electricity used at Verdo must be 100% green. At the end of 2019, we achieved this goal, which is inspired by UN goal no. 7 ‘Affordable and clean energy’.

Green electricity

Verdo takes the green transformation seriously. Not only in our Group, but also in relation to the electricity products we offer our customers. Therefore, our focus for 2020 is to reach the highest category within green electricity to make it easier for our customers to choose 100% green electricity.

We love trees

Trees are nature’s CO 2 vacuum cleaner. According to figures from the Danish Nature Agency, one hectare of healthy forest absorbs and binds between 8 and 13 tonnes of CO 2 per year, depending on the species of wood. This almost corresponds to the annual CO 2 emissions of the average Dane.

In 2019, we contributed 1,250 trees to the nationwide tree planting project ‘Danmark planter træer’. The trees are now waiting to be planted outside Randers. Since 2019, we have partnered with the Growing Trees Network Foundation to plant new trees. The partnership continues in 2020.

Forest acquisitions and planting

Afforestation and forest acquisition are part of our strategy and support for UN goal no. 6 ‘Clean water and sanitation, goal no. 13 ‘Climate action’ and goal no. 15 ‘Life on land’. In addition to clean drinking water and CO 2 storage, more forest provides habitats for plants and animals as well as new recreational areas. In 2019, we acquired the Randers Sønderskov forest to protect the source area in the forest and the supply of clean drinking water to our customers. The source area in Randers Sønderskov is located in an urban area close to a gravel pit. The source area is therefore at risk of contamination if the forest is not protected. In 2020, we will expand the forest and plant 2,000 new trees.

Verdo extracts 1,000,000 m 3 of water annually from the source area around Oust Mølle Folkeskov forest in Randers. This makes it imperative to protect the groundwater in the area. Therefore, we have planted 24,000 trees in Oust Mølle Folkeskov since 2016, which helps to store CO 2 and protect the drinking water supply near the large groundwater reservoir. The forest helps to protect the clean drinking water against contamination, while creating a recreational area for the city’s citizens.

Action against pesticides

In Denmark, we use around 20 tonnes of pesticides in our gardens every year. One drop of pesticide in the groundwater is enough to make 10 million litres of water undrinkable. Tests of 250 water bores across the country have shown excessive levels of pesticides in the groundwater. As part of our efforts to ensure clean drinking water, we have banned the use of pesticides at all our sites since 2017. These sites cover 430,000 m 2 , which corresponds to an area the size of 65 football pitches. We support the ‘Giftfri Have’ anti-pesticide project launched by the Danish Society for Nature Conservation and the Danish Society of Practical Ecology. In 2019, the Municipality of Randers followed suit, and we hope that more local players will support the project in 2020.

In 2019, we once again celebrated the UN’s International Water Day in cooperation with the organisations Vandmiljø Randers and Randers Naturcenter, among others. 500 young school children participated in the star race and learned more about water. Our aim is to share our knowledge of water and to support and strengthen the participation of local communities in improving water and sanitation management.

Energy savings

‘Energiselskabernes energispareindsats’ obliges us to find and realise a number of annual energy savings, which must be reported to the Danish Energy Agency. In 2019, Verdo’s overall savings target was 41,830 MWh. We have achieved savings of 33,502 MWh. In so doing, we have reached 80% of our overall energy savings target. Verdo Go Green A/S realises the majority of its energy saving projects in production companies. In 2019, the project portfolio was characterised by few but large projects. Due to the extraordinarily wet autumn of 2019, some of these projects had yet to be completed by the end of 2019. We expect to make good on the lack of energy-saving projects in 2020.

Conclusion

Based on our environmental and climate-related efforts in 2019 within CO 2 reduction, the sourcing of fuels, the protection of our source area and green district heating as well as fair supply prices, results were satisfactory, and we complied with our policy. In 2020, we will step up our efforts in relation to the UN’s Sustainable Development Goals. To this end, we have entered into a partnership on the goals with the Municipality of Randers. The aim is to make the UN’s Sustainable Development Goals relevant for everybody and increase awareness among citizens and businesses of how we all can contribute to achieving the goals.