**5.2. A regional level**

300 Energy Efficiency – The Innovative Ways for Smart Energy, the Future Towards Modern Utilities

Energy consumed in production

Plant no. 1 2,500 510 3% Machinery and equipment Plant no. 2 10,000 2,250 65% Other non-metallic mineral

Plant no. 3 20,000 4,300 73% x Food products and beverages Plant no. 4 20,000 5,100 70% x Other non-metallic mineral

Plant no. 5 25,000 5,200 40% Rubber and plastic products Plant no. 6 500,000 150,000 over 95% x Chemicals and chemical

Plant no. 1

**Table 3.** Key figures of six industrial plants in the Pirkanmaa Region, Finland (Aro, 2009).

**Figure 2.** Sankey diagrams for plants 1 and 6. Origin of CO2 emissions, t CO2(Aro,2009).

Plant no. 6

Own energy production

Sector

product

product

products

CO2 emissions [t CO2 / a]

Energy

consumption [MWh / a]

## *5.2.1. Finland and Pirkanmaa region*

Finland's population is rather small, only 5.3 million. With an area of 340 000 sq km, Finland is the 6th largest country in Europe. Finnish industry is versatile. We have light industry like the telecommunication industry, but we also have very heavy industry like the pulp and paper and steel industry. Most of the heavy industries belong to the EU Emission Trade System (EU ETS), while the light industries mainly do not.

In Finland, we have two schemes that promote the rational use of energy that are partly funded by the government: energy audits and energy investments regimes to improve energy efficiency and to increase the production of renewable energy. Furthermore, we have a voluntary agreement to improve energy efficiency. All these activities are applicable also for industry.

Finland consists of 15 provinces. Finnish regional energy policies have primarily focused on the promotion of biofuels. There have, however, been practically no regional activities for industry, especially as regards energy efficiency. In the past, the efforts to improve energy efficiency were mainly motivated by corporate economy and to some extent by the nation's fuel reserve supply stock. Today, because of climate change, the government of Finland is more interested in what is happening in industry. Improving energy efficiency means tackling climate change.

In a sparsely populated country with a lot of energy intensive industry such as Finland, it is a challenge to formulate a regional energy policy with a focus on industry. If we want to

tackle climate change in the long run – as many estimate the GHG emissions must be cut by some 60% – the policy must be very comprehensive and well-organised, and one must keep one's finger on the pulse of what is going on in the industry.

Tools for Categorizing Industrial Energy Use and GHG Emissions 303

Motor vehicles, trailers and semitrailers 1 %

Liquefied petroleum gas 2 % Light fuel oil 2 % Recovered fuels 1 % Others \* 1 %

Milled peat 3 %

Tot. 1,500,000 t CO2

Radio, television and communication equipment 1 %

Basic metals 1 %

Others \* 1 %

Non-metallic mineral products 2 %

Textiles and textile products 1 %

Fabricated metal products 2 %

Machinery and equipment 3 %

> Publishing, printing, reproduction of recorded media 1 %

the biggest CO2 emitting sector is the manufacturing of pulp, paper, and paper products. Labour intensive sectors, such as the manufacturing of machinery and equipment and the manufacturing of fabricated metal products are the sources with the least emissions. The use

14 %

Chemicals, chemical products and man-made fibres

**Figure 3.** CO2 emissions distribution by industrial sector in the Pirkanmaa region (Aro, 2009).

Rubber and plastic products 7 %


Electricity 39 %

**Others \***: 20 %

**Figure 4.** CO2 emissions distribution by source originating from the industrial energy use in the

The emission sources for different branches of industry were visualised both for the Pirkanmaa region and for the whole country. Such pie charts are vital for understanding the

Aquired heat/steam used in industrial processes 26 %

10 %

Pirkanmaa region (Aro, 2009).


Others \*: - Plastic waste - Coke


Natural gas 16 %

of electricity is the biggest source of CO2 emissions.

Pulp, paper and paper products 52 %

Food products and beverages 4 %

Wood and wood products 4 %



> Heavy fuel oil, sulphur content < 1 % 6 %

District heat 5 %



What does the regional level give in fight against climate change? The aim is to build foundations for starting a regional carbon dioxide reduction programme and to discuss what opportunities the provincial aspect offers to the reduction of the industrial CO2 emissions related to energy use. The approach is limited to D-sectors of the industrial statistics: the manufacturing industry. The fishing, farming, forestry, mining, construction industries, and the electricity, gas, and water supply industries are excluded from the study. Fuels used by industrial vehicles are also left out. The Pirkanmaa region, some 150 kilometres to the north from Helsinki, served as a target province. The centre of the region is the city of Tampere. The area of The Pirkanmaa region is some 4% and the population some 9% of the whole country. The work partly serves as one of the contributors to the establishment of the Pirkanmaa region energy programme.

Carbon dioxide emissions arising from the use of energy are divided in emissions originating from the combustion of fossil fuels and in emissions from the production of heat and electricity acquired by industry. Acquired heat and electricity are the sources of indirect emissions allocated to the industries. The classification of industrial statistics made by Statistics Finland was used in the calculations. The goal was to look at the energy related carbon dioxide emissions generated by different industrial sectors in the Pirkanmaa region. The emissions are also compared between the Pirkanmaa region and the whole country. Of all the greenhouse gases, the energy related emissions have the biggest impact and they represent 80% of Finland's greenhouse gas emissions (Finland's FNC, 2006).

#### *5.2.2. CO2 emissions by industry and source*

Carbon dioxide emissions from the use of energy were calculated from the industrial statistics (Statistics Finland, 2006) and they were complemented with data from other public sources. When estimating the emissions of industrial sectors, both the use of fossil fuels and emissions related to the acquired heat and electricity used by the companies were taken into account. Following these principles, carbon dioxide emissions related to the energy use of industry in the Pirkanmaa region were estimated at 1.5 million tons in 2004. This is about 2% of Finland's total greenhouse gas emissions. In Finland as a whole, the energy related CO2 emissions of industry are some 35% of the total GHG emissions.

Acquired electricity and heat and natural gas were identified as the main sources of CO2 emissions. In total, some 70% of the emissions are indirect, i.e., originating from acquired electricity and heat (for example district heat). In Finland, the average CO2 value for acquired electricity is 200 CO2 g /kWh and for acquired district heat 220 CO2 g /kWh (Motiva Oy, 2008).

The distribution of carbon dioxide emissions in both the Pirkanmaa region and the whole country was calculated on the basis of industrial statistics from 2004. The distributions between industrial sectors and emission sources are visualised in figures 3 and 4. Clearly, the biggest CO2 emitting sector is the manufacturing of pulp, paper, and paper products. Labour intensive sectors, such as the manufacturing of machinery and equipment and the manufacturing of fabricated metal products are the sources with the least emissions. The use of electricity is the biggest source of CO2 emissions.

302 Energy Efficiency – The Innovative Ways for Smart Energy, the Future Towards Modern Utilities

one's finger on the pulse of what is going on in the industry.

establishment of the Pirkanmaa region energy programme.

*5.2.2. CO2 emissions by industry and source* 

tackle climate change in the long run – as many estimate the GHG emissions must be cut by some 60% – the policy must be very comprehensive and well-organised, and one must keep

What does the regional level give in fight against climate change? The aim is to build foundations for starting a regional carbon dioxide reduction programme and to discuss what opportunities the provincial aspect offers to the reduction of the industrial CO2 emissions related to energy use. The approach is limited to D-sectors of the industrial statistics: the manufacturing industry. The fishing, farming, forestry, mining, construction industries, and the electricity, gas, and water supply industries are excluded from the study. Fuels used by industrial vehicles are also left out. The Pirkanmaa region, some 150 kilometres to the north from Helsinki, served as a target province. The centre of the region is the city of Tampere. The area of The Pirkanmaa region is some 4% and the population some 9% of the whole country. The work partly serves as one of the contributors to the

Carbon dioxide emissions arising from the use of energy are divided in emissions originating from the combustion of fossil fuels and in emissions from the production of heat and electricity acquired by industry. Acquired heat and electricity are the sources of indirect emissions allocated to the industries. The classification of industrial statistics made by Statistics Finland was used in the calculations. The goal was to look at the energy related carbon dioxide emissions generated by different industrial sectors in the Pirkanmaa region. The emissions are also compared between the Pirkanmaa region and the whole country. Of all the greenhouse gases, the energy related emissions have the biggest impact and they

Carbon dioxide emissions from the use of energy were calculated from the industrial statistics (Statistics Finland, 2006) and they were complemented with data from other public sources. When estimating the emissions of industrial sectors, both the use of fossil fuels and emissions related to the acquired heat and electricity used by the companies were taken into account. Following these principles, carbon dioxide emissions related to the energy use of industry in the Pirkanmaa region were estimated at 1.5 million tons in 2004. This is about 2% of Finland's total greenhouse gas emissions. In Finland as a whole, the energy related

Acquired electricity and heat and natural gas were identified as the main sources of CO2 emissions. In total, some 70% of the emissions are indirect, i.e., originating from acquired electricity and heat (for example district heat). In Finland, the average CO2 value for acquired electricity is 200 CO2 g /kWh and for acquired district heat 220 CO2 g /kWh (Motiva Oy, 2008).

The distribution of carbon dioxide emissions in both the Pirkanmaa region and the whole country was calculated on the basis of industrial statistics from 2004. The distributions between industrial sectors and emission sources are visualised in figures 3 and 4. Clearly,

represent 80% of Finland's greenhouse gas emissions (Finland's FNC, 2006).

CO2 emissions of industry are some 35% of the total GHG emissions.

**Figure 3.** CO2 emissions distribution by industrial sector in the Pirkanmaa region (Aro, 2009).

**Figure 4.** CO2 emissions distribution by source originating from the industrial energy use in the Pirkanmaa region (Aro, 2009).

The emission sources for different branches of industry were visualised both for the Pirkanmaa region and for the whole country. Such pie charts are vital for understanding the

differences between the regions and the whole country. Figure 5 is an example of the pie chart for the food products and beverage industry.

Tools for Categorizing Industrial Energy Use and GHG Emissions 305

**Pirkanmaa region** 

**kWh/€** 

*5.2.3. Parameters as a tool in energy efficiency and GHG control policies* 

target-oriented approach, for example:




**Industry Whole Finland**

the whole of Finland (Aro, 2009).

Food products and beverage 2 2 Textiles and textile products 2 1 Wood and wood products 6 7 Pulp, paper and paper products 29 8 Chemical and chemical products 6 15 Rubber and plastic products 1 1 Non-metallic mineral products 5 1 Production of basic metals 16 2 Fabricated metal products 1 1 Machinery and equipment 1 0.4 Average 9 3.5


Some key parameters were calculated and studied for the industrial sectors as a tool for the

The key parameters were also found suitable for comparing other characteristics of sectors and companies in relation to their CO2 emissions. These comparisons showed, for example, that the Pirkanmaa region is more industrialised than provinces on average but industry in the Pirkanmaa region is less energy intensive than Finnish industry on average: the added value of the industry of the Pirkanmaa region is 12% of the whole country whereas its population is 9%. As regards the industry energy intensity, in the Pirkanmaa region the energy intensity is lower than in the whole country, see table 3. Table 3 also indicates that Finnish industry is in general very energy intensive because the average number is 9 kWh/€, when one definition of an energy intensive industry is 6 kWh/€ or higher (Blok, 2007).

**kWh/€** 

**Table 4.** Energy consumption of the main industries per value added in the Pirkanmaa region and in

The structure of the industry has an influence on how much CO2 emissions are "needed" to create a certain amount of employment opportunities or added value. For example, the

**Figure 5.** CO2 emissions sources for food products and beverage industry in the Pirkanmaa region and in the whole country (Aro, 2009).

### *5.2.3. Parameters as a tool in energy efficiency and GHG control policies*

Some key parameters were calculated and studied for the industrial sectors as a tool for the target-oriented approach, for example:


304 Energy Efficiency – The Innovative Ways for Smart Energy, the Future Towards Modern Utilities

7.8 %

Electricity

Finland: Biofuels 0.06 % of energy consumption

LPG (Liquefied petroleum gas) 1.3 %

chart for the food products and beverage industry.

Pirkanmaa: Aquired process heat

District heating 21.7 %

Aquired process heat 29.1 %

> District heat 11.5 %

differences between the regions and the whole country. Figure 5 is an example of the pie

LPG (Liquefied petroleum gas) 4.2 %

> Light fuel oil 12.6 %

34.0 % CO2 emissions: 59,100 t CO2

Light fuel oil 6.5 %

Natural gas 19.8 %

> Natural gas 6.1 %

Heavy fuel oil, sulphur content < 1 % 12.9 %

> Milled peat 4.4 %

CO2 emissions: 1,107,600 t CO2 Biofuels 1.0 % of energy consumption

**Figure 5.** CO2 emissions sources for food products and beverage industry in the Pirkanmaa region and

Electricity 28.2 %

in the whole country (Aro, 2009).

Recycled and waste oils

Heavy fuel oil, sulphur content >= 1 %

**Others (2.3 %)**:

Coke Sod peat


The key parameters were also found suitable for comparing other characteristics of sectors and companies in relation to their CO2 emissions. These comparisons showed, for example, that the Pirkanmaa region is more industrialised than provinces on average but industry in the Pirkanmaa region is less energy intensive than Finnish industry on average: the added value of the industry of the Pirkanmaa region is 12% of the whole country whereas its population is 9%. As regards the industry energy intensity, in the Pirkanmaa region the energy intensity is lower than in the whole country, see table 3. Table 3 also indicates that Finnish industry is in general very energy intensive because the average number is 9 kWh/€, when one definition of an energy intensive industry is 6 kWh/€ or higher (Blok, 2007).


**Table 4.** Energy consumption of the main industries per value added in the Pirkanmaa region and in the whole of Finland (Aro, 2009).

The structure of the industry has an influence on how much CO2 emissions are "needed" to create a certain amount of employment opportunities or added value. For example, the manufacturing of machinery and equipment produces up to 20 times more jobs and wealth than the manufacturing of pulp, paper, and paper products with the same amount of CO2 emissions, see figure 6. Deducing from this, the structure of industry should be steered towards sectors such as machinery and equipment. In this way, industry could reduce a remarkable portion of the current emissions with the present number of jobs and amount of welfare. In fact, industrialized countries have already taken this route. For example, parts of the steel industry, which produces significant amounts of CO2 emissions, have been shut down or moved abroad. There has been a lot of debate about this intended or unintended carbon leak since the start of the EU ETS. In any case, global warming is indeed a global problem. Moving emitting sources from one place to another is the wrong way of dealing with global warming in both Finnish regional politics as well as in global politics. The Pirkanmaa region looks greener than the other provinces of Finland on average but it will not manage without the products of the less green Finland or the less green world.

Tools for Categorizing Industrial Energy Use and GHG Emissions 307

0 50 100 150 200 250

Labour force / CO2 [amount/1000 tCO2]

the share of district heating may represent 30% of the total energy consumption among "building energy users" but on average in the energy intensive industries only a few percent. Due to Finland's long tradition of CHP, the opportunities for using this technology for the production of district heating are today limited, but there is still unused potential for

**Figure 7.** Number of jobs in relation to CO2 emissions in the Pirkanmaa region and in the whole

In the article (Aro, 2009), the opportunities for the Pirkanmaa region to achieve a 20% reduction are estimated. In the region about 70% of industry's energy related CO2 emissions are indirect. This means that these emissions come with acquired electricity and heat. Companies have only limited possibilities to influence the specific emissions of indirect emission sources. In practice, the best way to reduce indirect emissions is to improve energy efficiency. Biofuels are rarely used. Only the manufacturing of pulp, paper, and paper products and the manufacturing of wood and wood products use a significant amount of

Pirkanmaa Finland

With the existing level of production in the Pirkanmaa region, a 20% cut in CO2 emissions

Heavy fuel oils are a source of some 100 000 tonnes of CO2 emissions annually, which can be

means some 300 000 tonnes annually. How can we get rid of these tonnes?

reduced at least by half by increasing biofuel-based energy production.

country (Aro, 2009).

*5.2.4. Drafting a scenario for Pirkamaa region* 

Machinery and equipment Fabricated metal products

Non-metallic mineral products Food products and beverages Rubber and plastic products Wood and products of wood

Pulp, paper and paper products Chimals and chemical products

Textiles

Basic metals

biofuels compared with their total energy use.

small scale CHP in enterprises that need heat in their production.

**Figure 6.** Value added per total energy consumption and the share of district heating from total energy consumption in the main industries of the Pirkanmaa region (Aro, 2009).

District heating produced in CHP plants is commonly known as an efficient way to generate power. In the Pirkanmaa region, district heating is common in industries that fall into the building energy users category, see figure 6. In these industries, no heat is needed in the process and, therefore, they do not necessarily need their own heat production. On average, the share of district heating may represent 30% of the total energy consumption among "building energy users" but on average in the energy intensive industries only a few percent. Due to Finland's long tradition of CHP, the opportunities for using this technology for the production of district heating are today limited, but there is still unused potential for small scale CHP in enterprises that need heat in their production.

**Figure 7.** Number of jobs in relation to CO2 emissions in the Pirkanmaa region and in the whole country (Aro, 2009).

#### *5.2.4. Drafting a scenario for Pirkamaa region*

306 Energy Efficiency – The Innovative Ways for Smart Energy, the Future Towards Modern Utilities

manufacturing of machinery and equipment produces up to 20 times more jobs and wealth than the manufacturing of pulp, paper, and paper products with the same amount of CO2 emissions, see figure 6. Deducing from this, the structure of industry should be steered towards sectors such as machinery and equipment. In this way, industry could reduce a remarkable portion of the current emissions with the present number of jobs and amount of welfare. In fact, industrialized countries have already taken this route. For example, parts of the steel industry, which produces significant amounts of CO2 emissions, have been shut down or moved abroad. There has been a lot of debate about this intended or unintended carbon leak since the start of the EU ETS. In any case, global warming is indeed a global problem. Moving emitting sources from one place to another is the wrong way of dealing with global warming in both Finnish regional politics as well as in global politics. The Pirkanmaa region looks greener than the other provinces of Finland on average but it will

not manage without the products of the less green Finland or the less green world.

29 Machinery and equipment

15 Food products and beverages

**Figure 6.** Value added per total energy consumption and the share of district heating from total energy

28 Fabricated metal products

27 Basic metals

0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % **District heating MWh / Total energy usage MWh [%]**

District heating produced in CHP plants is commonly known as an efficient way to generate power. In the Pirkanmaa region, district heating is common in industries that fall into the building energy users category, see figure 6. In these industries, no heat is needed in the process and, therefore, they do not necessarily need their own heat production. On average,

consumption in the main industries of the Pirkanmaa region (Aro, 2009).

20 Wood and wood products

26 Non-metallic mineral products 25 Rubber and plastic products

24 Chemicals and chemical products 21 Pulp, paper and paper products

17 Textiles

0

500

1000

1500

**Value Added [€] / Total energy usage [MWh]**

2000

2500

3000

In the article (Aro, 2009), the opportunities for the Pirkanmaa region to achieve a 20% reduction are estimated. In the region about 70% of industry's energy related CO2 emissions are indirect. This means that these emissions come with acquired electricity and heat. Companies have only limited possibilities to influence the specific emissions of indirect emission sources. In practice, the best way to reduce indirect emissions is to improve energy efficiency. Biofuels are rarely used. Only the manufacturing of pulp, paper, and paper products and the manufacturing of wood and wood products use a significant amount of biofuels compared with their total energy use.

With the existing level of production in the Pirkanmaa region, a 20% cut in CO2 emissions means some 300 000 tonnes annually. How can we get rid of these tonnes?

Heavy fuel oils are a source of some 100 000 tonnes of CO2 emissions annually, which can be reduced at least by half by increasing biofuel-based energy production.

During the project, a case study of six companies was carried out. This study and other experiences show that there are energy saving opportunities – with a payback period of less than 5 years - between 4 – 25% depending on the company. On average, it can be estimated that 10% energy savings are possible.

Tools for Categorizing Industrial Energy Use and GHG Emissions 309

thus far developed more or less for economic reasons. The same is also true of the use of

To conduct an energy policy, means that we have to build sandboxes where to play and to use the described tools. Unfortunately, in today's world this is more and more difficult. The life cycles of industrial plants have become shorter and production may be transferred from one place to another very quickly without forewarning. For example, the financial crisis has been with us since 2008 and there are no good predications when it will end. Anyway, it is

Aro, T., 2009. Preconditions and tools for cross-sectoral regional industrial GHG and energy

Blok, K., 2004. Improving Energy Efficiency by Five Percent and More per Year? Journal of

Ehrenfeld, J. and Gertler, N.,1997. Industrial Ecology in Practice: The Evolution of

Finland's FNC, 2006. Finland's Fourth National Communication under the United Nations Framework Convention on Climate Change, 2006. Hämeen Kirjapaino Oy, Tampere. Johansson, B., 2006. Climate policy instruments and industry - effects and potential

Lutsey, N. and Sperling, D., 2008. America's bottom-up climate change mitigation policy.

Maes,T., et al. 2011. Energy management on industrial parks in Flanders Renewable and

Motiva Oy, 2008. A state-owned limited company to promote energy efficiency and use of

Stigson, B., et al., 2008. Global sectoral industry approach to climate change: the way forward, CEPS task force report. Centre for European policy studies, Brussels. Tanaka, N., 2008. Worldwide trends in energy use and efficiency, Key insights from IEA

district heat by the industries belonging to the building energy users category.

quite sure that there will be changes in how the industry is located in the future.

efficiency polic – A Finnish standpoint. Energy Policy , 37,2772-2733.

Blok, K., 2007. Introduction to energy analysis. Techne Press, Amsterdam.

Eurostat, 2008. Employment by sex, age groups and economic activity.

responses in the Swedish context. Energy Policy, 32, 2344-2360.

http://epp.eurostat.ec.europa.eu. September 22, 2008.

Interdependence at Kalunborg. Journal of Industrial Ecology, 1:1,67-79.

**Author details** 

**7. References** 

*AX Consulting, Axovaatio Ltd., Finland* 

Industrial Ecology, 8:4, 87-99.

Energy Policy, 36, 673-685.

renewable energy.

Sustainable Energy Reviews. 15,1988-2005.

http://www.motiva.fi. September 22, 2008.

indicators analysis. OECD/IEA, Paris.

Teuvo Aro

Of the emissions, 70% are indirect. In Finland, there are many plans targeted at reducing the specific CO2 emissions of electricity. By 2020, Finland will have at least one new nuclear power plant and the share of wind power and biofuels will have increased. It is very likely that the specific CO2 emissions of electricity will decrease by around 10 – 15% which translates into some 100 000 tons of CO2 emissions.

This drafting "road map" shows that in the Pirkanmaa region it is possible to achieve the target of a 20% reduction in CO2 emissions by 2020 with constant production, but if the industrial production grows by some 2% per year as expected, this target will be challenging.
