1. Demonstrate and Assess New Tools for Environmental Sustainability Stora Enso example Jan Bresky Stora Enso Environment DANTES

2. Demonstrate and Assess New Tools for Environmental Sustainability PROJECT INFORMATION Stora Enso Stora Enso is the largest forest company in the world, and is also the world oldest shareholding company still in operation. We have always been dependent of the surrounding environment (forests) Stora Enso is a global company with ca: 45 000 employees. Strategies developed within DANTES are Emission Trading and Supply Management. Two people from Stora Enso Environment have actively been involved in DANTES.

3. Demonstrate and Assess New Tools for Environmental Sustainability TOOLS & METHODS Company answer to political intentions = Strategy Emission Trading: How to integrate carbon reduction policies into day to day operation at our mills. Supply Management: How to secure Stora Enso’s Environmental standards through the whole supply chain.

4. Demonstrate and Assess New Tools for Environmental Sustainability STRATEGIES Global Awareness International intentions (UN) Federal political intentions National political Intentions Local political intentions –International intention result = Kyoto Protocol 2008 to 2012 –Federal political intentions result= EU ETS –National political intentions result = Different National systems –Local political intentions result = Same system within the national boarders in almost all EU countries Emission Trading Background

5. Demonstrate and Assess New Tools for Environmental Sustainability STRATEGIES Carbon cycle Bio carbon Non-fossil CO 2 Fossil carbon Bio carbon Forest carbon: Increase when growth is larger than harvest (active forest management is positive for the forest growth) Product carbon pool: Increase when accumulation of fibre materials (examples: Timber products in buildings and furniture; paper in books and archives) Fossil CO 2 Mix of fossil and non-fossil CO2 in the atmosphere Atmospheric pool

6. Demonstrate and Assess New Tools for Environmental Sustainability STRATEGIES Carbon storage: Forest vegetation 350 Gt Forest Soils 800 Gt Oceans 40 000 Gt Atmosphere800 Gt Source: IPCC 2000 Global carbon emission equal to 6.3 Gt/y and terrestrial carbon uptake including forest is estimated to 1.7 Gt/y Source: IPCC 2000 Approximately Global Carbon Storage

7. Demonstrate and Assess New Tools for Environmental Sustainability STRATEGIES Mill preparation for EU ETS Trading year one starts Verification of emitted and traded amount for the previous year Trading year two starts Discussions for emission quotas for Kyoto I starts 200420052006 Kyoto I starts 2007 Trading year three starts Time Schedule for Mills for Verification of system and Emission Trading

8. Demonstrate and Assess New Tools for Environmental Sustainability STRATEGIES Setting of boundaries –Juridical owned energy production facilities Common emission calculation methodology –International, UNFCCC, Kyoto, WRI and WBCSD EU, Kyoto, WRI, WBCSD and IPCC –National, adopting EU regulations into National legislations »Branch, adopting WRI and WBCSD methodology for the Industry (NCASI) Preparation and steps on how to meeting the challenges of EU ETS and Kyoto I (1)

9. Demonstrate and Assess New Tools for Environmental Sustainability STRATEGIES Control mechanisms –First Phase (EU ETS 2005 - 2007) Emissions –EU authorities »National authorities and internal verification Financially (IAS International Accounting Standard) –Economic book keeping system of financial value Transparent revision for all involved authorities –Second Phase (Kyoto I 2008 - 2012) Like the first phase but on a global level Reporting structures (IFRIC International Financial Reporting Interpretation Committee ) –Stricter emission reporting to authorities –Strict verified financial reporting to authorities Preparation and steps on how to meeting the challenges of EU ETS and Kyoto I (2)

10. STRATEGIES Demonstrate and Assess New Tools for Environmental Sustainability Emissions Financial Emission grants Hedge fund Emitted quantity Balancing the fond Part of Mill, Division and Corporate financial report EU ETS/Kyoto Emission grants Opening of account Emission calculation Emitted quantity Emission trading Report to authorities Same source with two separate lines of different demands of verifications

11. Demonstrate and Assess New Tools for Environmental Sustainability STRATEGIES Calculation model

12. Demonstrate and Assess New Tools for Environmental Sustainability STRATEGIES Stora Enso Group level & cross boarder CO2 clearing SE Finland CO 2 balance SE Sweden CO 2 balance SE Germany CO 2 balance SE CE CO 2 balance SENA GHG balance SE LA SE A&P Mill 1 Mill 2 : Mill n Mill 1 Mill 2 : Mill n Mill 1 Mill 2 : Mill n Mill 1 Mill 2 : Mill n Mill 1 Mill 2 : Mill n EU/International Green house gas market SEFS performing SE market activities Schematic picture of Emissions Trading management in Stora Enso

13. STRATEGIES Demonstrate and Assess New Tools for Environmental Sustainability Links to further information www.DANTES.info Strategies – Production: GHG Emission trading Tools & Methods – Other info: Conventions – More about Kyoto protocol