Sustainability

Climate change

Business strategy, business model and core values

Hafslund is wholly-owned by the City of Oslo and this brings with it certain prerequisites that form the basis of the Group’s strategy. Among other things, the Group shall contribute to realising the City of Oslo’s climate strategy. This shall take place directly by reducing Hafslund’s own negative impact in the form of greenhouse gas emissions and indirectly in the form of taxes, duties to the state and local government and dividends to the owner.

At Hafslund, we work “For a world in balance, with renewables”. The transition from energy production from fossil sources to energy production from renewable sources is not only one of the biggest challenges facing society, but also the most important single solution to climate challenges. Hafslund’s core business, i.e. renewable energy production, will become even more important in the years to come and means that, as a group, Hafslund is well-equipped for the transition that society will need to undergo to slow down and ultimately stop the emission of greenhouse gases into the atmosphere.

Hafslund’s strategy is based on five strategic focus areas to be solved and goals to be achieved by 2035, four of which are closely linked to climate change:

  • Contribute to being climate and nature-positive
  • Contribute to strong growth in renewable energy
  • Contribute to achieving balance for the energy system of the future
  • Engage in smart and green urban development

This means that Hafslund cannot continue to operate as the Group has traditionally done, and must adapt to climate change by:

  • Reducing negative impact by minimize the Group’s greenhouse gas emissions.
  • Adapting operations and management to climate change (climate adaptation). Among other things, this involves protecting our own facilities and local communities against the effects of extreme weather and flooding.
  • Developing new and existing services that make a positive contribution towards slowing climate change and reducing the need for fossil fuels. In the coming years, Hafslund plans to develop more renewable energy and make existing power plants more efficient.

Transitional plan for climate-positivity

In autumn 2023, Hafslund began formalising the transitional plan for net zero greenhouse gas emissions and affirming the Group’s contributions towards limiting global warming in line with the Paris Agreement. The content of the plan has long been a work in progress. The transitional plan further specifies and systemises this work. Guidelines are rooted in the Group sustainability policy and Hafslund has had metrics and targets for reducing greenhouse gas emissions since 2019. Both policies and targets are firmly established with Group management. Hafslund is working on measures to reduce the Group’s emissions. The most important measures are described under Actions.

Hafslund is ambitious in its climate change work and the goal is to become climate-positive by 2030. To achieve this, the Group is completely dependent on reducing its direct and indirect emissions as much as possible. One of the most important measures for reducing Hafslund’s emissions is the company’s carbon capture and storage project currently in progress at the Klemetsrud waste incineration plant in Oslo. In addition, Hafslund must impose requirements on procurements and the company needs to adapt when concerning the development of new power plants.

The carbon capture plant at Klemetsrud will produce negative emissions, i.e. CO2 will be removed from natural circulation. About 50 per cent of the waste treated at the Klemetsrud waste incineration plant originates from biogenic substances. This includes paper, cardboard, wood suitable for recycling and leftover food not sorted as food waste. This means that when the CO2 in this waste is captured and stored, CO2 is removed from the atmosphere. This is also known as Bio-CCS or BECCS, something the European Commission, the United Nations and the International Energy Agency highlight as being of vital importance to achieving the world’s climate goals. Model scenarios show that to limit global warming to 1.5°C or 2°C, Hafslund is reliant on large amounts of “negative emissions” being achieved by removing CO2 from the atmosphere.

Hafslund is ambitious in its climate change work and the goal is to become climate-positive by 2030.

Impact, risks and opportunities

Hafslund has a positive and negative impact on the climate. The world is facing a huge challenge in coping with the transition to a zero-emission society and Hafslund’s most important climate contribution is the production of renewable energy. Hydropower, solar and wind energy are means of clean energy production that have low emissions when compared to the average greenhouse gas emissions from European power production. In the heating and cooling operations, local excess energy, which would otherwise have been lost, is used to produce hydronic district heating and district cooling.

Hydropower plants contribute to the protection of the environment and act as a climate adaptation measure. The reservoirs help reduce the risk of flooding in the watercourses and the associated damage. Hafslund actively uses the reservoirs to mitigate flooding by reducing and levelling out flooding during periods with heavy precipitation and inflow. There is a close and regular dialogue with the Norwegian Water Resources and Energy Directorate, regulatory associations, public authorities and affected parties in the event of flood alleviation and flood situations.

Hafslund’s biggest negative impact on climate change is greenhouse gas emissions. The Group’s largest direct emissions (Scope 1) are from the waste incineration plants belonging to the district heating business. Incineration is the only legal means of treating waste in Norway and if the waste had become landfill, the greenhouse gas emissions would have been about 75 per cent higher than what is emitted from the incineration plants. Excess heat from the incineration process is used to produce heating. However, the greenhouse gas emissions are still significant, and the incineration plant at Klemetsrud is both Hafslund and the City of Oslo’s largest source of point emissions of greenhouse gases. The highest indirect emissions (Scope 3) relate to Hafslund’s development projects for new renewable energy and input factors/fuels for the district heating plants, as well as Hafslund’s investments in other companies.

In 2023, Hafslund conducted a climate risk analysis in line with the TCFD framework. Two scenarios were used in the analysis:

  • “Climate chaos”: Involves climate policy that is not very ambitious or is non-existent, and serious physical climate change – both acute and chronic. This scenario is based on the United Nations Intergovernmental Panel on Climate Change’s climate scenario, with little to no change.
  • “Low carbon revolution”: Is a combination of the United Nations Intergovernmental Panel on Climate Change’s two scenarios for rapid transition and slow transition. Several reports show that society is moving towards global warming of over 1.5°C and Hafslund therefore takes the physical climate consequences of this into account in the low-carbon scenario. Slow transition is used as a basis for physical risk and rapid transition is used as the basis for transitional risk and climate-related opportunities.

The table below summarises the Group’s most significant risks and opportunities related to “Climate change”:

RisksOpportunities
• Physical riskBalance for the energy system of the future
• Greater unpredictability for production and planning due to change in weather patternsNew markets and change in customer needs due to climate change
• Changes in markets due to changes in weather and climateOpportunities and price variations in the energy system of the future
• Increased risk of damage and collapse of infrastructure due to increased frequency of extreme weatherIncreased hydropower production due to climate change
o Transitional riskAccess to green capital
o Uncertainty in price/demand related to raw materials and input factorsCompetitive advantage and new business opportunities when transitioning to the low-emission society
o Failed investments in technology
o Unpredictability and costs due to impending climate regulations
o Increased volatility in energy prices due to higher proportion of variable energy production

How the financial effects of climate risk are taken into account is described in note 1.3 of the consolidated accounts.

Policy/Guidelines

Hafslund has a Group policy for sustainability which ensures that the Group has uniform sustainability principles.

The environment is one of many topics in Hafslund’s “Ethical guidelines and requirements for suppliers“. The guidelines apply to all of Hafslund’s suppliers and any subcontractors that may be used. Suppliers undertake to apply all rights and obligations set out in the guidelines in agreements with their subcontractors.

Climate change 1

Principles directly related to climate:

  • Hafslund shall have metrics and targets that are in line with the Paris Agreement.
  • All companies shall continuously work to reduce Hafslund’s greenhouse gas emissions
  • There shall be continual efforts to increase employee expertise relating to the Group’s environmental impact and ongoing measures.
Klimaforandringer 2

Requirements that directly relate to the important topic:

  • Hafslund’s suppliers shall have an effective system for minimising the negative environmental impact from their own operations, and prefer solutions that result in less energy and resource use and that reduce emissions.
  • Environmental measures are assessed along the entire production and distribution chain – from the production of raw materials to sales. Negative environmental impact shall be reduced along the entire value chain. In line with the precautionary principle, measures shall be initiated to continuously minimise greenhouse gas emissions.
  • Pollution of the atmosphere that has consequences for the climate is one of several important environmental challenges that suppliers are expected to counteract.
  • Suppliers are expected to choose modern and efficient technologies that reduce greenhouse gas emissions.

Actions

Hafslund continuously works to reduce its negative impact, increase its positive impact, reduce risk and exploit opportunities associated with climate change. The measures with the greatest positive climate effect are described below. The measures have in common that they either reduce greenhouse gas emissions and/or that they contribute to increased production of renewable energy or a reduction in the need for fossil energy sources.

Procurement and development projects:

Setting requirements and supplier and partner dialogue are important means through which the Hafslund Group shall limit direct and indirect greenhouse gas emissions.

  • Dialogue conference: In the autumn of 2023, Hafslund took the initiative to arrange a dialogue conference on zero emissions and renewable development of renewable energy in collaboration with Renewables Norway and other players in the industry. The conference consisted of presentations of solutions and needs and dialogue between builders, contractors, machine manufacturers and rental suppliers about what will be required to achieve zero-emission renewable projects.
  • Climate requirements in connection with procurement: In autumn 2023, standard requirements were introduced for greenhouse gas emissions and climate reporting in electrical and mechanical projects in Hafslund’s hydropower activities. Among the new requirements are that projects need to have greenhouse gas budgets and accounts.
  • New supplier for transport and final treatment of fly ash: In 2023, Hafslund Oslo Celsio completed the procurement process for the transport and final treatment of fly ash. Environment and climate were set as the criteria for awarding this contract. As of 2024, the selected supplier has committed to driving 50 per cent of the transport using biogas, and that 1/3 of the distance driven will be replaced by electric ferry.
  • Sustainable and responsible value chains for solar energy: Hafslund participates in a working group for responsible value chains through the Norwegian Solar Energy Cluster (Solenergiklyngen), which is the industry association for solar energy in Norway. This work includes the setting of requirements and environmental weighting in connection with procurements to reduce greenhouse gas emissions in future procurement processes. Among the measures are documentation and traceability in the value chain and requirements for EPDs (Environmental Product Declaration).

Electrification of vehicle fleet:

Hafslund has a target of a 100 per cent electric vehicle fleet by 2025. Hafslund estimates that a 100 per cent electric vehicle fleet would reduce annual greenhouse gas emissions (Scope 1) by 600 tonnes of CO₂e when compared to a 100 per cent fossil fuel-based vehicle fleet. In 2023, Hafslund increased the proportion of electric vehicles since 2022 by 23 percentage points to a total of 56 per cent.

Use of low-carbon materials in projects:

More than 50 per cent of the hydropower business’ greenhouse gas emissions are indirect emissions from the materials used for rehabilitating facilities and developing new hydropower. Low-carbon materials have been used in selected projects since 2022.

Pilot project for Orsendvatn Dam:

Orsendvatn Dam is a 400-metre-long hydropower dam in Hallingdal that, as required by the Norwegian Water Resources and Energy Directorate, is to be rehabilitated. Greenhouse gas calculations made in the preliminary project contributed to the decision to construct a new rock-fill dam downstream of the previous dam. This alternative had the lowest greenhouse gas emissions. Large amounts of rock and soil deposits will be moved during the construction phase, and the aim of the project is to move large quantities of the soil deposits using electric machines and thereby significantly reduce diesel consumption.

Fully electric surface treatment in Aurland 1:

In order to replace the use of diesel generators in the surface treatment of the inner pipeline in Aurland 1, 2.5 km of 22 kV power cable was laid and construction power was installed. This measure reduced the expected consumption of 187,920 litres of diesel and reduced CO2 emissions by 498 tonnes.

Carbon capture at Klemetsrud:

Haflsund Oslo Celsio’s planned carbon capture project at Klemetsrud entered a cost-reducing phase in 2023. The ambition remains to establish carbon capture at the Klemetsrud waste incineration plant, however the path towards that target needs to be adjusted. The carbon capture plant can contribute to reducing a significant proportion of Oslo’s CO2 emissions, and the project is essential for Oslo being able to achieve its ambitious climate targets. The project could also serve as an important international demonstration. Carbon capture will prevent the majority of Hafslund Oslo Celsio’s direct emissions (Scope 1).

Accumulator tank at Haraldrud:

A 33-metre-high “Thermos flask” with space to store more than eight million litres of hot water has arisen at Hafslund Oslo Celsio’s heating plant at Haraldrud in Oslo. The accumulator tank was brought online in 2023. The tank acts as a large energy storage unit and better equips Hafslund Oslo Celsio and Oslo in a number of ways. It allows Hafslund Oslo Celsio to produce district heating regularly and efficiently even if demand fluctuates throughout the day. It also makes it possible to reduce the use of peak loads in district heating production when the electricity grid is under the greatest strain. The energy storage unit also helps maintain stable pressure in the pipe network and functions as an emergency reservoir. This helps reduce downtime in the event of leaks in the grid.

Large-scale solar energy:

In 2022, Hafslund Vekst commenced a new initiative to develop large-scale solar power plants. Together with Magnora and Helios, Hafslund Vekst aims to develop 1,000 MW of large-scale solar power in Norway. There were around 20 projects under development in 2023, and the licensing process with the Norwegian Water Resources and Energy Directorate has commenced for the first of these projects. The goal is to have the first projects ready for development and production in Norway during 2024/2025. In July, Hafslund Vekst signed an agreement with Helios to purchase seven solar projects with 252 MWp capacity under development in Sweden, of which four projects are expected to be ready for development in 2024.

Solar power on roofs:

In 2022, Hafslund commenced a new initiative in collaboration with OBOS to develop local renewable electricity production with solar power on roofs. In June 2023, the first solar installation from Enny was brought online at the Lambertseter centre, a facility with installed capacity of approximately 200 kWp which will provide around 150.000 kWh of locally produced renewable electricity annually. A total of five additional facilities were installed in 2023, which represents a total of 1.400 kWp and approximately 2.500 kWh.

Hafslund and Eidsiva’s onshore wind partnership:

Hafslund has partnered with Eidsiva to develop onshore wind in close cooperation with host municipalities, landowners and local communities. The first stage will involve assessing the potential for wind power in Eastern Norway, and especially locations where the establishment of wind power can solve local and regional power needs and contribute to positive ripple effects.

Zero-emission workboats for the development of offshore wind:

Hafslund collaborates with Fred. Olsen on the development of offshore wind in long-term partnership with Blåvinge. To contribute towards developing zero-emission workboats, pilot project was initiated for zero-emission solutions for the installation and operation of floating offshore wind turbines in the “Green Shipping Programme” (Grønn skipsfartsprogram). The pilot project will assess an anchor-handling tug supply (AHTS) vessel powered by ammonia and battery, to operate between the Utsira Nord offshore wind farm and port of Karmsund during the installation phase of the new wind turbines.

Norway’s most secure and energy-efficient commercial centres for national data storage:

Hafslund and Telenor, together with their partners, have established a company with the ambition of becoming a leading player in the market for data centres for co-location for private and public enterprises, with very strict requirements for security and efficient energy consumption. Together with Hafslund Oslo Celsio, the company will design data centres that have effective solutions for reusing the excess heat for district heating.

Smart power solutions for energy efficiency and relieving pressure on the electricity grid:

In 2023, Hafslund and Volte received NOK 10 million in support from Enova for a project relating on how small and medium-sized businesses (SMBs) can reduce electricity costs and generate revenue by freeing up grid capacity and contributing to balance in the energy system. Volte is 50/50 owned by Hafslund and Eviny.

Metrics and targets

Hafslund has set ambitious metrics and targets related to reducing the Group’s greenhouse gas emissions:

 

Metrics and targetsResult 2023Result 2022Comments
Become climate-positive by 2030546,859 tCO₂e410,274 tCO₂eEmissions include Scope 1, 2 and 3. Scope 2 includes market-based emissions figures.
90 per cent reduction in Scope 1 and 2 by 2030*479,796 tCO₂e351,673 tCO₂e21 per cent increase in Scope 1 and 2 compared to 2019. Market-based Scope 2 has been used. For 2023, Hafslund Oslo Celsio did not purchase guarantees of origin for its own electricity consumption, which resulted in large Scope 2 emissions.
50 per cent reduction in Scope 3 by 2030*67,063 tCO₂e58,601 tCO₂eNew method for calculating Scope 3 in 2023. Emissions in base year* (2019) have not yet been recalculated using the new method.
100 per cent electric vehicle fleet by 202556 per cent33 per cent

*Compared to base year (2019) where it was 395,138 tCo2e for scope 1+2.

The activities and associated emissions for Hafslund’s three business areas are very different. Therefore, separate metrics and targets have also been set for each company to support the Group’s overall metrics and targets, but which are also adapted in such a way that all subsidiaries have to reduce their greenhouse gas emissions.

 

Indicator table

Greenhouse gas accounts

tCO₂e20232022
SCOPE 1 - DIRECT EMISSIONS
Power production7991,053
Total direct greenhouse gas emissions (scope 1)7991,053
SCOPE 2 - INDIRECT GREENHOUSE GAS EMISSIONS FROM PURCHASED ENERGY
Location-based473234
Market-based1210
SCOPE 3 - OTHER INDIRECT GREENHOUSE GAS EMISSIONS
1. Purchased goods and services7,009 7,328
2. Capital goods 8,284 7,490
3. Production of consumed fuel and energy 190 171
4. Upstream transportation and distribution 60 78
5. Waste generated in operations 18 18
6. Business travel 171 157
7. Employee commuting--
8. Upstream leased assets359 354
9. Downstream transportation and distribution--
10. Processing of sold products--
11. Use of sold products--
12. End-of-life treatment of sold products--
13. Downstream leased assets--
14. Franchises--
15. Investments--
Total indirect greenhouse gas emissions (scope 3)16,09115,596
Total greenhouse gas emissions, location-based17,36316,883
Total greenhouse gas emissions, market-based16,90216,659

Explanation for recalculated 2022 value: Improved data quality and calculation methodology for Hafslund’s indirect emissions (scope 3)

tCO₂e20232022
SCOPE 1 - DIRECT EMISSIONS
Waste incineration*202,397197,777
District heating6,9615,859
Total direct greenhouse gas emissions (scope 1)209,358203,636
SCOPE 2 - INDIRECT GREENHOUSE GAS EMISSIONS FROM PURCHASED ENERGY
Location-based10,2053,992
Market-based269,627146,974
SCOPE 3 - OTHER INDIRECT GREENHOUSE GAS EMISSIONS
1. Purchased goods and services6,138 5,411
2. Capital goods74 1,485
3. Production of consumed fuel and energy4,322 4,322
4. Upstream transportation and distribution18 -
5. Waste generated in operations--
6. Business travel--
7. Employee commuting--
8. Upstream leased assets--
9. Downstream transportation and distribution--
10. Processing of sold products--
11. Use of sold products--
12. End-of-life treatment of sold products--
13. Downstream leased assets--
14. Franchises--
15. Investments--
Total indirect greenhouse gas emissions (scope 3)10,55211,218
Total greenhouse gas emissions, location-based230,115218,846
Total greenhouse gas emissions, market-based489,537361,828
*Biogenic emissions190,072188,551

Explanation for recalculated 2022 value: Improved data quality and calculation methodology for Hafslund’s indirect emissions (scope 3)

tCO₂e20232022
SCOPE 1 - DIRECT EMISSIONS
Total direct greenhouse gas emissions (scope 1)--
SCOPE 2 - INDIRECT GREENHOUSE GAS EMISSIONS FROM PURCHASED ENERGY
Location-based2-
Market-based--
SCOPE 3 - OTHER INDIRECT GREENHOUSE GAS EMISSIONS
1. Purchased goods and services463 172
2. Capital goods315-
3. Production of consumed fuel and energy--
4. Upstream transportation and distribution1-
5. Waste generated in operations--
6. Business travel7-
7. Employee commuting--
8. Upstream leased assets3-
9. Downstream transportation and distribution--
10. Processing of sold products--
11. Use of sold products--
12. End-of-life treatment of sold products--
13. Downstream leased assets--
14. Franchises--
15. Investments38,87930,769
Total indirect greenhouse gas emissions (scope 3)39,66730,941
Total greenhouse gas emissions, location-based39,66930,941
Total greenhouse gas emissions, market-based39,66730,941

Explanation for recalculated 2022 value: Improved data quality and calculation methodology for Hafslund’s indirect emissions (scope 3)

tCO₂e20232022
SCOPE 1 - DIRECT EMISSIONS
Total direct greenhouse gas emissions (scope 1)--
SCOPE 2 - INDIRECT GREENHOUSE GAS EMISSIONS FROM PURCHASED ENERGY
Location-based136323
Market-based--
SCOPE 3 - OTHER INDIRECT GREENHOUSE GAS EMISSIONS
1. Purchased goods and services727 811
2. Capital goods-1
3. Production of consumed fuel and energy1331
4. Upstream transportation and distribution11
5. Waste generated in operations--
6. Business travel121
7. Employee commuting--
8. Upstream leased assets11
9. Downstream transportation and distribution--
10. Processing of sold products--
11. Use of sold products--
12. End-of-life treatment of sold products--
13. Downstream leased assets--
14. Franchises--
15. Investments--
Total indirect greenhouse gas emissions (scope 3)754846
Total greenhouse gas emissions, location-based8901,169
Total greenhouse gas emissions, market-based754846

Explanation for recalculated 2022 value: Improved data quality and calculation methodology for Hafslund’s indirect emissions (scope 3)

tCO₂e20232022
SCOPE 1 - DIRECT EMISSIONS
Power production7991,053
Waste incineration*202,397197,777
District heating6,9615,859
Total direct greenhouse gas emissions (scope 1)210,157204,689
SCOPE 2 - INDIRECT GREENHOUSE GAS EMISSIONS FROM PURCHASED ENERGY
Location-based10,8164,549
Market-based269,639146,984
SCOPE 3 - OTHER INDIRECT GREENHOUSE GAS EMISSIONS
1. Purchased goods and services14,337 13,722
2. Capital goods8,673 8,976
3. Production of consumed fuel and energy4,525 4,524
4. Upstream transportation and distribution79 79
5. Waste generated in operations18 18
6. Business travel190 158
7. Employee commuting--
8. Upstream leased assets362 355
9. Downstream transportation and distribution--
10. Processing of sold products--
11. Use of sold products--
12. End-of-life treatment of sold products--
13. Downstream leased assets--
14. Franchises--
15. Investments38,87930,769
Total indirect greenhouse gas emissions (scope 3)67,06358,601
Total greenhouse gas emissions, location-based288,036267,840
Total greenhouse gas emissions, market-based546,859410,274
*Biogenic emissions190,072188,551

Explanation for recalculated 2022 value: Improved data quality and calculation methodology for Hafslund’s indirect emissions (scope 3)

Emission intensity

Emission intensityUnit20232022Comment
CO2 intensity district heatinggCO2e/kWh 23 16Calculated based on methodology in accordance with the EPD regulations
Total greenhouse gas emissions (location-based) per net incometCO2e/Kr16.610.5The value is calculated from the sum of greenhouse gas emissions calculated using the location-based method and consolidated sales revenue from the Group's total comprehensive income
Total greenhouse gas emissions (market-based) per net incometCO2e/Kr31.516.1The value is calculated from the sum of greenhouse gas emissions calculated using the market-based method and consolidated sales revenue from the Group's total comprehensive income

Energy consumption and energy mix

Energy consumption and energy mixUnit20232022Comment
Energy consumption
Electricity consumptionGWh25.522.6
Total energy consumption CelsioGWh2,102.61,919.9
Energy mix and production of renewable energy
Power production*GWh18,46013,800Hafslund Eco Vannkraft's share of production in all power plants
Share of renewable power productionPer cent100100
Production of Guarantees of Origin*GWh18,32013,200
Production of electricity certificates*GWh970780
Power losses as a result of regulatory revisionsGWh5.614.7Regulatory revision Uste and Hallingdal watercourses
Energy mix and production of district heating
Production of district heatingGWh1,9971,807Produced energy for PV grid (supplied to heat exchanger in heating plant)
Share of renewable district heatingPer cent4843District heating produced using renewable energy
Share of carbon-neutral district heatingPer cent5155District heating produced using waste heat
Investments in renewable energy
Increased installed capacity - power production MW - 10
Increased installed capacity - district heatingMW1.550New heat pump in facilities operated by Hafslund Oslo Celsio
Reinvestment in production facilitiesGWh2313
Investment in new productionGWh-43
Renewable energy projects in planning phaseGWh650700Estimate for Hemsil 3, Sarp 2, FKF 5, Frosen, Låvi, Aurland 2 HF 2, Nes, Grotli, Skjefstadfoss 3 and Bjørkum
Electric vehicles
Share of electric passenger cars in the fleetPer cent5633

*Rounded to the nearest 10 GWh