Finnish majority state-owned energy company Fortum/Uniper has confirmed in its new strategy released today that it does not intend to align its business with the goals of the UN Paris climate agreement, opting instead to track inadequate national government coal phase-out plans, in defiance of the requirements of its majority shareholder.
The company’s plan to phase-out its European coal fleet overshoots the Paris-compatible 2030 deadline1 by almost a decade, despite UN Secretary-General António Guterres earlier this month emphasising the need for all existing coal in the European Union and OECD countries to be phased out by 2030 at the latest2. The company’s strategy does belatedly commit Fortum/Uniper tothe mainstream pledge of carbon neutrality by 2050, but fails to rollback on the decision to open its controversial new Datteln 4 coal plant in Germany, or mention Uniper’s threat to sue the Dutch government over harm it says the country’s proactive 2030 coal phase-out policy would do to its future profits3.
“Fortum is hiding behind the inadequate coal phase out plans of countries like Germany to excuse its responsibility to align with the UN Paris Climate Agreement,” said Sebastian Rötters, energy campaigner at urgewald. “Its determination to keep Datteln 4 operating until 2038, and drag out the conversion of its Russian coal plant fleet clearly trumps any climate commitment claims. Worse still, there is not a single word about Uniper’s threat to sue the Dutch government under the Energy Charter Treaty, showing that Fortum/Uniper may still look to actively push back against climate action.”
The Finnish government’s state ownership policy4, requires its investee companies to take into account the UN Paris climate agreement’s pathway of limiting warming to 1.5C above pre-industrial levels, yet has so far failed to publicly call out Fortum for its failure to do so. Fortum has promised a reduction of CO2 emissions in European generation of at least 50% by 2030, but this excludes much of its gas business and all its high carbon Russian operations5. It means Fortum and its new subsidiary, Uniper, trail far behind Nordic and European best practice in the energy sector.
“This strategy is a cause of serious embarrassment to the Finnish government and other progressive shareholders,” said Vera Kauppinen, campaign coordinator at Friends of the Earth Finland. “Fortum is lagging far behind its peers when it comes to climate action, and isn’t living up to the standards outlined by its majority shareholder. It’s high time the Finnish government stepped up the pressure on Fortum’s leadership and held them to its own state ownership policy, including opposing the re-election of directors at the next AGM in 2021 if necessary.”
“While other European energy operators are ramping up their renewable energy production, Fortum has merely committed to a very slight increase in what was already a modest renewable portfolio,” said Kaarina Kolle, Senior Finance and Utility Coordinator at Europe Beyond Coal. “We fear the company intends to drag out its coal production, before pivoting to position fossil gas at the heart of its operations into the future, despite its very negative climate impact.”
1The EU and OECD countries must transition from coal by 2030 at the latest in order to meet the Paris 1.5°C temperature target. Source: Climate Analytics (September, 2019). “Global and regional phase-out requirements of the Paris Agreement: Insights from the IPCC Special Report on 1.5°C”
2Politico: ‘No new coal,’ UN chief tells EU
3META EEB: Sued for acting on climate breakdown?
4Finnish Government Resolution on the State Ownership Policy 8 April 2020 (page 9). “Companies need to recognise the impacts of their own operations on the climate, environment and biodiversity as well as establish ambitious goals in this respect compared with their peer companies. State-owned companies are required to take into account the Government’s objective of a carbon neutral Finland by 2035 and the goals of the Paris Climate Convention to limit the rise in global temperature to 1.5 degrees.”
5More than 80% of Fortum’s emissions and more than 50% of Uniper’s come from Russia (excluding scope 3). Sources: Statement by Board of Directors on shareholder WWF Finland’s proposal to amend Fortum’s Articles of Association and Uniper surpasses 2019 financial targets and aims for climate-neutral power generation in Europe by 2035