Swedish forest owner SCA gets more serious about renewables

Swedish private forest owner Svenska Cellulosa AB (STO:SCA A), or SCA, is betting on renewable energy to be a long-term value driver for the company and for this reason, has decided to introduce a dedicated reporting segment for this sector from the start of 2023.

“We see growth opportunities in the renewable energy sector, where we have announced plans to grow our presence in wind power and bio-based energy. Our ambition is that renewable energy will be a long-term value driver for SCA,” president and CEO Ulf Larsson stated on Friday.

The company, which owns about 2.6 million hectares of forest land, has been engaged in the production of renewable energy for some time now. More specifically, it currently produces processed biofuels in the form of pellets, and unprocessed biofuels. Furthermore, it has a 25% interest in a joint project with St1 to build a biorefinery in Gothenburg for the production of 200,000 tonnes of liquid biofuels, including renewable HVO diesel and bio-jet fuel. It is seen to initiate operations at the end of 2023. Overall, SCA has an annual bioenergy production of about 12 TWh.

At the same time, SCA leases out land for the development, construction and operation of wind farms. As of end-September, there were 665 wind turbines spinning on SCA property and producing 6.9 TWh of electricity per year. This is equivalent to 20% of Sweden’s total wind power generation, the company estimates.

The new dedicated renewable energy segment will bundle the production and sale of refined and unrefined biofuels, as well as the development costs and revenues linked to the wind power business and sales of green by-products from industry for energy production.

According to financial results shared on Friday, SCA’s renewable energy operations have contributed SEK 239 million (USD 21.9m/EUR 21.8m) to earnings, before interest, tax, depreciation and amortisation (EBITDA) for the first nine months of 2022. The total group EBITDA for that period was reported at SEK 8.2 billion.

(SEK 1 = USD 0.092/EUR 0.091)

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