RESOURCE FLOW MODEL

CREATING NEW BUSINESS, INCREASING RESOURCE EFFICIENCY AND CIRCULATION ECONOMY

Senior Consultant, Ph.D, Associate Prof. Joonas Hokkanen

The 7th Arctic Business Forum on April 6-7 2016, Rovaniemi, Finland

Holistic approach to developing sustainable solutions

Manage the most

challenging environmental

and health risks

Health science related services

In-depth understanding

of financial and legal sectors

RAMBOLL; TECHNICAL AND SCIENTIFIC EXCELLENCE

Ramboll overall about 13.000 employees Ramboll Environment & Health 128 offices in 26 countries More than 2100 environment and health employees serving clients worldwide

THE MODEL HAVE BEEN PRESENTED IN SCIENTIFIC CONGRESSES AND DIRECT TO THE CUSTOMERS

FAQS: CONCERNING RESOURCE FLOWS ON THE COMPANY -AND REGIONAL LEVEL

• How monetary and physical resource flows (€, ton, m3) are directed to the company, to the area, between industries and to the customers (consumption)?

• What kind of value addition arise from the flows – today and in the future?

• What are the total outputs (turnover) (direct and life cycle) from the flows?

• How big is the employment impact?

• What are the total emissions (direct and life cycle) from the flows?

• How changes in technology or demand affect e.g. interactions between departments, companies, industries, output, value added, employment or environmental impacts?

• What is the physical amount of unused waste and residual resources?

• How circulation economy effects to the resource flows and to the economy on the company and regional level

• Etc.

WE PROVIDE ANSWERS TO THESE QUESTIONS !

TO OBTAIN RELIABLE ANSWER TO

THESE QUESTIONS WE DEVELOPED

RESOURCE FLOW MODEL

RESOURCE FLOWS FROM ONE FACTORY/COMPANY/SERVICE

CURRENT SITUATION – NONMATERIAL AND MATERIAL BASED RESOURCE FLOWS: DIRECT AND MULTIPLIER IMPACTS TO THE WHOLE VALUE CHAIN

RESULTS

Outputs and turnover €

Material flows; m3, t, GWh

Value added €

Demand; €, m3, t, GWh

Employment; persons

Salaries and taxes; €

Environmental emissions

Wastes: t

Etc.

AFTER SIMULATION – NONMATERIAL AND MATERIAL BASED RESOURCE FLOWS: DIRECT AND MULTIPLIER IMPACTS TO THE WHOLE VALUE CHAIN

RESULTS

Outputs and turnover €

Material flows; m3, t, GWh

Value added €

Demand; €, m3, t, GWh

Employment; persons

Salaries and taxes; €

Environmental emissions

Wastes: t

Etc.

USING THE RESOURCE FLOW MODEL

1. PROJECT START-UP 2. RESOURCE FLOW ANALYSIS 3. IMPACT ANALYSIS 4. RESULTS

Sources and data

• Customer’s data • Eurostat • Individual country

directives and implementation tools

• Detailed data sourced e.g. EU Waste Framework Directive

• Multiple publicly available reports

• Potential confidential producer interviews

• Ramboll’s internal data sources

Price elasticity

Price

Quantity

Demand

Supply

Selected tools based on the case:

• Activity-based costing (ABC)

• Lean accounting • Resource consumption

accounting (RCA) • Throughput accounting • Product profitability • Cost analysis • Buy vs. lease analysis • etc.

RESULTS

Needed amount of the materials

Compensation of employees

Life cycle cost analysis of the product/services

Level of Circular economy

Forecast of the indicators

Subsidies on product

Revenue Carbon footprint Material efficiency

Unused waste

Multiplier impacts

Taxes

Needed amount of employees

Demand Life cycle assessment of the products/services

Marginal profit Environmental

impacts

Resource network

Businesses

Busin

esses

Current interactions New interactions

1 2 3 4 n

1

2

3

4

n

SOME REFERENCES

REAL LIFE APPLICATION 1: CENTRAL RESOURCE FLOWS IN THE JYVÄSKYLÄ REGION

Blue shading = describes the material use and production by sectors not included in the region's central sectors and for which the quantities have not been determined. The image only shows the material use and production in the region's central sectors.

REAL LIFE APPLICATION 1 : CHANGING THE FUEL IN ELECTRICITY AND HEAT PRODUCTION IN JYVÄSKYLÄ REGION • The local power plant would switch to

using biofuel only (wood and wood chips)

• Production remains unchanged

• The majority of wood originates from other parts of Finland, since is not possible to increase the production of wood in the target region

[VALUE]

[VALUE]

[VALUE]

From the region From other parts of Finland From abroad

Use of wood increases by

360 thousand tonnes

Increased use of wood

Figures are in thousands of tonnes

REAL LIFE APPLICATION 1 : CHANGING THE FUEL IN ELECTRICITY AND HEAT PRODUCTION IN JYVÄSKYLÄ REGION TOTAL IMPACTS

Production impact on the Jyväskylä region

–EUR 3.5 Million

Production impact on other parts of Finland

+EUR 6.5 Million

Impacts on the need for workforce in the

Jyväskylä region +10 employees

Economic impacts

Direct environmental impacts

The life cycle emissions of the energy industry will change from the earlier situation

Greenhouse gas emissions in the Jyväskylä region

–16.5% (–360 million kg CO2 equivalent)

Emissions causing eutrophication in the Jyväskylä region

–1.3% (–3,700 kg PO43 equivalent)

Emissions causing acidification in the Jyväskylä region

–7.8% (–220,000 kg AE equivalent)

Ozone emissions in the troposphere in the Jyväskylä region

–2.7% (100 tonnes 1000 m2 ppm*h)

Greenhouse gas emissions –33.4% (–5.5 million kg CO2 equivalent)

Emissions causing eutrophication –65.9% (9,500 kg PO4

3 equivalent)

Emissions causing acidification –26.4% (–8,800 kg AE equivalent)

Ozone emissions in the troposphere +0.6% (+0.21 tonnes 1000 m2 ppm*h)

REAL LIFE APPLICATION 2 : NEW BIO-PRODUCT MILL IN KUOPIO

The assessment targeted the Finnpulp bioproduct mill in terms of the following:

• Direct impacts on the regional economy in the Kuopio region, Northern Savo and elsewhere in Finland

• Cascade effects in the Kuopio region, Northern Savo and elsewhere in Finland

• Socioeconomic effects of the changes in the regional economy

Vieremä

Kiuruvesi Sonkajärvi

Iisalmi

Pielavesi

Lapinlahti

Keitele

Rautavaara

Juuankoski

Kaavi

Tuusniemi

Leppävirta

Varkaus

Suonenjoki Rautalampi

Tervo

Vesanto Kuopio

Siilinjärvi

Subregions of Northern Savo

Northeastern Savo

Varkaus

Inner Savo

Upper Savo

Finnpulp project

Kuopio

REAL LIFE APPLICATION 2 : IMPACT ON JOBS

Kuopio 750, rest of Northern Savo 750

53% of wood is procured from areas outside Northern Savo in Finland

Kainuu 21% and Northern Karelia 22%

In other provinces, the annual labour need is 1,000 people

Transport 200

Other fields (service, repair, construction)

250

Mill 200

Wood harvesting and forestry 500

Machinery and equipment 150

Other provinces 1,900

Financial administration, support services, wood procurement and sales

80 Trade 50

A total of 3,400 jobs

REAL LIFE APPLICATION 2 : ECONOMIC IMPACTS

GDP EUR 807 million/year, of which EUR 605 million/year to Northern Savo 0.4% of the GDP of the whole of Finland, 4% of the GDP of the entire Eastern Finland, 8% of the GDP of Northern Savo

EUR 700–750 million Turnover

Wood procurement 6.7 million m3

Technical services, equipment, chemicals

Northern Savo 2.1 million m3 / 32% Northern Karelia 1.5 million m3 / 22% Kainuu 1.4 million m3 / 21% Others 0.7 million m3 / 10%

+ Transport

- Includes the sawmill project

Finland 5.7 million m3

Other countries 1 million m3 Production inputs

EUR 500 million

1.2 million tonnes of softwood pulp

Sales income from abroad EUR 605 million

Property tax EUR 1 million corporate tax from traffic tax

Sales income from Finland Electricity 1 TWh, chemicals 60,000 L, EUR 70 million

Salaries Northern Savo EUR 50 million > municipal taxes EUR 8 million In addition, the rest of Finland

Total output: (Sales + own yield)

EUR 1.2 billion + 0.3% in Finland + 4% Entire eastern Finland

REAL LIFE APPLICATION 3: SUSTAINABLE REGIONAL DEVELOPMENT

Planning follows four objectives

1. A city of small buildings

2. A culture of sustainable traffic

3. Urban nature

4. Cleantech and solar power

Östersundom may become a pilot area for solutions based on renewable energy and energy efficiency and an attractive location for cleantech companies. The intention is to use environmentally friendly technology in construction.

Östersundom will become a new district of 70,000 people with a separate centre in the Helsinki metropolitan area, based on rail traffic

http://www.uuttahelsinkia.fi/fi/ostersundom

REAL LIFE APPLICATION 3: CENTRAL LOCATION AND EASY TO REACH

SCENARIOS

Business as usual

Circular economy 1

Circular economy 2

USABILITY OF THE MODEL

Gives understanding on the industry structure and regional economy.

Makes the regional material flows visible.

Reliable picture of the emissions from the production on the region on right magnitude.

Estimate changes on production levels, the regional economy, employment and the environmental impacts caused by changes in technology or demand.

Gives more opportunities to interact with industry, government and residents.

Gives new types of application to sustainable regional planning, the bio-economy, the circular economy and the impact assessment of the projects and plans.

Collection basic data is time consuming

CONTACT INFORMATION

For more information, please contact Joonas Hokkanen or Heikki Savikko.

JOONAS HOKKANEN SENIOR CONSULTANT, PHD, ASSOCIATE PROF. +358 400 355 260

joonas.hokkanen@ramboll.fi

Ylistönmäentie 26, 40500 Jyväskylä | Finland

HEIKKI SAVIKKO DESIGNER, MSC (TECH.) +358 40 124 1194

heikki.savikko@ramboll.fi

PL 718, Pakkahuoneenaukio 2, 33101 Tampere | Finland

THANK YOU