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Orgalim’s Technology at Heart series presents stories showcasing how the companies we represent are shaping a future that’s good for Europe’s economy and society – and how the right policy framework can help them do even more.

In this issue we shine a spotlight on Finland. Discover how Finnish technology companies are breaking new ground in energy efficiency to transform the challenges posed by climate change into drivers of innovation and economic opportunity.

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Published by Orgalim - Europe's Technology Industries, 2019-09-24 03:41:06

Technology at Heart - Spotlight on Finland

Orgalim’s Technology at Heart series presents stories showcasing how the companies we represent are shaping a future that’s good for Europe’s economy and society – and how the right policy framework can help them do even more.

In this issue we shine a spotlight on Finland. Discover how Finnish technology companies are breaking new ground in energy efficiency to transform the challenges posed by climate change into drivers of innovation and economic opportunity.

Keywords: technology,Finland,industry,policy,Europe,EU

Spotlight on
Finland

TECHNOLOGY AT HEART

TECHNOLOGY IN ACTION TECHNOLOGY MEETS POLICY

Discover how Finnish technology companies are Jaakko Hirvola, CEO of Technology Industries of
breaking new ground in energy efficiency to transform Finland, talks to us about how policy can help Finnish
the challenges posed by climate change into drivers of companies continue innovating to drive down
innovation and economic opportunity. emissions in industry and beyond.

TECHNOLOGY
IN ACTION

Unlocking the Driving down emissions
benefits of energy
efficiency Electric motors. They probably don’t cross your mind
too often, yet they drive much of your day-to-day:
What comes to mind when you think of Finland? whether in the pump stations delivering water to
A blanket of forest punctuated by crystal-clear lakes? your home, the district heating systems warming you
A herd of reindeer traversing an Arctic snowscape? through winter, or the elevator zipping you to your
The Northern Lights illuminating the starry night office each morning. This ubiquity comes with a high
sky? This is a place where the wonders of nature take cost in terms of energy, however. Electric motors
centre stage.Yet this Nordic nation is confronted consume around 30% of all electricity used worldwide,
by the same challenges facing us the world over, as and the vast majority of those in operation are woefully
climate change and rising temperatures collide with inefficient. Fortunately there is a company working at
a growing population demanding ever more from the various sites across Finland to turn this around: ABB.
earth’s resources. As emissions rise and the planet
warms at an alarming rate, can we find a way to reduce
carbon emissions and safeguard these ecosystems for
generations to come?

There is light on the horizon, however. Because Finland
is well-known for something else, too: innovative
technology companies that are world-leading in
delivering solutions for a sustainable future. The
country has earned a reputation as a pioneer in the
design and manufacture of low-emissions technology
– in particular in the area of energy efficiency. As a
weapon to fight climate change, energy efficiency has
enormous potential. Not only because the best way to
reduce CO2 in the atmosphere is to avoid generating
it in the first place. But also because saving energy
lowers operating costs, generating clear business
benefits. This makes energy efficiency a rare ‘win-win’
in the quest for sustainability; the challenge is how
to unlock the benefits. For a number of trailblazing
Finnish companies, this challenge is fast becoming an
opportunity.

2 Orgalim - Europe’s Technology Industries

Investing The company has been continuously evolving electric
in energy motor technology to ensure it meets the very highest
efficiency efficiency standards. Production sites in Helsinki and
simply Vaasa already manufacture motors meeting the ‘super
makes good premium’ standard IE4 – a generation above what is
business sense. currently required by EU regulation. The real magic
happens, however, when these high-efficiency motors
Jussi Aarnivuo, Country Environmental Manager, are combined with something known as a variable
speed drive (VSD).
ABB Finland
VSDs solve a fundamental problem of electric motors:
ABB is a Swiss-Swedish multinational specialising in the speed and force of a conventional motor is fixed,
electrification, robotics and industrial automation. In as it is powered by a constant voltage. This is not
Finland alone, it employs 5,300 people at 22 locations, a problem per se, as long as the motor is running
generating annual revenue of €2.3 billion. In addition at the exact speed demanded by the process it’s
to two large manufacturing facilities, the Finnish powering. But what if there is a mismatch – such as in
operation centres on R&D with an annual budget of applications with fluctuating power needs, for example
over €130 million for new tech development – with when operating a fan or a pump? In a conventional
energy-efficient electric motors and drives squarely in system, the speed and force of the motor output can
focus. “We have been designing and manufacturing only be controlled by mechanical means, leading to a
electric motors here in Finland for over 130 years, so whole lot of wasted energy.
we know the technology inside out,” explains Jussi
Aarnivuo, Country Environmental Manager at ABB The VSD has changed the rules of the game. From the
Finland. outside, it is an unassuming box sitting between the
power supply and the electric motor. But inside, some
serious electrical wizardry is taking place as the system
continuously calculates and adjusts the voltage and
current required by the motor at any given moment,
transforming the power current to provide only the
energy the motor needs. Using a VSD can lower energy

Technology at Heart 3

consumption by between 30 and 50%, even as much with a pioneering portfolio of process solutions and
as 90% in some cases. ABB estimates that in 2016 technologies for mining, metallurgy, water treatment
their installed base of motors combined with VSDs and energy production. “Our mission is sustainable use
avoided generation of a whopping 290 terawatt hours of the earth’s natural resources,” says Kari Knuutila,
of electricity – a volume 20% higher than the entire Chief Technology Officer at Outotec, which last year
consumption of France that same year. reported sales of €1.3 billion with a headcount of 4,000.

With technologies like this, ABB Finland is transforming Energy efficiency is a central pillar of Outotec’s
the challenge of lowering emissions into an opening to offering. With many of its customers active in
innovate and create new business opportunities. There traditionally energy-intensive sectors, the company
is enormous untapped potential worldwide, with the estimates that the use of six of its key technologies in
vast majority of motors in use still highly inefficient 2018 prevented generation of a total 6.2 million tonnes
and fewer than 20% equipped with VSDs. Demand is of CO2 – equivalent to metropolitan Helsinki’s total
growing, as Mr Aarnivuo points out: “Energy efficiency carbon footprint. “If Outotec’s best-practice solutions
has certainly become a key factor in purchase were adopted worldwide in the production of non-
decisions.” Because ultimately it is an opportunity for ferrous metals alone, we would save between 40 and
ABB’s customers, too – not only to lower their carbon 70 million tonnes of CO2 annually,” adds Mr Knuutila.
footprint but to save on electricity costs. “Investing in
energy efficiency simply makes good business sense,” One impressive example of how Outotec combines
concludes Mr Aarnivuo. energy and resource efficiency is its innovative solution
for processing waste water. Thanks to the marvels of
Waste not, want not modern engineering, the average person doesn’t need
to think too much about where waste water goes once
In order to protect the planet for future generations, it leaves their home.Yet efficient and safe treatment
energy efficiency will have to go hand-in-hand with processes are vitally important to public health and
effective management of natural resources like hygiene. Outotec’s system is based on pre-drying with
minerals, water and air. Finnish firm Outotec has steam dryer technology followed by a fluidized bed
made it its business to tackle these twin challenges boiler, which allows high-moisture fuels to be burned in
a way that limits emissions.

4 Orgalim - Europe’s Technology Industries

Our mission Forging ahead
is sustainable
use of the Our last example of energy-efficiency innovation
earth’s comes from what is perhaps an unexpected source: the
natural stainless steel sector. Finland is home to Outokumpu,
resources. the fourth-largest producer of stainless steel in the
world, which recorded sales of €6,872 million in 2018
Kari Knuutila, Chief Technology Officer, Outotec and employs over 10,000 people globally. Whether in
your washing machine, your car or your office building,
Where the solution really stands out is its chances are that Outokumpu stainless is a feature of
unprecedented level of energy efficiency. During the your daily life.
drying process, Outotec’s technology uses just one
third of the energy of a conventional system. “We The firm is regarded as the market leader in
have developed a ‘closed-loop’ steam dryer that sustainability for production of both stainless steel
utilises far less energy than a standard open dryer,” and ferrochrome, one of the main raw materials for
explains Mr Knuutila. Steam from the boiler is also stainless steel. In many ways, stainless steel is the ideal
used to power the system turbine, with the result that sustainable material. Corrosion- and heat-resistant, it
the whole operation is self-sustaining: aside from the is made to last. It is also highly recyclable: “In principle
natural gas needed at start-up, the plant requires no stainless steel can be recycled an infinite number of
external source of energy. Not only that, the turbine times,” points out Martti Sassi, Senior Vice President
also generates enough excess power to deliver several and Head of BA Ferrochrome at Outokumpu. “We can
megawatts of heat to the district heating network. be fairly sure that the material leaving our plant will
return to us again in the future to be re-melted and re-
Projects like these have cemented Outotec’s used.” An impressive 87% of Outokumpu’s production
reputation as an innovation leader, giving them a is derived from recycled materials. There’s a catch,
competitive advantage on the global market place. however: whether initial production or recycling, a
“Sustainability is where we have our leading edge,” huge amount of electricity is required to reach the
underlines Mr Knuutila. “And having a reputation 1,500 degrees Celsius needed for the melting process.
as a company that takes sustainability seriously will
only become more important – whether for winning Yet Outokumpu’s Tornio facility has shown how
customers, securing financing or attracting talent.” innovation can maximise efficiency even in a sector
with such intense energy demands. The site is home
to the most energy-efficient unit in the business,
with electricity consumption and CO2 emissions a

Innovation through
regulation?

Technology at Heart 5

mere fraction of the nearest competitors. Their secret We see
weapon is a combination of process innovation and sustainability
advanced furnace technology. “Firstly, we have a as a driver of
unique concept at Tornio where the production of the profitability
input material ferrochrome and the finished stainless – whether
steel is located at the same site,” explain Martti Sassi. lowering raw material outlay
“This means we can utilise ferrochrome in liquid form by recycling, or minimising
directly in our meltshop, where it would otherwise energy costs by increasing
have to be cast, crushed and re-melted.” The second efficiency.
factor is a state-of-the-art system where furnaces are
fully closed and the pre-heating chamber is fuelled by Martti Sassi, Senior Vice President and Head of BA
flue gases routed back from the furnace itself. The end
result is CO2 emissions per tonne produced that are Ferrochrome, Outokumpu
almost 50% lower than at comparable sites elsewhere.
From challenge to
Whether reducing electricity consumption or win-win
recycling input material, sustainability is a core part of
Outokumpu’s business strategy. “We see sustainability Looking to the future, there is broad agreement that
as a driver of profitability,” explains Martti Sassi. the regulatory framework at EU and national level will
“To be profitable in this business you need low unit have a role to play in spurring development of energy-
consumption, and one important way to do this is efficiency technologies. “Regulation has an important
by taking care of the carbon footprint through the role to play when it comes to innovation,” comments
whole value chain – lowering cost of raw materials by Jussi Aarnivuo of ABB Finland. “As energy-efficiency
recycling, or minimising energy costs by increasing targets become more demanding year by year, there
efficiency”. is increased demand for the products and systems
that help keep consumption in check.” Outotec’s
Technology explained Kari Knuutila agrees: “When EU targets sets the bar
higher, new technologies need to be developed to
A variable speed drive works by converting step up efficiency – and that creates opportunities
fixed frequency alternating current (AC) for companies like ours.” He strikes a note of caution,
power (the kind that comes from a standard however, that “regulations need to take into account
power outlet) into variable frequency, variable the competitive position of European industry
voltage AC power that can be adjusted to meet globally. We must ensure we continue to have a strong
changing power requirements. To do this it European industry that can deliver the innovation we
first uses a rectifier to convert the AC power need.”
into direct current (DC), before smoothing
the electric waves using a capacitor to ensure The example of energy efficiency makes clear that
a clean supply of electricity. The drive then technology can deliver win-win solutions that not
calculates the voltage and current needed by only address the challenge of climate change but
the motor before feeding the DC power into an transform it into a driver of prosperity for European
inverter that emits AC power at the exact level industry. Asked about ABB’s sustainability philosophy,
required. Jussi Aarnivuo highlights the three pillars of social,
environmental and economic progress. No doubt his
A fluidized bed boiler is a reactor system conclusion would be echoed by counterparts across
that contains a bed of sand particles or similar, the Finnish technology industries: “Sustainability is
to which air is added so that the bed behaves about balancing these three elements to the benefit of
as a fluid – creating ideal conditions for burning all stakeholders – and energy efficiency is an area that
solid fuel at a low combustion temperature. offers many synergies to do just that.”
Benefits include high energy efficiency and
lower emissions.

6 Orgalim - Europe’s Technology Industries

Promoting EU leadership in the clean
energy transition

Faced with the increasingly urgent challenge become increasingly cost efficient, while offering
of climate change, the Paris Agreement aims myriad opportunities for consumers to actively
to limit global warming to well below 2°C, engage in the energy market – saving them
and ideally to 1.5°C. The industries Orgalim money and reducing their carbon footprint.
represents develop and manufacture technology Orgalim is convinced that Europe must continue
solutions that can help achieve this by enabling to seize the opportunities of these new realities
decarbonisation throughout the economy for both citizens and businesses. A crucial step
– giving the EU a window of opportunity to will be to push forward with the implementation
spearhead the Paris implementation process of the EU’s Clean Energy for All Europeans
while promoting European technology Package at national level.
leadership.
Orgalim’s work on clean energy aims to
To this end, Orgalim works on climate and support a successful energy transition by
energy issues centred around the EU climate promoting ‘energy efficiency first’, advocating
strategy and targets, sector coupling, for a well-functioning integrated and flexible
digitalisation as an enabler, the UN Framework energy market, more renewables and smart
Convention on Climate Change (UNFCCC) – with infrastructures, and making the case for a
energy efficiency playing a central role as an robust governance system. Moreover, we
effective means of lowering carbon emissions promote creating conditions for sustainable and
across sectors. connected buildings that are equitable, safe and
climate responsive, as buildings are increasingly
Our industries innovate in the context a flexible energy source in themselves –
of an ongoing ‘3D’ change in the global allowing active ‘prosumers’ to self-generate
energy landscape, driven by digitalisation, and -consume, aggregate, trade and sell surplus
decarbonisation and decentralisation. At the electricity to the grid.
same time, new technologies have matured and

Technology at Heart 7

TECHNOLOGY
MEETS POLICY

In conversation with Jaakko Hirvola, CEO,
Technology Industries of Finland

Jaakko Hirvola is CEO ofTechnology Industries of and medium-sized enterprises. In fact about 90% of
Finland, Orgalim’s Finnish member association. We spoke our companies are SMEs, a reflection of the industry
to him about the value of European collaboration and landscape in Finland that is characterised by a very
global trade to an open economy like Finland – and about strong SME sector.
how this Nordic nation is leading the change when it
comes to driving down emissions in industry and beyond. How has business been for your companies in
recent years?
Who are the technology industries of
Finland – what kind of companies does your As we stand at this moment, we can look back on a
association represent? period of really strong growth in the past two to three
years. Last year alone our industries’ turnover was up
We speak for around 1,600 companies across five 6%. But clearly the global economy is weakening, and
sub-sectors: the electronics and electrotechnical talk of rising protectionism and international trade
industry, mechanical engineering, the metals industry, wars is a big worry for our export-oriented companies.
information technology and consulting engineering. This could have serious consequences for the Finnish
Taken together these sectors directly employ around economy as a whole: as a very open market, Finland
318,000 people, represent around half of Finnish is highly dependent on exports and global trade – so
exports and are responsible for some 70% of Finnish how the technology industries are performing is
private sector research and development – making very important for the economy overall. It will be of
the technology industries a vital player in Finland’s critical importance in the coming years to focus on
economy. Our member companies range from big strengthening an open market across the EU and
names like Outokumpu, Outotec and ABB to very small globally.

Jaakko Hirvola

Jaakko Hirvola has been CEO at Technology
Industries of Finland since 2018. An M.Sc.
graduate in telecommunications and
information technology, he has worked in
multiple executive roles in leading tech sector
companies and consultancies – most recently as
CEO & Country Managing Partner at EY Finland.
His expertise centres on leadership, business
development, process improvement and ICT
strategy, with a particular focus on digital
disruption of businesses across industries. Mr
Hirvola has been a member of the Orgalim Board
of Directors since June 2019.

8 Orgalim - Europe’s Technology Industries

Trade is clearly a big priority for your In profile: Technology
members. What are the other major Industries of Finland
challenges they are facing and where are
they asking you to act? ‘Advancing’ is the key word driving the work
of Technology Industries of Finland, the
Without a doubt the number-one challenge at the leading advocacy organisation for technology
moment is the skills shortage. We are really running companies in the Nordic nation: advancing
out of skilled labour across all levels and given competitiveness, sustainable growth and the
the changing profiles and expertise required for a renewal of the labour market for its 1,600
transformed world of work, this is becoming a big member companies and the Finnish economy
issue in Finland. Immigration will have a role to play more broadly.
in addressing this but we will also have to work on our
education system: it is not in bad shape and globally Engaging with government and societal
it has a very good reputation, but nevertheless we stakeholders, Technology Industries of Finland
will need to ensure we stay relevant in terms of future ensures the industry voice is heard in policy
competencies. decisions, negotiates collective agreements
on behalf of its members and promotes the
Another question is closely related to trade and that is public image of the sector among the public at
the international working environment our companies large. The association also delivers services to
operate in. Our members want us to lobby for a member companies ranging from information
globally fair level playing field to make sure they have collection and dissemination, training and
the same chances of success as competitors from other advice on employment issues and networking
countries. Having a strong voice around the EU table opportunities.
and at a global level is very important in this regard,
and it raises questions and priorities for the Finnish Technology Industries of Finland is active in a
Presidency of the Council of the EU in this second half number of international organisations including
of 2019. Orgalim, where CEO Jaakko Hirvola sits on
the Board of Directors. Through its work with
Our expectation for EU and Orgalim, the association collaborates with
national policymakers is to fellow European associations on topics of key
support industry in innovating importance to Finnish companies such as energy
new solutions to shrink the policy, research and innovation, the Internal
global carbon footprint – Market framework and international trade.
creating at the same time an
export opportunity for European

technology companies.

Speaking of the Council Presidency, how does
it affect your advocacy work at EU level when
it’s your own national government at the
helm?

Well on the first day of the Finnish Presidency we
could look out the window of our offices here to see
the European flags raised around Helsinki. Of course
we had been actively engaging with the relevant
government ministries long before this in preparation

Technology at Heart 9

I strongly believe that the technology industries have a key
role to play in solving the global challenges we face – from

everything related to climate change to the many social
questions that we can address through innovation.

for the Presidency, to work on the priorities as we see where industry-led ecosystems and partnerships
them for industrial policy for example. One interesting are driving development together with academia
complication is that we had a national election just and research institutions – through instruments like
this spring, so the political leadership and ministers in Horizon Europe, for example.
charge for the EU Presidency were selected only a few
weeks before the 1 July start date. So we have been And third, policymakers must work to ensure the
working quite intensively to prepare in time and ensure Single Market is functioning as it should, including
the voice of our industries gets heard. when it comes to digital – a proper free flow of data
across the EU will support development of AI, digital
This autumn sees the start of a new services and the real-time economy. For a small
legislative period for the EU, with a newly economy like Finland, a functional Single Market is a
elected European Parliament and freshly key enabler.
appointed College of Commissioners. From
the perspective of Technology Industries of Zooming in on climate policy, our ‘Technology
Finland, which top three priorities should this in Action’ case study focuses on Finnish
new crop of policymakers focus on over the companies innovating to boost energy
next five years? efficiency in their own industries and across
sectors. What do you see as important
Climate policy tops the list. The EU already has the success factors to support this on the policy
objective of being CO2 neutral by 2050, and with a side?
few exceptions most Member States are committed
to this target. Finland is even more ambitious, stating Implementing the Energy Efficiency Directive will be
that we want to be CO2-neutral by 2035. The Nordic key. Finland is a good example where implementation
countries are to some extent forerunners in that has been mostly based on voluntary energy efficiency
regard: in Finland, for example, industrial greenhouse agreements that currently cover more than two-thirds
gas emissions have decreased by one third in the last of the Finnish energy use, showing the benefits of
eight years. So our expectation for EU and national focusing less on legislation but on doing as much as
policymakers is to support industry in innovating possible on a voluntary basis. It will also be crucial
new solutions to shrink the global carbon footprint – to foster innovation in technology solutions. To take
creating at the same time an export opportunity for one example: Finnish industrial CO2 emissions total
European technology companies. For our part, Finnish 16 megatonnes per year. The solutions developed by
industry is committed to decreasing its own footprint Finnish company Outotec for companies in the metal
in line with climate targets. It will require quite a big sector have a handprint of 6 megatonnes negative
investment for our companies but they are willing to – that’s more than one third of the overall Finnish
meet the challenge head-on. industry footprint. This goes to show that we can do
so much more than only making efforts to mitigate
The second priority is innovation: R&D&I must be climate change within our own four walls.
prioritised in both EU and national budgets going
forward. Unfortunately R&D&I investment in Finland As a newly appointed member of the Orgalim
has declined quite badly in the last 10 years post-2008 Board of Directors, you will be working even
recession; it’s only now that we are seeing the trend more closely with Orgalim heading into the
reverse with an uptick in investment this year. But it new EU legislative term. What is the added
is still not enough: in Finland and across Europe we value of European collaboration in this forum
need to boost funding particularly for applied research, for an association like yours?

10 Orgalim - Europe’s Technology Industries

We are a very small economy here in Finland, so it’s The Finnish
really critical to work through an organisation like technology industries
Orgalim to strengthen our voice and make sure we get
heard. Moreover, speaking as European industry with at a glance
one European voice is vitally important. And looking
at Orgalim’s ‘2030: an industry vision for a renewed Turnover
Europe’, it is fully in line with the priorities we are
driving at Technology Industries of Finland. Our sectors € 77 billion
are undergoing a significant transformation both here
in Finland and across the EU – supporting this through Employees
a European organisation like Orgalim is much more
powerful than only working at local level. So we are 318,500
really looking forward to working even more closely
with Orgalim in future. Exports

As a very open market, Finland € 14.5 billion
is highly dependent on exports
% of total
and global trade – so how Finnish exports
the technology industries are
performing is very important 50%
for the economy overall. It will
Companies
be of critical importance in
the coming years to focus on 1,600
strengthening an open market
across the EU and globally. Growth

One last question: how would you frame 6%
your own personal vision for 2030 for the
technology industries in Finland and in *2018 figures
Europe more broadly?

Well I strongly believe that the technology industries
have a key role to play in solving the global challenges
we face – from everything related to climate change
to the many social questions that we can address
through innovation. My vision is that we as the
European technology industries will step up to assume
the responsibility of making sure that our living
environment will continue to serve us well in
the future.

11Technology at Heart

47 Orgalim’s Technology at Heart series presents stories showcasing
how the companies we represent are shaping a future that’s good
for Europe’s economy and society – and how the right policy

framework can help them do even more.

Orgalim represents Europe’s technology industries: companies that
innovate at the crossroads of digital and physical technology. Our
industries develop and manufacture the products, systems and services

that enable a prosperous and sustainable future.
Ranging from large globally active corporations to regionally anchored
small and medium-sized enterprises, the companies we represent
directly employ 11 million people across Europe and generate an annual

turnover of around €2,000 billion.
Orgalim commits to champion an EU policy agenda for sustainable
growth; to support the industry in its transformation; and to advance
dialogue between business, policymakers and citizens on the relationship

of technology to society.

ORGALIM REPRESENTS:

15

Associations Countries National member European sector Industries:
associations
associations mechanical engineering;

electrical engineering, electronics

and ICT; metal technology

Boulevard A Reyers 80 | B1030
Brussels | Belgium

[email protected]
+32 2 206 68 83
@Orgalim_EU

www.orgalim.eu

SHAPING A FUTURE THAT’S GOOD

Orgalim is registered under the European Union Transparency Register All rights reserved @ September 2019, Orgalim
ID number: 20210641335-88 Editeur responsable: Malte Lohan, Director General

Photo credits: p.2-3 – ABB; p.4-5 – Outotec; p.5-6 – Outokumpu; p.8 – Jaakko Hirvola. Icon credits: p. 11 – by Freepik, Kiranshastry, Icongeek26, from www.flaticon.com


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