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New forest in the Baltic States will make Danish ingredient manufacturer 100% climate neutral

According to HD Forest, more and more companies are interested in investing in and establishing forests in the Baltic States – due to the positive climate effect, but also due to the stable financial return. The ingredient manufacturer Palsgaard will succeed in becoming climate neutral by planting new forest in the area.

When the company Palsgaard with headquarters in Juelsminde, Denmark – in 2010 sets itself the goal of achieving a climate neutral production, not many people predicted that the company would succeed. Not at all within the 10 years that the company itself expected.

But already in 2018, the company – that supplies food companies in most parts of the world with specialized emulsifiers – managed to achieve its goal.

Since then, the company has worked hard to become 100% CO2 neutral. Production accounts for 98-99% of the company's total CO2 emissions, while the last few percent are emissions from transport in company cars and air travels.

”It has certainly not been an easy or cheap journey. However, we have chosen to invest necessarily in initiatives that have contributed to climate neutrality – including hydropower utilization, burning of straw and biogas. The planting of new forest is an important part of compensating for those parts of our business activities that we cannot develop ourselves out of – for example air transport to our locations outside the country,” 

- says Anders Brix, Group CEO for the Schou Foundation, which among other things owns Palsgaard A/S.

Forest is in the DNA

It is not new for Palsgaard A/S to deal with forest – neither in Denmark nor in the Baltic countries. The company has since 1908 owned and operated the manor of the same name in Juelsminde, where forestry has been part of the work.

Since 2003, parts of the profits from Palsgaard A/S and the other of the Schou Foundation's subsidiaries have been invested in forest properties totalling approximately 5,000 hectares in Latvia and Lithuania as part of the investment portfolio. Palsgaard will use some of these properties next year to raise new forest with the help of HD Forest:

“With our existing knowledge of forest management, it seems obvious that we compensate for the CO2 emissions for air travels by increasing the forest area. By planting on agricultural land and pastures on some of the properties in the Baltic States, we can achieve our ambition not to have an adverse impact on the environment through our business activities,” 

- says Anders Brix.

Long-term solution

Forest investments have proven to be an attractive cornerstone of investment portfolios during the more than 20 years that HD Forest has been present in the Baltic countries – with low-risk investments such as forest properties laying a solid foundation with solid returns – especially for investors who have the time and profits to let the trees grow further during the recession and reap the revenue during periods with good wood prices.

says Peter Vind Larsen, director of HD Forest.

“Both companies and private investors are increasingly seeing the benefits of investing in forests. The combination of a stable financial return and a greater recognition of the crucial role of forest and timber products in solving the climatic challenges seems to have increased significance for many investors. The interest in forestry in the Baltic countries has been driven by the financial return in the past. But for the last 18 months, more and more companies – like Palsgaard – are looking for ways to offset their CO2 emissions through afforestation. Both because of the climate benefit, but also because in the long-term a source of income in the form of sustainable wood products is secured.” 

- says Peter Vind Larsen, director of HD Forest.

For Palsgaard, the next step of the journey of becoming completely climate neutral is to calculate the exact area to be planted before the planting can start in 2021. Here, the company has allied with both KPMG to do the calculation and HD Forest to plan and execute the afforestation.

"Climate compensation with forests is a complicated calculation, so one must naturally ally with skilled advisers who can both help with the calculation and put together a forest that makes the calculation a reality," 

- says Anders Brix.

MORE INFORMATION:

Anders Brix, Group CEO, Palsgaard, P: +45 6197 2397
Peter Vind, Baltic Director, HD Forest, P: +45 4019 5152
Anne Eisenberg, Head of Information, HedeDanmark, P: +45 5050 7278

 

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