Divisional supplies of energy and other raw materials

In the Fiber and Pulp divisions, energy and other raw materials are significant factors influencing the Lenzing Group’s financial position and performance.


With its biorefinery concept at its Lenzing, Paskov and Indianópolis sites, Lenzing is one of the pioneers of fiber and pulp production that is as self-sufficient in energy as possible, and is continuously working to enhance energy efficiency at its other production sites.

The energy reserves at the Lenzing Group’s European sites remain very well filled in light of the geopolitical situation and associated uncertainties.

Energy prices were down significantly again in 2023 following the record rise in the previous year. The marked reduction in gas consumption in Europe due to warm temperatures and continuous substitution, and, as a consequence, a lower level of industrial demand, played a major role in this context. Spot market prices were down by 66 percent in the reporting year. The price of electricity decreased by 61 percent. Coal prices also posted a similarly negative trend, reducing by 55 percent. The oil price decreased by 17 percent in the reporting year. Only the carbon dioxide price recorded an average increase of 3 percent, although the price was down significantly towards the end of the year.

The Lenzing Group partially restructured its energy price hedging in the first quarter of 2023 in the wake of the supply crisis and thereby reduced its exposure to the risk of price changes. Natural gas and electricity are now procured in accordance with a defined purchasing strategy, under which part of the energy required is procured via fixed supply contracts with fixed prices on the forward market. For this reason, spot market trends have only a weakened impact on the company’s energy costs.

In November, Lenzing signed a supply contract with Austrian electricity producer WLK energy for the purchase of around 13 megawatts of wind power. Lenzing is thereby not only underlining its commitment to climate protection and the energy transition, but is also investing in long-term electricity supplies that are diversified and offer stable prices. The contract has a term of fifteen years and provides for supplies from the new wind farm in Engelhartstetten from the first quarter of 2025 onwards. All of this electricity is utilized at the production site in Lenzing.

Moreover, since November 2023, the Lenzing production site has been supplied exclusively with green electrical energy from a 5.5 MWpeak PV system constructed in the district of Deutschlandsberg (Styria). Several photovoltaic systems were already installed at the Lenzing site in 2022. These include the largest open-space system in the state of Upper Austria, which was fully commissioned in the first quarter of 2023.

The energy plants at the Lenzing site operated mainly in normal mode during the reporting period with very low downtimes. A number of energy efficiency projects were launched in the reporting year and will be implemented continuously over the coming months.

In April, Lenzing signed a contract for the acquisition of the 43 MW biomass power plant of ENERGIE 42 Beteiligungs GmbH located in the Heiligenkreuz Business Park in Austria’s Burgenland region. This strategic investment enables Lenzing to secure long-term energy supplies for the Heiligenkreuz site and increased its competitiveness significantly.

With the continuous expansion of renewable energies, Lenzing is making itself less dependent on global energy markets and is continuing to reduce its carbon emissions in line with its strategic targets.

The power plants in Paskov operated normally during the reporting period. Surplus energy was fed into the public power grid.

Natural gas prices in North America recovered in line with the international trend. Prices at the Mobile site (USA) dropped sharply. By contrast, the electricity price was higher year-on-year.

The plants in Purwakarta (Indonesia) were operated with a high level of availability and were further optimized. Prices for coal and electricity decreased compared to the previous year. Lenzing has been sourcing green electricity from renewable sources at its Indonesian site since the third quarter of last year.

Steam prices at the Nanjing site in China are recovering at a slower pace compared to coal prices and in 2023 were slightly lower year-on-year. The grid electricity price was also down. The changeover in energy production from coal to natural gas, which is intended to reduce carbon emissions, was continued in the reporting year.

In the first half of 2022, the lyocell plant at the Prachinburi site (Thailand) was commissioned. The price of steam decreased slightly in 2023 compared to 2022, while the price of electricity rose.

Other raw materials

The sharp rise in energy prices due the pandemic and the Ukraine war also led to supply shortages and significant price increases on global commodity markets. In the 2023 reporting year, most commodities recorded a significant recovery, although prices remained at elevated levels.

Caustic soda

Caustic soda is used in the production of dissolving wood pulp and is also an important primary product for the production of viscose and modal fibers. It arises as a byproduct from chlorine production. Prices for caustic soda fell significantly at the beginning of the year but remained at an elevated level over the rest of the year. This is due to relatively stable demand coupled with a shortage of supply due to diminishing demand for chlorine.


Sulfur is an important starting material for the production of carbon disulfide and sulfuric acid. In turn, both raw materials are used in the viscose process. Sulfur prices remained stable in the reporting year, at a slightly higher, pre-crisis level.

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