Energy and other raw material supplies for the divisions

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


Lenzing’s biorefinery concept at the Lenzing and Paskov locations makes the Group a pioneer in highly self-sufficient pulp and fiber production. For its other locations, Lenzing is developing energy efficiency enhancement programs.

After historically low prices in the previous year, the 2021 financial year was characterized by extreme price increases for all energy commodities, mainly due to a tight supply situation on the European natural gas market caused by delay in the commissioning of the “Nord Stream 2” pipeline project. Higher demand due to the long winter of 2020/2021 and the good economic situation exacerbated the situation.

Prices for gas and electricity in Europe were well above previous record levels. Natural gas prices were up by 325 percent in 2021, and electricity prices increased by 205 percent. Coal prices rose by 118 percent in 2021 due to the strong economic recovery coupled with a reduction in supply, primarily in Asia.

Prices for carbon credits increased by 108 percent in the year under review, due not only to an artificial shortage of credits issued but also to higher demand for solid fossil fuels such as coal as a consequence of the sharp rise in gas prices.

Oil prices, by contrast, recorded a “moderate” increase of 54 percent during the year under review, due to the dampening effect of global travel restrictions on demand.

The Lenzing Group’s procurement strategy for the main cost components, electricity and natural gas, is based on procurement via the spot market. Price increases on global energy markets consequently also led to a significant rise in the company’s energy costs in the reporting year.

The Lenzing Group’s energy production facilities operated on a largely normal basis in 2021. At the Lenzing site, the construction of the largest open-space photovoltaic plant in the province of Upper Austria is planned on an area of 55,000 m2. The project will be implemented in 2022, subject to final regulatory approvals.

In Paskov, a voltage dip in the European power grid led to the prolonged outage of a turbine. As a consequence, less surplus energy was fed into the public power grid in 2021 than in the previous year.

The power plants in Purwakarta were operated with high availability levels and were further optimized. As the coal price in Asia was still very high in historical terms, energy costs remained high in 2021. The price of coal rose by 45.3 percent year-on-year. The grid electricity price recorded a small increase in comparison and was 4.1 percent higher in 2021 than in 2020.

The rising coal price also affected steam prices at the Nanjing site. On average, the steam price in 2021 was 23.1 percent higher than in 2020. The grid electricity price stood 3.8 percent higher than in the previous year. The switchover in energy production from coal to natural gas, which is intended to reduce carbon emissions, was progressed further in 2021.

Other raw materials

The shock to global commodity markets triggered by COVID-19, especially in the fourth quarter, led to tighter supplies and significant price increases in 2021.

Lenzing is working on a long-term concept to enhance supply security. The successful completion and commissioning of the air purification and sulfur recycling plant at the Lenzing site in 2021 represented an important step along this path. Since the start of construction in 2019, Lenzing has invested approximately EUR 40 mn in the project, which will further reduce carbon emissions and increase self-sufficiency in relation to critical process raw materials.

Caustic soda

Caustic soda is used in the production of pulp and is also an important primary product for the production of viscose and modal fibers. It arises as a co-product from chlorine production. Counter to the general price trend on raw material markets, prices for caustic soda decreased in the first half of 2021 due to oversupply in the market. Lower demand as a consequence of COVID-19 was offset by comparatively high production volumes due to generally good demand for chlorine. The market turned around in the second half of the year, and demand has increased significantly while supply has tightened. This situation led to a significant price increase worldwide.


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 also recorded a significant price increase in 2021, mainly due to higher demand and lower production volumes as a consequence of COVID-19 – with negative effects on availability in the meantime.

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