Good morning, welcome to this Capital Markets Day. My name is Björn Lyngfelt. I will be your moderator during the day. The program will start from the top with strategies and plans for the future, then we will bring you on a walk through our value chain, ending on our sustainability agenda for the coming decade. We will have three Q&A, question-and-answers, session during the day. You ask your questions by putting your name and your question in the box below the screens with the presentation. You can do that anytime. You can start asking your questions now, we will try to answer them to the best of our ability. We'll start with a helicopter view with the strategies and plans for the future. Ulf Larsson, President and CEO of SCA, the floor is yours.
Thank you, Björn. Also from my side, a really good morning to all of you. It's my privilege and pleasure to wish you all welcome to SCA's Capital Markets Day. Of course, the initial thinking was to meet in person and to give you the possibility to see some of our initiatives and ongoing projects, and maybe also have a visit in one of our beautiful forest locations. Due to the circumstances, that is not possible now, and we have to settle with this digital arrangement. The unique asset in SCA is the forest, 2.6 million hectares of forest land, and by that we are the biggest private forest owner in Europe. Forest is the unique asset in the company and around this forest we have built up an entire industrial ecosystem.
Every day, we have to strive to maximize the value in this integrated value chain. That is also the reason why we recently have announced a couple of big projects just in order to improve our long-term profitability. As Björn said, our business area managers, they will walk you through all these projects and initiatives. If we start with the tree again, we can state that the most valuable part of the tree is the bottom part. That's the reason why we have invested quite heavily in our five super efficient, and I must say world-class when it comes to productivity, sawmills. That is really important because 75% of the value for a forest owner is coming from our sawmills.
Beside solid wood products, we also produce bark, sawdust, and that part is going to our energy business, and our wood chips, which is 33% of the log, is an important part of the feedstock for our pulp and paper industry. To the pulp and paper process, we also use the upper part of the tree, and from that process, we also get tall oil, black liquor, bark and so on, which is again used for our energy business. In our energy business, we use these byproducts, but we also use branches and tops from our trees. In addition, we today have around 20% of installed capacity in terms of wind power on SCA land, and that is, of course, also to increase the return from our forest holdings. Sustainability is another vital part of our business model, and sustainability is also an integrated part in all our business.
From a SCA perspective, we look at sustainability in a somewhat broader perspective. For me, it's very important with safe workplaces. It's also important that we have prosperous local communities where we have our operations. We also look into an efficient use of resources, that is not the least what we are working with in our research company on campus to the Mid Sweden University. Also, of course, biodiversity. Maybe the most important thing is to maximize the growth in our forests, because it is the growing forest that can give the best contribution to a fossil-free society. If you take a look at this slide, start from the left-hand side, you can see that the net binding capacity in our forests are a little bit more than 5 million tons of carbon dioxide per year.
The reason for that is, of course, that every time when we harvest a tree, we replant with 2 to 3 new ones. The growth in a new seedling is maybe 30%-40% higher than in the old one. We invest a lot of money into other silviculture operations, such as pre-commercial thinning, fertilization, commercial thinnings, and so on. Where we can, we also use Pinus contorta, a species where we can gain at least 30%-40% higher growth than in comparison with our normal Scots pine, and so on. Maybe more important is the substitution effect. If we can replace non-renewable and fossil-based products with renewable products, that give for us another, an additional contribution of around 6 million tons of carbon dioxide per year.
Here we talk about replacing plastics with paper, replacing fossil fuels with bioenergy, replacing concrete and steel with solid wood constructions. The third leg in this model is, of course, the emissions from our operations. Every day we try to reduce the emissions as much as possible. If we look into the industry, you can see that during the past 10 years, we have not more than 50% of the emissions today that we had 10 years ago. Of course, when we do all our big investments, we look into the best available technique, which is good for profitability, but not least good for the environment. In 2019, the SCA climate benefit was a little bit more than 10 million tons of carbon dioxide, which corresponds to emissions from all passenger cars in Sweden.
As Björn mentioned, we have now set new group targets for sustainability, we will come back to that later on. This will guide us to increase our positive impact during the upcoming years. This slide show our strategy for profitable growth, it consists of two components, the first one is to grow our forest asset. The most important thing here is, of course, to invest money in our current forest holdings, by that secure that we have and maximize the growth, by that, we will have a long-term higher harvesting potential. That is also what Jonas Mårtensson, head of our Business Area Forest, will tell you about later on. The other leg in this field is to acquire forest land, we will come back to the program that is ongoing just now.
We also like to increase the value from each tree, and I must say that we in the last three years have taken actions in all these items. We have been able to grow our pulp business. We have taken a decision to grow our Kraftliner and packaging business. We are doing a lot of things in renewable energy. We can see a substantial growth in what we do in wind, but we also have a lot of ongoing projects in other fields of renewable energy. I think that one will be maybe one of our most fast-growing segments going forward. Last but not least, we have finally taken the decision to leave our publication paper business. You have also seen this staircase showing our project portfolio for driving profitable growth.
If we start to the left-hand side with the Östrand project, that one is now up and running. It was in time, on budget, and it was totally financed through operating cash flow. I mentioned wind, and I mentioned that we already today have 5 TWh of installed capacity, which is equal to approximately 20% of the total production capacity in Sweden. Here we have agreements, so we already today know that 2023, we will reach 9 TWh. The new long-term target in this area is 11 TWh in 2025. We have taken the decision to go for a brand new Kraftliner machine in Obbola. That one will be the biggest in the world, and this one is starting up soon after the big project in Östrand.
That might be seen as a little bit risky, but for us, it's a fact that this is a fantastic project, and I feel that we have the competence and we have a really good proven record for running these big projects. We will come back to that, of course, later on. We have also taken the decision to close down our CTMP production at the Östrand site and move the production over to Ortviken, and by that, increase our net production of pulp with another 200,000 tons. Last quarter, we also announced that we will finally leave publication paper and close our three remaining publication paper machines during the first quarter next year. We have our ongoing program in the Baltics to buy 100,000 hectares of forest land in five years. Last quarter, we also announced that we have bought another 20,000 hectares.
As I said, we do a lot of different things in our renewable energy business. We mentioned wind, but Mikael Kjellgren, head of our energy division, will tell you more about all other ongoing projects into this area. I said also in Östrand, we know that we have a potential for further capacity increase, and the first step to go for more capacity in Östrand was to take the decision to close down the CTMP production in Östrand, and that is done, and now we will work hard to see what is the best possible way forward in this area. Last but not least, in the big project that we did perform in Östrand, we also created a fantastic infrastructure for going forward with the full-scale biorefinery, and here we talk about liquid biofuels, green chemicals, and so on.
We've taken now the first step, so we have got the environmental permission, and we will continue the work in this area. Some more details about our big upcoming projects, and starting with Kraftliner. As I said, this machine will be the biggest Kraftliner machine in the world. It will also give unique opportunities for high-quality products in this mill. Already today, Obbola is the biggest machine for producing Kraftliner in Europe. By that, I also say this machine will be super competitive, of course. We really feel that if you look into the market, we have a steady and growing market in this business. If we then walk over to CTMP, we have last quarter announced that we will invest SEK 1.45 billion in order to increase our net capacity of CTMP by 200,000 tons.
It will be very capital efficient, because CapEx for this investment is no more than 5,000 SEK per ton, which is maybe one third of a greenfield line. We will have our current customer base as the platform, the increase will be in board and tissue, where we have a steadily increasing demand. Of course, also in this new mill, we will be very competitive when it comes to cash cost. Kristina Enander, head of our pulp business, will give you more details into our CTMP products. Last but not least, as I said, the fact that we have now decided to close down our CTMP line in Östrand give also opportunities for further expansion in our NBSK pulp production.
Last quarter, we also announced that we have now decided to leave our publication paper business. With that, we will close down our three remaining publication paper machines during the first quarter next year. We have seen for many years a structurally declining market in this field. During the pandemic, we lost in one go 30%-40% of the market. We don't think that we will come back to where we were before the pandemic. We've also said many times that we will run this business as long as we have a positive cash flow. Now we reach the point where we have to take the decision to close down and leave. Mats Nordlander will give a couple of few more words around this issue. Our program for acquiring forest land in the Baltics.
We've said that we should reach 100,000 hectares in five years. With the acquisition that we did announce last quarter, we have now in one and a half year done 50% of that program. The reason for this is, of course, that price on forest land in this area is, as we see it, quite cheap. Very much what we have to pay for a piece of land in the northern part of Sweden, but the growth potential is maybe two to three times higher in the Baltics in comparison with what we have here in our area. This will, of course, long-term strengthen our fiber supply base in a good way. As I started, I said that we all the time have to strive to maximize the value in our integrated value chain.
If we summarize a little bit, starting on the left-hand side, one can see that we now, during the coming five years, successively can ramp up our harvesting level. That is, of course, due to what I said, that we have done a lot of investments in our forest holdings in order to increase the growth, and by that, also the harvesting potential. That will give a substantial cash flow. We've talked about SEK 300 million per year as a potential when we are in 2025. We've talked about our sawmills, and we have done a lot of investments in our sawmill business for many years. We have reduced the number of sawmills from 11 to five, and by that, I can say today that we have world-class productivity and cost efficiency.
That is really important because 75% of the value in the forest is coming from our sawmills. We've taken the decision now to leave publication paper as we've seen a negative cash flow, that is absolutely according to what we've said before. In less than 10 years, we have gone from more or less 2 million tons in annual production down to first quarter next year, zero. Started back in 2012 when we decided to divest both Aylesford and Laakirchen. We closed down paper machine number two at Ortviken in 2015, as I said, in the first quarter, we will close down our remaining three machines. That will, of course, give us possibilities to put our efforts and resources into other, more fast-growing and more profitable segments.
In Kraftliner, we really believe in the packaging market, and we have a fantastic project in Obbola, and not the least, the quality that we can produce from the forest base that we have in this region is unique, and this new machine will give us fantastic opportunities, both when it comes to cost efficiency, but also when it comes to product quality. In pulp, we are now up and running with our Östrand mill, and we have decided to go for another 200,000 tons of CTMP, and we are working hard to see how we can do the next step in our pulp expansion in Östrand. Last but not least, renewable energy. Here we have 20% of installed capacity already today in our wind business.
As I said, Mikael Kjellgren will give you some examples of what we are doing and working with in terms of other parallel projects into this interesting business. I think this will be one of our most fast-growing segments going forward. I will for now end up with this slide saying that our model has what I believe proved to show that we are continuously creating value. During this period, the last three years, we've done close to 130% in terms of total shareholder return. If we compare that with the average on the Swedish stock market for the same period, we've done more or less four times in comparison to the average. By that, I hand over to Toby.
Thank you, Ulf. I could add that the presentations here will be made available on our website, but not until after the Capital Markets Day. We don't want to spoil the fun. We'll keep the helicopter view and Toby Lawton, our CFO, will now add some meat to the bones or at least figures. Toby, please.
Thank you, Björn. Good morning, everybody. I'll start with this slide, which shows the history of SCA. Some people have said this is a bit too backward-looking. I think it really shows how an investment in a forest asset really creates value over the long term, even when the world around us and the markets around the forest asset are changing all the time. The value creation of the forest is there long term. You can see starting on the bottom left of this slide in 1929, some 91 years ago, almost to the day, that SCA was formed by combining a number of forest-owning and sawmill companies. At that time, of course, the forest was the base asset. The sawmills were the main way of creating value from the forest.
Soon after, in 1932, SCA built, at the time, the world's largest sulfate pulp mill in Östrand. At that time, pulp was a very new product and a new way of creating value from the fiber, from the forest. Soon after the listing in 1950, in 1958, you can see that SCA built the first newsprint machine in Ortviken, and at that time, newsprint was a very attractive growing market. Over many years, SCA made fantastic returns on newsprint, but of course, now that market is no longer a growth market and is coming to decline and coming towards the end of its life. In 1961, SCA entered the packaging sector and invested in the Kraftliner mill in Munksund for the first time, so creating a packaging market for the wood fiber.
Further on, you can see between 1975 and then the split of SCA in 2017, SCA built up also a very large hygiene business, which has then split off three years ago and today forms the Essity company separate now from SCA. In the last box, 2020, now looking forward, of course, we're investing in a number of areas, transforming the company as Ulf presented. Looking forward, we also see energy as a very attractive market to further develop the company and further develop the value creation from the forest. Underneath, we always have a growing long-term forest asset, but we're finding different ways to create value from that asset and from the fiber that comes from it. Okay. Here you can see our capital allocation model on the right-hand side.
This is how when we look at evaluating our different projects, as we presented, we have a number of big investment projects to both grow in the growth markets of pulp, in the growth markets of Kraftliner and packaging, and to further develop in the energy segment and also grow our forest asset. We have a number of strategic investments. At the heart of our capital allocation, at the bottom, we have our forest asset, and we have, which today on the balance sheet is over SEK 70 billion in market value of that forest asset. We have 2.6 million hectares in a forest asset, and it's growing every year. We have our strategic investments, we evaluate these individually. They need to demonstrate that they create long-term return and create value for the shareholder.
If I then move to the left-hand side, you can see when we evaluate these investments and which need to then meet individual criteria for generating return, they then need to also support our financial targets. Number one here to have a stable and growing dividend. On the right-hand side, when we look at financing these investments, then we need to maintain them within our financial capacity, which is determined by our other financial target to have an investment-grade credit rating. Altogether, those financial targets ensure that we deliver the shareholder return over the long term. Here you can see this is just to give you some guidance on the investment program we have ahead of us. Here you can see the CapEx that we forecast on the right-hand side, and it's two main pieces to this CapEx.
We have, firstly, the Obbola expansion, the Kraftliner expansion, which is the largest piece. In this period, the investment period up to 2023, we have some SEK 5 billion of the Obbola investment CapEx during that period. That comes between 2021 and when we expect the new mill to start up in 2023. The other main piece is the CTMP investment, where we have SEK 1.45 billion investment to develop the CTMP mill at Ortviken, which will also be during this period and expect to start up in 2023. That's the two main strategic CapEx elements. Underneath that, we have a current CapEx, which is what we expect to spend to maintain our existing asset base.
There we have around SEK 1.2 billion per year we expect for that current CapEx level. Finally, we've been also working on the financing of this investment program, and mainly to take away and minimize and remove refinancing risk during the period. We've done this by a number of ways, but you can see on the left-hand side here, we have been issuing bonds with a long-term maturity and also entering bilateral loan arrangements, also with a long-term repayment profile, in order to push the repayment profile beyond the investment period and basically take away the refinancing risk during that investment period.
We expect soon to move a credit facility forward as well, to link our financing also with the group sustainability targets, which you'll hear more about later today, to have a green component to our financing profile as well. All in all, we've secured the financing we need for our investment program with a low cost and minimizing the risk during that period. That's all in place. All right. With that.
After that corporate perspective, we will take a closer look at the individual links of our value chain. We will, of course, start where it all begins, and that is with the forest. Jonas Mårtensson, President Forest, the floor is yours.
Okay. Thank you, Björn, good morning to you all. We manage SCA's vast forest resource to produce increasing volume of forest and an increasing sustainable yield of wood raw material. As you can see, we have succeeded. Since the 1950s, we have more than doubled the sustainable yield harvesting level that we can maintain or increase over time. The same time, we have increased the standing volume of growing and living trees, and this development will continue. We will be able to increase the harvesting level, and at the same time, the standing volume will continue to grow. This is sustainable forest management. We monitor the development of our forest resource closely. Every five to seven years, we conduct a new inventory and a new harvesting plan using both remote sensing and on-the-ground measurements.
Every new inventory have confirmed that the conditions in our forests have improved in terms of growth and standing volume. The measures behind these developments are silviculture. We become even more efficient when it comes to planting new trees and making them grow well, securing timely and efficient reforestation. We also have improved our seeds. We grow them in our own forests, and they bring about 25%-30% higher growth than natural seeds. contorta pine, also known as lodgepole pine, was introduced in Sweden by SCA in the mid-1970s after extensive research and testing. contorta pine grows on average 40% faster than our native pine. To date, we have planted contorta pine on a total area of around 300,000 hectares on SCA land, which corresponds to 15% of our total productive forest area.
Trees can also be fertilized like other plants, and this has a good effect of the soils of Northern Sweden and brings about 15% higher growth, and the effect lasts for 10-15 years. As you know, we are both FSC and PEFC certified. These are internationally recognized system for monitoring and auditing responsible forest management. Sustainable forest management, in that we combine well-growing forests with concern for other values, most importantly, preserving our forest biodiversity. In order to achieve this, we are taking a number of measures. We voluntarily set aside at least 5% of our forest area, areas with the highest nature qualities. Additionally, we managed at least 5% of our forest area with adapted methods designed to maintain or enhance specific conservation values, resulting in, among other things, that we leave at least 50% of the trees standing.
We refer to these as areas with combined goals. In all forestry activities, we also take adequate measures for biodiversity through general conservation efforts, also called retention forestry. We also conduct with the reindeer Sami communities, we adapt our harvesting and forestry to their land use. In these consultations, we discuss with them items like how and when should we plan our harvesting, which kind of site preparation method we should use, and which tree species we should plant. When we use inventory data to make a long-term harvesting plan, we place restrictions on the timber flow to even out the flow over time, but also to secure long-term supply.
We also take into the process the measures we need to take for nature conservation, the adaptations we make for reindeer herding, and other measures like I just mentioned. Taking into account these restrictions, we can optimize from the best present value, a long-term harvesting plan, here presented by tree species. As you can see, we will be able to increase our harvesting from today's level, around 4.3 million cubic meters, up to 5.4 million cubic meters by 2025. The rate will continue to rise to six million cubic meters by 2030, and will remain at this level for a longer period of time. However, we must be aware that we will conduct a new inventory and a new harvesting plan before 2030, and we will base our future plans on these more up-to-date facts and calculations.
What is it that makes this increase possible of more than 1 million cubic meter per year? Most important, we start the harvest of contorta pine. Contorta is growing faster than we have estimated, and we start to harvest contorta pine earlier than expected. We will then manage and harvest the volumes to a greater extent in difficult areas and stands. These are stands that are difficult to plan and also in some cases also difficult to harvest. It can be difficult terrain, but may also require a higher level of nature conservation measures. We can harvest the stand, but we will leave more trees. These stands cost more to harvest, but have a total cost delivered to our industry that is lower than marginal timber cost from, for example, imports. We're also developing new digital tools to find what we call hidden volumes.
For example, it can be parts of a stand that have a higher age than the rest of the forest, which is what shows in our forest register. We do not see these volumes in our registers today. By using combined data and modern technology in the form of satellite analysis, laser scanning, or even camera-equipped drones, we will be able to identify and harvest these stands. As you can see on this slide, we will have a substantial effect of the increased harvesting from our own forests. Firstly, the increased harvesting of own forest will provide a direct cash flow for the Business Area Forest. Secondly, with higher volumes from our own forest, we can minimize expensive marginal timber costs such as import. This will benefit our industry in the form of lower raw material cost.
Even if our raw material consumption will increase with our growing forest industry, we will continue to maintain high self-sufficiency rate, and it will be around 50% also after these investments are made. The amount of raw material that will come from imports will remain low, not more than 10% also for the coming years. Now I will move on to our ambition to further strengthen our integrated value chain. SCA aims to grow as a forest owner within our natural supply area and continue to increase growth for existing holdings through active forest management. We have a long-term goal to increase the area of productive forest land. The Land Acquisition Act states that in Sweden, we are not allowed to purchase forest land from private individuals without selling an equivalent area. As such, we regularly run a land sale program.
We sell land with low growth far away from our terminals or industries. Then we purchase land that have a higher growth and that is located closer to our terminals or industry. We have explicit goal to increase the area of productive forest land with 100,000 hectares during a five-year period in our natural supply area. The Baltic States, in particular Estonia and Latvia. It could also be in Lithuania and Finland. We're also open to the idea to purchase legal entities in Sweden if such objects became available at an attractive price. The goal is to purchase land with favorable or better growth conditions than land we have today in order to long-term secure the supply to our forest industry. Why is this investment being made?
As you have seen, we have a continued organic growth in our forest industry, leading to an increase in raw material consumption. Today, we have a strong integrated value chain which make us unique. As you have seen, our self-sufficiency rate are around 50% today. This creates ability to maintain competitive raw material cost over time for our industry. We have also demonstrated that we can avoid disruptions in raw material supply, even during difficult periods, such as periods of lot of snow or periods of heavy rains. Regarding forest land in the Baltic states, growth are high. As Ulf mentioned, it is between two to three times higher than in our part of Sweden. We also can see that owning forest has created stability, stable growth, and stable cash flow over time.
During years when the economic situation has been weaker for our industry, the forest had contributed with a stable cash flow. With expertise, resource, and active forest management, we have continued to increase growth. As you have seen, the rate of harvesting and the standing volume have grown substantially in our Swedish holdings. We can show that active forest management creates long-term value, both through volume growth, but also the increased land values. As you have heard, the cost of forest land in the Baltic states is currently lower than in our region of Sweden and even less for smaller objects. While prices were previously similar, fairly comparable, they have stagnated slightly in the Baltic states during the last year, and at the same time, they have continued to increase in Sweden.
One example that you can see on the left-hand side is where 900 hectares of forest land that was sold in SCA's area, and it was sold with a substantial premium as the land was sold as a legal entity. As I previously mentioned, the growth is higher, and the conclusion we take is that we can purchase land with high growth at attractive prices for the moment. So far, we have acquired 50,000 hectares of forest land in Latvia and Estonia. We are halfway through our long-term goal. In total, today, we possess around 4.8 million cubic meters in these countries. Since we started 18 months ago, we have completed four major purchases, three in Latvia, totaling a bit more than 30,000 hectares and one in Estonia of 10,000 hectares. The purchases comprise a relatively large proportion of younger forest land with high growth.
The high growth is driven by two parts. Firstly, fertile land, in principle, agricultural land that has been converted to forest land. Secondly, longer growing seasons than we have in our region of Sweden. We have consciously looked for objects that are close to good infrastructure. We operate Skulte Port, just north of Riga and Kunda Port in the south of Estonia. These are creating favorable conditions for efficient logistics for the volumes heading to our Swedish industries. As I have previously explained, our long-term goal is to acquire 100,000 hectares of forest land within our natural supply area over a five-year period, provided that the land we acquire looks similar to the land we have purchased so far. This will provide us with a standing volume of about 12 million cubic meters.
With our expected growth and forest land, we will expect a long-term harvesting level around 500,000 cubic meters per year. This will contribute to SCA Forest's cash flow and strengthen the supply of raw materials for our industries. Additionally, we will purchase between 500,000 and 1 million cubic meters locally in the Baltic markets, depending on the future needs for a growing industry. We are strengthening our integrated value chain, increasing the rate of self-sufficiency, creating the conditions for the cost-efficient and competitive supply of raw materials to our growing forest industry in Sweden. Thank you.
Thank you, Jonas. There is a very strong link between forest and forestry and our sawmill operations. The next speaker is Jerry Larsson, President of our Wood business area. Jerry, you have been busy in the U.K. lately.
Yes, I have. Thank you, Björn. Good morning, everyone. Would like to go a little bit deeper into what we have just announced earlier this week, and that is the divestment of SCA Wood Supply U.K. We've had an increased net sales from 2006 until today from approximately SEK 400 million up to SEK 1.4 billion , and we're very pleased with that. On the other hand, the share of external products has increased, and a part of that is actually not only solid wood products. As a consequence of that, the share of our internal integrated wood products that has gone into that operation has then decreased. We were at a crossroad where we had to choose between investing and developing even further or to take part of the consolidation of the market.
Due to a fairly low profitability, we have chosen to take part of the consolidation and divest. The Wood Supply U.K. together with BSW will be an even stronger distributor to the DIY and builders merchant sector in U.K., and they will continue to be a customer of SCA Wood and purchase volumes for the further processing within U.K. The divestment also give us the possibility to focus even harder on developing other parts of SCA Wood. The financial effects are that we will decrease our net sales with approximately SEK 1.4 billion. Our EBITDA level will decrease with SEK 25 million per annum, and the net debt will decrease with approximately SEK 150 million. U.K. will continue to be a core market for SCA Wood, but we will take a step back in the value chain.
We will retain our sales organization for solid wood products and to other customers or to industrial customers within U.K. We will also continue to sell, as said before, volumes to BSW as a base for their further processing. That in total would probably even mean that we will increase the sales of sawn material into the U.K. market. Leaving U.K. and going further into how we are creating value from the forest. The sawlog represents the highest revenue for the forest owners, as said earlier by Ulf, hence also the largest revenue for our large forest holdings. SCA Wood's strength to pay a strong market price for the log are therefore one of SCA's most important value creator. This strength also increases SCA's possibilities to purchase both sawlogs and pulpwood from other forest owners.
That is then a very strong and important part of SCA's fiber supply strategy that gives fibers both to our sawmills, but also to pulp and paper mills. We are Europe's largest private forest owner, and as you can see on the dark green areas on the map and the dots where we have our sawmills, they are very well situated close to each other. That is a very strong base to start with when it comes to having a low transport cost of the logs from the forest into the sawmills. You can also see that four of our sawmills are situated next to the sea, and that also gives a possibility and good preconditions for us to have low transport costs when we choose to sell to markets outside Scandinavia.
We will increase production during the coming five years, but despite that, we will have a similar or even slightly higher self-sufficiency with the supply for our own forest holdings. That is due to the increased harvesting that Jonas earlier spoke about. We would like to introduce a concept called sawmill 4.0 and how we, through digitalization, increase the value from each tree. We have, the last 10 years, made substantial investments, which has given us the possibility to do structural changes and increase the total volume. It has especially given us the possibility to increase our productivity and our cost efficiency. We've gone from 11 to five sawmills and almost tripled the volume per mill. Going forward, we will continue to increase volume with the focus on our already large mega mills in Bollsta and in Tunadal, Sundsvall.
We will work with automatization and optimization to even further increase productivity and cost efficiency. Our strongest focus, however, will be on value creation and how we can increase that through digitalization and state-of-the-art technology. I will now describe a little bit more about that. In the flow from log to customer, we have three very important functionalities. In the log yard, we put in place a CT scanner, which make a 3D visualization of every log. In the sawline, we are putting in a so-called Logeye, which identifies the log ID, but it also controls the rotation of the log into the sawline, thus maximizing the value. Downstream in the process, we have scanners that detects and controls all the properties of the sawn goods that confirms that we get the result that we have aimed for.
Going deeper into that process, the CT scanner or the X-ray scanner makes this 3D visualization, but it also creates an immense amount of data that describes the inner properties of the log. It also, with very high accuracy, describes the outer shape of the log, or actually the outer shape under bark of the log. We use this data in order to test different opportunities on how to cut the log into different types of sawn products, hence optimizing the value. We also use this data in order to create two fingerprints, one for the log and one for each individual piece within the log. Going further downstream then. We have scanners that measure all the characteristics of every piece and verify that we get the intended quality, length, and other properties of the sawn goods.
If needed, we can adjust different properties as length and quality to achieve the highest value. We also read the fingerprint of the individual piece, then we're able to reconstruct from what log and actually where in that log this piece came from. With the data of the log's inner properties and outer properties, these two types of fingerprints from the log and the piece, we are able to create a digital representation of the physical flow that we have. With knowledge and business intelligence, we're able then to optimize how we can create the most value from each log. We are also able to produce very specific products that fulfills customer needs, making us an even better supplier into different segments within the solid wood market.
On top of that, we are able to re-optimize the whole value chain in a digital environment, testing and retesting different possibilities how to divide the log. This will increase even further how we create value to our customers and for SCA. Moving outside the sawmill, actually, and we looked at other possibilities, and this is a part earlier in the value chains towards the forest. Here we can, with the knowledge we have on the value of each log, combine that to the value of each tree. We can use that information and connect that with where in the landscape this tree has grown, and also in what type of forest it has grown up. With this advanced technology, we will even further strengthen our position as a strong paying customer to a forest owner, thus creating an even higher value for SCA's large forest holdings.
We will now show you a short film that describes this process in a more visual way. That was fun, wasn't it? To sum up what this concept of sawmill 4.0 is all about, it is all about how to create value for our customers and for the shareholders of SCA. It's about how we, through volume growth and product optimization in our already large mega mills, are able to increase our efficiency. It's about securing the value of the log and increase the revenue. It's about how we, through advanced technology, can secure the value of SCA's forest holdings. Thank you.
Thank you, Jerry. Now it is time for the first Q&A session. We have received a good flow of questions from you here. Some of them are about items that will be brought up in coming presentations, they we will leave for later. This Q&A session primarily is about forests and sawmill. We have some questions there as well. For example, Jonas, Oskar Lindström wonders about our self-sufficiency rate over time. It is currently about 50%. Will this slowly increase as the forests grow and mature and your harvesting levels increase, or will the investments in the industrial operations mean higher wood consumption and thus that the self-sufficiency rate is stable or even decreasing?
As it looks today, the self-sufficiency rate will be fairly stable around 50%, even with the increase in our growing forest industry.
Yes. We have a question here about contorta pine. It is from Martin Melbye. He wonders more about the contorta economy and not the least about the usefulness of contorta as raw material for sawmilling. Jerry, will you appreciate a flow of contorta saw logs into your sawmills?
Yes, we will. We made a substantial test earlier in time. It is important to understand that we are not working with a suddenly very strange species. Contorta or lodgepole pine is a very standard international species that we will work with, and we will for sure be able to create value from the Contorta forest that we have and for the sawlogs coming out from the Contorta forest.
Good. Jonas, you mentioned higher harvesting costs when you begin to harvest more difficult to harvest stands. At the same time, you mentioned that the cost will be lower compared to imports. What will be the net effect on the costs in your Forest business? Will the average cost increase or decrease?
As I mentioned, the cost of harvesting these more difficult stands are higher than our average cost, but it's not substantially higher. Our ambition is to compensate this higher cost with the higher productivity and to be more cost efficient in the rest of our forest operations. Our ambition is to keep or even lower the harvesting cost over time.
Jerry, many companies in the industry are investing in cross-laminated timber to meet growing demand for wood construction from the building industry. Is this something which is of interest for SCA?
This product that CLT or cross-laminated timber is a very interesting product. It is the base for producing very large buildings, commercial buildings, or multi-story buildings. It's also important to note that this far in Europe, it only represent approximately 1% of the consumption of wood within Europe. The prognosis for the coming five years is that it will grow approximately to a bit less than 3%. It's still a fairly small part of the wood market. Looking into our characteristics and properties that we have in our forest and our forest holdings and the logs that we get into the sawmills, it is not a perfect fit between production of CLT and production of other products that is for construction purposes. At this point, we will watch and support the growth of CLT, but we don't have any plans to invest.
What is your current balance between construction industry, builders merchants the various segments of the huge wood market?
Well, if you combine it to building with wood, it is the world's largest consumer of a segment of wood consumption. We have a slightly less or a smaller share of wood going into building with wood. It's still the largest one. In comparison to others, we have a larger part that goes into living with wood. We have a little bit different shares between building and living with wood than others, but it's still the most important part for us.
Jonas, a question here from Robin Santavirta. Pulp wood availability is quite good at the moment. How do you see the pulp wood supply and demand balance in the Swedish market over the long term?
As we can see in our own forest, we have a strong growth and we expect that we will have a good balance in Sweden as well. Even though, as I mentioned, we will also from time to time import pulp logs from the Baltic States. As we see it today, we have a fairly stable and market in good balance .
Jerry, you have just left the wood supply market in U.K. What's your view on the Scandinavian market for builders merchants for supply?
As I described when talked about leaving Supply U.K., we have seen a very low share of internal flow from our sawmills into our Supply U.K. operations. That is a very big difference when it comes to Supply Scandinavia, where our internal share of wood coming from the sawmills through the Supply Scandinavian operations is much, much higher. It's in the region of 90%. When we talk about U.K., it was a region, well, much, much lower than that, even less than 15% of the turnover. For our Supply Scandinavian operation, it is still a very important part for us, and we will continue to develop that.
Thank you. Jonas, there is a significant price difference between forest land in southern Sweden and in northern Sweden. What do you expect from the development? Will that gap remain or will it decrease or what?
It will be interesting to follow the development. We have seen that the price of forest land have increased for more than 50 years. We think that it will continue to increase. If it will increase more or less in the south or north of Sweden, it's not easy to say, but we will see a stable increase over time. Of course, in south of Sweden you have a higher growth, in the same way as you have a higher growth in the Baltic States, which of course drives the price. We also see a large interest of forest land in our part of Sweden, and we see many forest owners from the south of Sweden that is now actually investing in forest land in north of Sweden. We think we will have a good development in this part of Sweden.
If you broaden the scope even further and look at the market for forest land in Finland, in the Baltic states and so on?
As I said, we have seen a long period of increased land value. We really believe into owning forests, we think that the forest values will continue to increase over time. Of course, there will be difference between different areas in the Nordic countries and in Europe. In all, overall, we will have a good development. That is our view.
We did see in your presentation, Jonas, that both the harvesting levels and the standing timber volume will increase over time with the harvesting and forest management plan that you have put in place. What are the opportunities for shifting this? Could you, by deciding not to increase the standing volume as much, increase the fellings in the short term?
Of course, we can always harvest more during a shorter period of time, but as I also mentioned, our aim is to also have a long-term supply for our industry in Sweden. We want to have, or maintain or slightly increase the harvesting level over the long run. Of course, shortly you can harvest more, create a stronger cash flow, but then you will have a setback in the future.
Thank you. Back to the price of forest again here, we have a question from Cole Hathorn. On slide 29, someone is keeping tabs obviously, you show the forest value in euro per hectare by region in Sweden. You called out a recent transaction that is at a materially higher price. What is driving this price value disconnect? Does that mean that the northern Sweden value estimates need to move higher and that the euro per hectare price data is no longer appropriate or outdated?
As I mentioned, this piece of land was sold as a legal entity. We can see that when legal entities come out in the market, they have a substantially higher price than when you buy from private forest owners. Whether this will drive the price or not, we will see. Of course, this was maybe a record high level in our area. As you saw, as I said, this was forest land as a legal entity. There is a huge interest for that right now, also in our part of Sweden.
Thank you. We have another question from Cole Hathorn here. Wood products has a good opportunity to replace concrete and steel over the longer term given the CO2 carbon dioxide benefits, possibly accelerated by the European Green Deal. I can mention that we've had some more questions about that, and we will come back on that on the sustainability item. Jerry, can you talk about some of the legislative regulatory development that support growth over the medium term?
Well, a lot of people now start to recognize that using wood and wood products in different applications is one of the solutions for our climate challenge that we have. There are regulations put in place that are favorable for using our climate friendly material, there are also regulations that I'm a bit worried about when it comes to limiting the possibilities to actually harvest wood and use that for different purposes among others than solid wood products. There is regulations that are going both ways, I would say.
On top of regulations, you have also some public opinion support. There are some quite high profile projects in Sweden and elsewhere.
Yes, that's very good and I hope that puts the light on the fact that using wood and replacing other materials such as steel and concrete is a very climate-friendly activities that needs to be done. When these kind of high profile projects are seen in the media, it is a very positive thing for us and I really hope that we can continue to
To keep the interest in how to build more and better with wood.
Yes. Thank you. We will come back to the climate effects and benefits of forests and forest products later in the presentations here. Right now, we will have a break. We will reconvene again at 10:00 A.M. now. I hope all of you who participates via web link here can have the opportunity to have a cup of coffee or something and sharpen your pens, write more questions, and we will try to manage them in the coming two question-and-answers sessions.
Thanks for the first session. See you again at 10:00 A.M. Hello again. I hope the coffee was good. It certainly was at this end. We have a steady flow of questions coming in, and that is good. I just want to put your attention to the question box below the presentation. St ate your name and your question, and we will try to deal with them. We will now continue our journey along our value chain with the Paper business. Let me introduce Mats Nordlander, President, Paper.
Thank you, Björn. I'm happy to be here to present Paper, our strategy, our transformation, and our big expansion project in Obbola. Our strategy has been very transparent and clear since we formed the new SCA back in 2017. We choose to run our publication paper business based on maximizing cash flow. We decided to invest in our Kraftliner business to create growth. We have executed one of the investments, our investment in Munksund, to increase our share of white top products, not so much a volume-driven investment, but rather a value-driven investment. We are in the progress of implementing our huge investment in Obbola, investing primarily in a new 725,000 ton new Kraftliner machine. We are in the final phases of executing the closure of our publication paper business.
The drivers behind us deciding for a growth agenda for our Kraftliner business is very much driven by favorable long-term growth trends. I will walk you through some of these conclusions that we have had. The Containerboard business is a huge business. It's, in fact, the biggest paper business of its kind. It represents globally 160 million tons. If we look on the long-term trend of growth, it has been very stable, and it has been on a level of 3% annually. It has been resilient throughout quite a number of shocks in the market. The most important historic shock was the financial crisis in 2008 and 2009, where we saw a huge GDP drop in our societies in the world, where the Kraftliner market had a V-shaped fast drop, but also a fast return back to the historic trend line.
Now we have been living through quite some time of a pandemic globally. We expected when we walked into this pandemic period that we would see the same development based on almost the same drop in GDP. The reality has shown that containerboard has been very resilient during this period of time. I will try to explain some of the conclusions that we have made on this, why it has been more resilient. When we presented the big expansion project of Obbola, we said that the, and it's still a fact, that the long-term trend of growth is very much driven by the industrial production, the development of industrial production, and the link to consumer spending. These are the two most important factors affecting the growth of containerboard and Kraftliner.
We also indicated that we saw structural shifts that could possess an upside potential going forward. We pointed out three important factors long-term that we saw. The shift into e-commerce, the changes that we see in the retail sector, and the drive for more sustainable packaging. We also said that we had not included these structural upside potentials in our investment planning, but they were there. During this pandemic, we have seen at least one of them being implemented fast and creating a structural shift in the way we as consumers are acting. Before the pandemic, we had a view of 2020 to be a moderate year. Consumer spending is to be increasing with 1%, industrial production to be flat during the year, creating a growth of containerboard of 2%.
In the beginning of the pandemic period, we saw initially and could calculate the effects that we could foresee in the consumer spending into industrial production and into containerboard demand. We and other forecasters were forecasting a drop of consumer spending of 10%, a drop of 50% in industrial production, leading to a drop in containerboard of 5% this year. This was back in May. When we have more visibility, and doing the same forecast in October, we can estimate this year that the consumer spending would be a decline of 9%, the industrial production around 8%. Containerboard would still be in a growth phase. We estimate containerboard to grow in Europe around 1% this year. That is surprisingly positive for us, I would say for the market. Why is this?
First of all, we must remember that many countries have implemented a lot of actions to help the consumers during the pandemic period. That is something that we see also here. The most important factor affecting this development is e-commerce. The shopping of consumers has transformed and shifted from traditional retail shopping malls into e-commerce, driving a higher share of packaging material being used. That means that the upside potential we saw when we presented our big expansion project has happened. We are seeing a structural shift happening now in consumer behavior. It has also, of course, helped during this period of time that the consumer spending, although it is a decline, has shifted from services to goods. People have stopped traveling, hotel nights, restaurant visits, but they have not stopped shopping so much.
That has helped, of course, both industrial production and them shifting over to the e-commerce channel have helped the containerboard demand. We can see it in Europe, but we can see it globally as well, perhaps even on a higher share than what we see in Europe. We believe that this is here to stay. It's a structural change, and we believe that quite few consumers will go back to traditional shopping after the pandemic period. Looking into this more on a trend line and perhaps on a shorter perspective, we can see this year that we are having a steady growth. We had a V-shaped dip during the year. It was very short. It was in the middle of the summer, and I would say it was driven mostly by supply chain effects and moves in the supply chain.
Looking at the trend, it's positive, both in terms of containerboard demand, but also of box demand, and I think this is very important. Now looking into the inventory positions, they are below average level, and currently, they are having a negative trend, not only driven by the market, but also by maintenance stoppages moved from the spring to the autumn. The situation is quite favorable and positive at the moment. Based on this, we decided to invest in profitable growth and to invest in Obbola. It's a huge investment, and I will repeat some of the fundamentals of that investment that we took again. A beautiful film showing the progress in October on our mill site, and we will, of course, come with more update along the years here. Back to the fundamentals of the investment.
We are primarily building a 725,000 ton paper machine, making low to medium high grammages. It's a SEK 7.5 billion investment. What is quite unique with this investment is that we can have parallel startups with the existing paper machine, creating no gap in between and a steady flow of containerboard out of the mill. We will have a very short period of time where we are stopping the total production at Obbola. This is also ensuring that we have a continuous cash flow out of the operation. As you can see, we have here indicating that we will be producing slightly more 2023 than we did the year before in the mill. I'm also happy to report or to inform you that the project is progressing on time plan and on budget. We are very confident about the project so far.
Going back to some of the fundamentals of this investment. We are doing it to strengthen our already market leading position here. We are Europe's biggest independent producer of Kraftliner today, and this will be meaning, at least in the short term, a somewhat increased market share. Due to the size and the uniqueness of this investment, we will also improve our cost position. You can look on the graph to the right where we have plotted the investment of the Kraftliner machines since 2000 globally. It's Europe in white, it's U.S., and other destinations. If we then concentrate on the whites in Europe, you can see the 725,000 ton Kraftliner machine that we are investing in is taking a almost unique position globally of the new machines. That also means that we are creating a very competitive cost position.
Size is important if you can manage the process of the size, and in terms of width, it's exactly the same width of this paper machine as we are currently operating in Obbola, which we can manage very good today. Going from the size that we have today of 450,000 tons approximately, we are significantly lowering the indirect cost per ton of this machine. We're also building it on the best available technology with future development potential. This, in combination with our 60 years of experience of doing Kraftliner, will ensure our customers the best possible products going forward. We're also investing, I believe, in a good business. We are today in here presenting the performance of our Containerboard business historically and for the last 12 months.
As you can see, the Containerboard business here has been generating around SEK 4.5 billion-SEK 5 billion of revenues, and the EBITDA margin has been varying around 25%-38%, depending on the pricing situation of the market primarily. For the last 12 months, we have been north of 20% EBITDA margin, also giving this business quite a good position. We believe investing in a good business with future development potential. As a result of us exiting the publication paper business, we have also announced that we are changing the name of the business area from Paper to Containerboard, symbolizing our focus now on containerboard going forward. We are confident that the investment in Obbola will drive profitable growth.
It not only secures the current operation we have, but we have been indicating that it will add another 0.8 to SEK 1 billion of EBITDA based on a trend price of EUR 600 a ton. Repeating my messages of today, it is favorable trends that drives the long-term growth of containerboard and Kraftliner. The favorable trends, they have been strengthened during the pandemic period. We are investing in a profitable business and in profitable growth. We are confident of the project currently. It's on time and it's on budget, we are exiting publication paper, a low growth or a declining market where we could exit it now and add value for the company. Thank you.
Thank you, Mats. You will shortly have the opportunity to answer questions. We will now move on along our value chain to the next link, which is our pulp operation. Let me introduce Kristina Enander, President Pulp.
Thank you, Björn. In my presentation, I will cover three different areas, namely the ramp-up curve for Östrand. I will give you a short market overview, and finally, I will tell you about our CTMP expansion. Very first, I will give you an overview of our products, NBSK and CTMP. NBSK is Northern Bleached Softwood Kraft Pulp, and that is by far our largest product in Östrand. The production capacity is 900,000 tons, and in the process, the wood is cooked in caustic white liquor, and this results in long fibers, which obtains a high strength in the end product. Since the lignin is removed from the pulp, it is possible to bleach the pulp up to very high brightnesses. The yield is quite low. It's only about 50% to compare with the yield for mechanical pulps.
The process results in an energy surplus in the form of electricity. You can say that the wood become to extent of 50% to pulp and 50% becomes energy in the form of electricity. We have CTMP, Chemi-thermomechanical Pulp. The production capacity in Östrand is today 100,000 tons. In this process, the fibers are physically torn from each other, and this results in a pulp with shorter fibers, which gives stiffness and bulk in the end products. Here, the yield is very high. It's about 90%, but since the lignin is retained in the pulp, it's not so possible to bleach it up to very high brightnesses. In Östrand, we use both softwood and hardwood as a fiber base. Some words about the ramp-up curve for Östrand.
As you know, we have invested almost SEK 8 billion in a new NBSK plant in Östrand. It is a state-of-the-art plant regarding production capacity and efficiency, energy efficiency, and also quality. We started up this line during mid-summer 2018. Since then, we have successfully trimmed the line according to the project prerequisites. Yes. As you know, it is two steps ahead and one back, and that is what you have to count on in a project. In October this year, during the annual shutdown in the mill, we made the complementary efforts to reach the last step up to 900,000 tons. Now, the situation in the mill is very stable, and we are definitely approaching the target now.
As you can see to the right here, you have a competitor comparison regarding cash cost. With this high production level, we are now placed in the first quartile regarding cost position. It is exactly what we said in the project. We also think that there is a further potential to reduce cash costs in Östrand. To the left in this curve, you can see it is dominated by Russian mills. They have lower fiber costs, but also another product value and other market destinations. Okay, let's go over to the market situation. Pulp sales is global. For us global means U.S., Europe, and Asia. We focus on strong relationships in Europe and U.S. since these markets are growing, they are stable, and they are profitable over time.
The demand of softwood is growing, and during the last 10 years, the demand for softwood has increased by 2% per year as average. In March, the world was hit by the pandemic, and this pandemic and the COVID has strongly and rapidly affected the demand in different end segments. The demand in printing and writing has decreased dramatically, and that has been compensated by a higher demand within the tissue and the board packaging segments. As you can see at the right, we have increased our share within the tissue segment, and we are now well above the average for the market. Our slender northern fiber is a perfect fit for the tissue market, so it's very good to have a high share in tissue, and it is to prefer since it is a growing market and it has a better profitability than printing and writing.
Looking forward, we see that the lost demand in printing and writing will remain, and we also see a growing tissue market by about 3%-4% annually. The pulp market is to a large extent a commodity market, but actually, the quality demands differ a lot, especially within the niche markets. There is a potential to develop products for higher margins. Here we actually plan to develop products for premium pulp segments. Our setup here is to modify the fibers or the pulp in the end of the process without affecting the production efficiency in the mill. We are working in four points here. The first one is we are working with higher strength in the pulp, targeting the tissue and the specialty paper segments.
The other one is we are working for higher wet strength in the fiber, also for the tissue and the specialty paper segments. The third one is filter application. Here we work with the higher porosity products. The last one is custom-made grades. Here I can give you CTMP as an example, and I will come back to that shortly. As announced in August, an investment of SEK 1.45 billion is decided in a new CTMP plant in Ortviken. With this investment, we will increase the production from 100,000 tons up to 300,000 tons. Before I go into details about the project, I will sum up the gains as follows. We really think that this is a strong project. We have already today a profitable CTMP business, and now we will expand it further.
Using existing equipment, we will have a low investment cost, and with this state-of-the-art equipment, it will be very competitive up and running. We will get a broader product portfolio, and then we can give even more attractive offer to our customers. In our market plan, we'll see later that we will grow with our customers, but also focus on the board segments. The CTMP plant in Östrand, it is old and there are needs for investments, but it has been and is profitable over time, and we have a broad and good product portfolio based on both hardwood and softwood. Here I want to mention our totally unique birch CTMP. That product is more bulky than other products, and that provides stiffness and bulk in the end products. That has very particularly interesting properties for the board segment for CTMP.
With this investment, we will increase the production from 100 to 300,000 tons of CTMP, moving the production from Östrand to Ortviken. We will also add SEK 300 million to the EBITDA. With this project, we will also open up for a further expansion of the NBSK production in Östrand. It is very important for us to secure the deliveries to our customers, of course. We plan to continue to run the plant in Östrand until the production capacity in Ortviken has reached 100,000 tons. Generally, and luckily, there is a less complicated process, and it is a faster process to start up a CTMP plant than an NBSK plant. Already within three months, we plan to stop the CTMP mill in Östrand. Then we will reach full capacity within two years.
In 2009, we invested SEK 800 million in a new TMP plant in Ortviken. That was a state-of-the-art plant, and now when the paper machines will be stopped, we can use this equipment in the new CTMP plant, which will give a low investment cost. This line also includes a peroxide bleaching line with world-class chemical consumption figures. All in all, this will of course then give low investment cost, low about SEK 5,000 per ton. To compare, for a greenfield CTMP plant, maybe SEK 15,000 per ton. Up and running, we will be very cost efficient. This will place us in the top quartile regarding cost position among the European and American CTMP producers. It is a common opinion that CTMP is only attractive as a cost cutter, since CTMP is cheaper than, for example, NBSK.
This is true to some extent. As a matter of fact, the customers have realized that there are quality advantages with the CTMP. In all the segments listed here, you can find quality advantages with the CTMP. Here I once again want to mention our birch CTMP, which is bulky, very good for stiffness and bulk in the end products. That is very good for the board products. The board is expanding, or it's a very growing part in Asia, and we are looking forward to coming into that part. We have a look at the market plan for CTMP. Today, we sell all of our CTMP to Europe. In the market plan, we plan to double the sales to Europe, but we will also sell a considerable part to Asia, because that is a very interesting market for us.
Also U.S. interesting for us, especially among our existing customers. Two third of our production will go to existing or former customers within the NBSK or CTMP. This is not taken from the heaven. It's fully realistic. We have made a thorough investigation, research about this, and also we have, of course, interviewed our customers. The rest, of course, will go to new customers. We will decrease the exposure to the printing segment and strongly increase the exposure to the board segment, both in Europe and Asia, since it's a growing segment in China. To sum up the CTMP investment, this project is a perfect fit in the SCA strategy. We make use of the hardwood in the company.
It opens up for further expansion in Östrand, and it is a profitable business that we now will develop further. We focus on the board segment in China or Asia and also in Europe. The project is very efficient since we can use existing equipment that will give a low investment cost and low cash cost up and running. We will start up early 2023. Just to sum up and repeat my message today. About the NBSK, the Östrand ramp-up is on track. There is a growing tissue market, and we have an increased share in the tissue segment. The new CTMP plant project is running, and we will start up in early 2023. Thank you.
Thank you, Kristina. We will now open up for a question-and-answers session, focusing on paper and on pulp. Then we will continue with other items until we have a broader Q&A session at the end of this Capital Market Day. The first question is from Johannes Grunselius, and it's about containerboard. How do you see the supply growth for the coming years? What kind of market operating rate is realistic in the market for the near future? How competitive is SCA on containerboard versus European industry? Is it possible to indicate where SCA is on the cash cost curve? Mats, that's yours.
Yes. First of all, thank you, it's a very good question. On the supply growth, of course, you have to look on both demand growth and supply growth here. We have been looking into this, and we are doing various forecasts ourselves around it. It's not so easy as at just looking at the demand growth and supply growth. You have to estimate also the export and import in order to get the right balance here. What is often overseen when you're doing these estimations is for new capacity and the ramp-up curves, they are very important to consider. Normally, when various consultants are doing this, they are putting in the end volume in the first year, and that, of course, makes it as a shock to the market.
Normally, a ramp-up curve of new capacity, it would take two to three years to achieve the designed capacity. Based on this, I would say that what we see today is the demand growth being somewhat more optimistic than what we estimated in the past. We have reasons to believe that the imports will be somewhat less than what it has been historically, at least from what we can see from demand in North America today. There is almost a lack of capacity in North America, and the profitability of supplying domestically is higher than exporting. Then we are having the new capacity coming on stream. There, if I concentrate on the Kraftliner market here, we are plugging in the ramp-up curves that we believe in. I would still say that we are going to see utilization rates above 90% in Kraftliner.
I'm fairly optimistic here, but we have to remember that it's sensitive to all these factors. A 1% change in growth means 1% of utilization rate, 100,000 tons of more or less exports or imports means 2% of utilization rate. Balancing all, I would say the outlook is fairly optimistic, but of course, with challenges also in the short term. When it comes to the competitive position, I must say, I indicated it in the presentation of the size of the paper machine that we are building. I would say, I would go back in combining the historic and current profitability that we were showing based on the current paper machine, which is the biggest in Europe.
Obviously, we are competitive today looking at the margins that we are creating in EBITDA, and we have been indicating also an additional SEK 800 million to SEK 1 billion with the new paper machine. From European producers, we are going to build, if not the most, one of the most competitive Kraftliner machines in Europe. There are, however, Kraftliner machines in Russia, where you could see a lower cash cost. They are primarily located close to Siberia or close to China. You would produce a lower cash cost if you're located in Latin America. The impact of these assets into Europe is not that significant today. Out of the European assets, we believe we will have, after the investment, the most competitive Kraftliner machine.
Thank you. Kristina, we have a question here from Oskar Lindström. You say that the situation now in the Östrand mill is very stable, and you're approaching the target in terms of volume. To what extent have you reached the potential in terms of cost of production, disregarding variety in electricity and wood prices?
Regarding chemical consumptions, we are on track according to the project prerequisites. We are working with suppliers all the time, and that is an ongoing work, and we will never stop that. We are on target, but we will be even better.
Thank you. Mats, your reasoning on e-commerce has triggered a number of questions here from Robin Santavirta, Linus Larsson, Mikael Doepel , and more. What is the share of European containerboard markets that can be linked to e-commerce, and what's the split between recycled and virgin-based containerboard in e-commerce? Is e-commerce favoring growth more in either of these segments?
Thank you for the question. It is a very complicated question to answer.
Try to be brief.
To start with, there has been various studies that have been done. To simplify it a little bit, most of the studies are indicating that the e-commerce channel is today consuming 30% more packaging material than corresponding retail channels. We believe from our perspective that 30% more packaging material is not sustainable long term because there will be forces now working to reduce the amount of packaging materials that is needed in the e-commerce channels. There is going to be product development of packaging designs, and so on. There is clearly more, and it's 30%. What is the latest update of the share of e-commerce versus retail?
I don't have the numbers today, but they are, as we know, clearly higher during the pandemic period than what it was before. In total sales before the pandemic period, we were talking about 10% of consumer goods being purchased in the e-commerce channels, and clearly higher now. It's a complicated question to answer precisely, and we are working on it constantly to understand it even better. We have seen the effects now during the pandemic period and during this year, clearly.
Thank you. Kristina, we have heard now about the opportunities that will come from this continuing CTMP at Östrand. Where are you in your plans, and what sort of preparations? What will you be able to do when you have the space at Östrand?
Yes, we have initiated a feasibility study to further increase the production of kraft pulp in Östrand. It is a big market with big opportunities and with a high share in the tissue segment. We see a great potential in growing in the NBSK part.
Okay. Yeah, we look forward to hearing more about that, but it's sometime in the future. We have a question here from Martin Melbye to Mats. Can you expand upon the economics of purpose-built containerboard mills compared with an old paper mill that has been converted into a containerboard? There are some large conversion projects on the horizon. Can you expand upon what you can do when you do what you set out to do instead of just shifting?
Yes. Lots of ifs and buts in that answer. To simplify it, if you're converting, and I'm now concentrating on the paper machine because I assume when you're doing a conversion, you are having already a kraft pulp mill before the paper machine, because that's a prerequisite. You can't buy pulp and make Kraftliner out of that. You need a kraft. When you're having a paper machine that you're converting, typically what you cannot redesign is the width of the paper machine, and that's the most important factor for, I would say, one of the most important factors for the competitiveness going forward. The customers that we are serving are having corrugating machines, and 95% of all Kraftliner is being used in the corrugating sector.
The corrugators using the machines, they are fairly standardized. There are not too many widths of the reels that we are supplying. That means that the width of the paper machine must fit to the customer specifications of width. Otherwise, the utilization rate of the width is going to be low. In a perfect world, you would wish when you're converting that you can kind of adjust the width to fit to the containerboard world, but you have a handicap that you are stuck with the width. That's the most important. The other things in a paper machine can be adjusted with capital.
You can add more or less capital to build a purpose-built containerboard machine. Of course, if you're doing it too much, the capital spent of building is not going to be worth it. Typically you have to compromise on the technical capabilities after the rebuild, or the speed, or the drying capacity of that. You have to make compromises, that's for sure. On the plus side is the total capital spent there. You have to adjust this, but from a cash cost position after the investment, you cannot compromise the width of the paper machine.
Thank you. We'll move on now. Energy has always been a key component of the forest industry, and it is also a growing business. We have moved from being a huge energy user to be an energy producer, and we are now more and more becoming an energy supplier. Mikael Kjellgren, President of Renewable Energy, please enlighten us about the future of renewable energy.
Thank you, Björn. Hi, everybody. I'm here today to give you an update since the 2018 Capital Market Day. I would like to start with a short introduction and a recap. In the light of the Paris Agreement, we see two rapidly growing markets, and those market has clear connection to our value chain and our strategy. First, wind power. Wind power has undergone an economic transformation recently years, mainly driven by lowering the levelized cost of energy by increased production. When I started working at SCA in 2015, one wind turbine produced about seven GWh annually. Today, when we look at future projects, that number is above 20. The second is biofuels. We now see EU legislation being implemented on national level. 65 countries all over the world have some kind of incentive system for blending in biofuels, and the demand is increasing each year.
SCA is already today a big player within renewables, mainly through bioenergy. We produce a lot of wood pellets, other solid wood fuels. We produce heat, steam, and electricity. Did you know that if we sum up our power production from all our pulp and paper mills, that amounts to 1.5 TWh annually, that is 1% of the Swedish power demand. For us, these growing markets is a perfect match with our strategy and our integrated value chain. From an already strong position created, we have the potential of further growth within these markets, at the same time contributing to a sustainable society. We are now working towards two lighthouses in these markets. First, 11 TWh of wind power on our land, that should be seen as a firm target.
11 TWh is equivalent with an electrification of all the cars in Sweden. The second should be seen as a long-term potential, and I'll come back to that later. 300 cubic meters of liquid biofuels is the same amount, if you translate it to jet fuel, that is needed in domestic aviation in Sweden. From a strategy point of view, we know that wind power will increase the value of the land, and we know that biofuels will increase the value of the forest and each tree. Let's go into the details, starting with wind power. Swedish power production and distribution is facing challenges now and moving forward. That is at the same time that we have a direction of decreasing the use of nuclear power.
If you look to the right, you can see the chart that is a result of a work been done by the Swedish Energy Agency. I would like to highlight two key takeaways in that graph. First, the increase in power demand. They predict an increased power demand in Sweden. Secondly, and the most important one is regardless of scenario, they see wind power as a major part of the solution moving forward towards 2040. For us, that is growth opportunities, and at the same time, we can be a part of the solution towards a fossil-free world. How are we doing? Sorry. As you all know, our business model is mainly leasing out land to investors and potential investors. Back in the 2018 Capital Market Day, we were striving towards the first target of reaching five TWh of wind power on our land.
Not only did we reach that target, as Ulf mentioned, we also secured additionally four TWh of wind power on our land. By now, as of today, we know that by the end of 2023, we will reach nine TWh of wind power on our land. Now we're striving towards 11. However, there are some minor clouds in the sky, even for wind power. As you all know, we have a contradiction here. On national level, we are striving towards more and more wind power, but the condition and rules on getting permits in place with the conflict of interest and stakeholders, the veto right of the municipalities is making it harder and harder to get these approvals. That's why we don't want to leave anything a chance, and therefore, we have entered into two separate development agreements with OX2 and Eolus.
Those companies are two of the biggest developers in Sweden. We will join forces now with them to develop new wind power projects on our land towards and beyond 11 TWh. The reason for this is to not only will we secure reaching the target of 11, we also see increased project values moving from the beginning towards financial close, and our strategy now is also taking part of those values created. To sum things up, wind power is delivering on targets, and the future looks really bright, minus some minor clouds in the sky. Do we also have progress in biofuels? Let me start with the market update, and we move from the left to the right. The global agreements on climate change is in place. The Renewable Energy Directive on EU level is now being implemented in the member states.
You can see in the middle graph an example for the quota obligation proposal in Sweden. Blending in biofuel have to go up from 25% in 2021 towards 60% by the end of 2030. I would like to highlight the third point to the left, advanced biofuels. There are, within EU, separate targets on advanced biofuels, and the approved feedstocks for those biofuels are listed in Annex IX-A, and the SCA feedstock coming out of our value chain is listed in that Annex IX-A, and that puts us in a really good position. The importance of biofuels moving forward making a sustainable transportation sector is huge. In the chart to the right, you can see the International Energy Agency analyses on what needs to be done in order to reach the two-degree target on temperature rise on Earth.
As you can see, biofuel plays an important role in that journey. They predict that we have to increase our use of biofuels from today's 105 TWh beyond 5,000 TWh of biofuels by the year 2050. That is a big journey to make. I would like to take a short break here and make an analogy from our business. Bear with me. I'd like to give you some insights on this sustainability dilemma on transportation from a different perspective. If you imagine the round log, Jerry showed you a really nice video, round log going into that sawmill. Jerry explained that with new technology, they are trying to maximize that value. No matter how hard they try, they will always get lower valued byproducts. They will always get sawdust, bark, wood chip shaving coming out of that sawmill.
The oil refineries of the world are in a similar situation. Let me show you a picture, and imagine that round log going into a refinery as crude oil down to the left. The refineries will produce multiple products coming out of that refinery with different yield gaps. They will get gas, gasoline, diesel, jet fuel, et cetera. Let's say if the demand of gasoline goes down, but the demand of jet is still there, you won't change the throughput of fossil crude oil in the refinery. You have to keep the pace. From a sustainability point of view, that is a challenge. If you combine that with the graph to the right, which is data from the International Energy Agency on fuel consumption in the world, you can see the growth since 1918 until 2015.
One major driver in that is the jet fuel. We fly more now than we used to, taking away the pandemic situation right now. That is a fact. Making a sustainable transportation sector for us, it's like putting together a piece of puzzle. You have electrification of car. That's a really important piece of puzzle. You have power to X, you have hydrogen, but you also have biofuels. The beauty with biofuels is that you actually can lower the top line of the fossil crude being produced. Instead of putting in that crude fossil oil to the left, you blend in a green one, and then you get all this variety of green biofuels, including biojet. I don't know if I made it through, but for me, this is really important to understand because it gives you insights of the complexity of this problem.
We can not only work with one part, and biofuel plays a big role. You have heard during the day that SCA invest in growing markets and integrated value chain. For biofuels, we have the feedstock, we have part of the utilities, and we have part of the infrastructure. We recognize the growth opportunity, and we know that if and when we succeed, we will increase the value of each tree. At the same time, we will contribute to a fossil-free world. What has happened at SCA in biofuels since the 2018 Capital Markets Day? We have been working with three potential feedstocks on three tracks and with different technology maturity. We have done so on two locations. The first one in Gothenburg and the second two at Östrand, next to Östrand pulp mill.
If I start on the top, the progress cooperating with St1 is going according to plan. We are aiming for 100,000 cubic meters of fuel production, and we are now in a pre-project phase. We're aiming for closing that pre-project phase by the end of this year. The technology we're looking at is commercial. I'll leave it at that for now. The other two tracks are located in the same place. It's two biorefinery lines next to the Östrand pulp mill, one with solid biomass converted to biofuels such as advanced biofuels and biojet. The second is black liquor and lignin towards biofuels. I'm glad to say, and Ulf mentioned it, that we now have got a first instant permit granted. We have also the zoning plan in place, and we also have the right for land reclamation.
Back some years ago, we took a strategic decision. Okay, these technologies are not commercially ready yet. Are we waiting for it and put everything in a line, then this will take forever. Instead of waiting, we said, "Okay, let's do what we can and start the permitting process and pre-design of these refineries while the technology is mature, going from pilot, demo, to commercial scale." Today, the technology around solid biomass is on demo scale level. As of today, we can't say when this will be ready for commercial. I can assure you we are doing everything we can, evaluating different technologies and working together with these technology suppliers to make this go faster. Regarding black liquor and lignin, we didn't find an external technology supplier that had an interesting process suited for us. We decided some years ago to develop our own.
Now we are evaluating three successful pilot scale years, not without challenges, but still successful. We have to decide, once the evaluation is done, how to progress from there. We are moving forward. That is the main message. The first one with St1 is commercial technology, and the two others are a long-term potential. If I would sum things up around biofuels, our progress is good. The biorefineries at Östrand is a long-term potential, and this is due to technology maturity. If and when we succeed, I can assure you that Jerry does not have to worry about putting value on the bark, sawdust, wood chips, shavings coming out of that saw log and process. Thank you.
Thank you, Mikael. Sustainability is integrated in everything we do at SCA, to the point where we do not have one sustainability director, but two sustainability directors. Please let me introduce Katarina Kolar, who is moving from sustainability into business improvement and business control, and her successor, Hans Jordberg. Please.
Thank you, Björn. On this slide, you see SCA Sustainability Platform. It was formulated in 2017, we have developed it, we launched it and communicated in early 2019. The Sustainability Platform describes the way we work with sustainability and is integrated into everything we do and in our business model. When we developed the Sustainability Platform, it is based on our material assessment, it takes all the three aspects of sustainability into account: economic, environmental, and social. We have also been inspired and also influenced by the 17 goals that United Nations developed and launched to describe the way to sustainability development. I will just go through very slightly the Sustainability Platform. In the foundation, we have our values. That's our core values, respect, responsibility, and excellence. That guides us when we interact with our different stakeholders, also the way we do business.
The second component in our platform is profitable growth. Profitable growth is an important part in delivering sustainability. We've been around for many years, as you saw in the timeline that Toby showed earlier, and we have the intention to be here for many years ahead. We need to deliver sustainability development and also profitable growth in order to be relevant also in the future. On the top, we have our four focus areas. That's Fossil-free World, Valuable Forest, Efficient Use of Resources, and Responsibility for People and the Community. The Fossil-free World describes our contribution to mitigating climate change, and you heard about that earlier, both through Mikael just recently and also earlier through Ulf's presentation. The second, Valuable Forest. Our value creation starts with the forest.
In order to do that, we need to rely on responsible forest management, both in our own forest but also from the forest we buy and procure from other forest owners. Efficient use of resources is crucial in order to deliver sustainable development, but also from a profitability perspective. In this sense, we need to even further increase our own circularity and use the resources the most efficient way we can. Taking responsibility for people and the community is also crucial in order to attract and retain the best employees, but also to contribute to prosperous local societies where people want to live. As you can see from the slide, we also have mapped all the 17 goals, the SDG goals, and you can see that we contribute to all of them, either directly or indirectly.
Going forward, now we have the sustainability platform online, to give it even more materiality, we have now formed and defined six group sustainability targets. The targets will give a clear direction and have a long perspective, will make the sustainability platform to action. The goals are increase our climate benefit to 15 million tons from the 10 we have today. 100% or all of the wood raw material that we use in our products will come from responsible managed forests. We will increase our efforts to really reach zero waste. That means that nothing will go to waste. We are almost already there, we have more to do, we can use our streams in better and more efficient ways.
We need to have an accident-free and healthy SCA, and we want to deliver a leading total shareholder return to our shareholders. Finally, all employees are to follow SCA's code of conduct. As I said, all these targets have a long-term perspective, and then horizon to 2030. Now we will track our progress against these targets and also report on how we progress. How will we then work with these and achieve results? Starting with the foundation with our values. As I've said, the overall target is that all our employees are to follow SCA's code of conduct. This we will work with in three ways. We will have a living code of conduct throughout all and whole of our organization through education and also that we follow that we have no breaches.
We will have a sustainable supply chain, meaning that we will do business with suppliers that share our values and also commit to our sustainability and supplier code. The third part is that we will have a robust follow-up. That will be that we have an open-minded climate that we report if we see something that is wrong, but also that we do risk-based assessments on site. Moving to profitable growth. As I said, our overall target is to deliver a leading total shareholder return. You have seen several examples today on how we deliver on our strategy for sustainable and profitable growth. We will also have value creation. That you can measure through a stable and growing dividend. We also need to have financial stability, and that we will measure through investment grade credit rating.
Moving to a fossil-free world, our target, and I think you've heard it several times today, is that we will increase our climate benefit from 10 to 15 million tons per year. This is measured through the model that Ulf described earlier today. We have the three important components, our forest, our renewable products, and the emission in our value chain. When we look into the forest, we work and do what we can to increase the capture of carbon dioxide in our forests. As you know, just want to remind you, it is only the growing trees that absorb carbon dioxide. To keep and invest in growth is really important if we want to mitigate the global warming. From the renewable material we can harvest in the forest, we can then produce renewable products.
They can be used to replace fossil coal and oil, in that case, also reduce our demand for fossil material, meaning that the fossil material and coal can stay underground and not contribute to global warming. We will also work through this decade to improve with innovation and find new applications for our products and our excellent raw material. In this sense, we also enable others to reach fossil-free by enabling others with renewable energy. You have heard about our success within wind power, for example. The last component here is the fossil emissions in our value chain. With the value chain, we mean from the forest to the end or the gate of our customers.
The whole value chain. Our target is that this should be fossil-free, and our sub-target is that we will reduce the fossil emissions in our entire value chain with 50% until 2030. This is a challenge, and about 50% of this comes from transportation. Just to also give you some kind of perspective, when we reduce it for 50%, that's well in line with the science-based target of limiting global warming with 1.5 degrees. In order to do this, we need to rely on the forest, as I said earlier. With that, I will leave the word to Hans.
Thank you. Well, thank you, Katarina. Not only for introducing the sustainability platform here today, but also, of course, for all the hard work behind it in developing the platform over the recent years. Thank you for that. I will now share some details on the focus area around valuable forests. Valuable forests is, of course, about our own unique resource, our own 2.6 million hectares. It's also about the wood that we procure from other landowners, other forest owners. Both are equally important, and we focus on both those areas. The overall target here is that we make sure that 100% of the wood raw material comes from responsibly managed forests. In order to achieve this, we have set specific targets in three areas, and I will go through them quickly.
First one is around responsible external fiber sourcing, and the second one is around managing our own forests. Thirdly, but not least, we will look at the value creation in our own forests, including biodiversity conservation. Looking at the first sub-target then around responsible external fiber sourcing. First of all, this means we will procure 100% of our raw material with chain of custody certification, either according to FSC or PEFC. This means also that we will comply with the FSC standard for controlled wood. This standard means that the wood is legally harvested, it is not coming from deforestation, and it does not threaten high conservation values or human rights, and it is not genetically modified. These are all important sort of foundational requirements in our wood sourcing.
On top of that, we will also aim at 75% of the wood raw material as coming from FSC or PEFC certified forests. They will come from what we called forest harvested with SCA retention. SCA retention actually refers to areas that we as SCA harvest on behalf of other forest owners, mainly family forest owners. When we do this, we apply the same procedures as we do in our own forests, which means that the harvesting practices actually correspond to FSC certified forest management. The specific retention of trees, so the trees we leave behind, they correspond to FSC certification. This is what we refer to as SCA retention. Again, 75% of our raw material will either come from FSC or PEFC certified forests or what we call then SCA retention, which corresponds to FSC certified forest management.
The second area, second sub-target, is around how we manage our own forests. Here we will continue to meet the global benchmarks set out by the Forest Stewardship Council, FSC and PEFC on how to sustainably and responsibly manage our forests. Thirdly, maybe most significantly, we will make sure that our forests, SCA's forests, are at least as rich in biodiversity, nature, experiences, and raw material in the future as they are today. This means that we will increase the precision in our biodiversity conservation efforts in order to manage, monitor, and report on biodiversity going forward. This concludes the area of valuable forests. Moving to the next focus area around efficient use of resources. Here, the overall target is zero waste in our processes. In essence, this is really about making the most efficient use of the entire tree.
We'll start it out already mentioning this in the very introduction. It's about really creating value from the entire tree. First looking at the bottom part, the most valuable logs, going into our sawmills to produce solid wood products. Other logs that are not quite suitable for that will produce pulp and containerboard and by-products with either use for pulp, but also ultimately producing heat or energy for internal and external use. This area of zero waste is divided into three sub-areas. One around raw material yield, second around energy efficiency, and thirdly around emissions and waste. Looking at the raw material yield, this is really about making sure we have high yield in every process to simply reduce the waste. It also includes having an efficient use and valuable use of our residual streams, if it's for energy or biochemicals or other products.
Here's where we will see, as you've already heard, a range of innovations taking place. The second area around energy efficiency is to systematically increase our energy efficiency in our operations. This is mainly done through what we call an ESAVE program, aiming at a reduction of our energy use by 50 GWh per year up until 2025. Thirdly, we focus on our emissions and waste. I dare say that this is a part of the DNA in SCA. We, since maybe some 30 years, run a state-of-the-art resource management system, helping us to minimize emissions and effluents to air and water. It also helps us to minimize the landfill and hazardous waste in our processes. Moving on to the last part, but not least important part, about our responsibility for people and the communities.
This focus area has as an overall target an accident-free and healthy SCA. More fundamentally, this area is about really looking at our success, and the success and the sustainability of our company is ultimately driven by our dedicated employees and the partnerships that we create in our local communities. We develop together with the communities in which we operate. This is divided again into three different areas. First, we talk about our zero vision, and what is that? Well, it's quite simply a vision of zero accidents in our operations, and this will come through a mature health and safety culture in our organization. It takes systematic work, and it will be guided through what we call a Zero Program. The second part around People Create Success is the fact that competent, committed employees really form the basis of our organization.
We need a diverse and inclusive workplace where our leaders can develop and our employees can flourish and succeed. This forms the basis of our HR strategy, known as People Create Success. Then last but not least, we have a closer look at our contribution to local communities where we operate. It's actually not an overstatement to say that we are indeed literally a part of the communities where we operate. We create jobs, not least in rural areas. We are also, through our forests, actually present in the communities. Our forests offer opportunities for recreation, for berry picking, for hunting and fishing, this is an essential part of our presence in local communities.
We look at this as an essential part of our sustainability strategy since we secure prosperous local communities that we all depend on. To conclude and bring us back to where we started, our sustainability platform. You can see it again but now including the group targets for 2030. You can see for the fossil-free world, again, that we will increase our climate benefits to 15 million tons of carbon dioxide per year. Looking at our valuable forests, we will make sure that 100% of the wood raw material comes from responsibly managed forests. Looking at the efficient use of resources, we will make sure that we have zero waste in our processes.
Finally, thinking about the responsibility for people and the communities where we operate, we will make sure we have an accident-free and healthy SCA. Fundamentally and ultimately, all of this relies on profitable growth in the company and living our core values of excellence, responsibility, and, sorry help me, Katarina, respect. I got lost there a little bit. Sorry about that. That concludes the overview of the group sustainability targets for 2030. Thank you.
Thank you, Hans. Thank you, Katarina. We have now moved the full length of our value chain, and before we have the final question-and-answer session, we will have some concluding remarks from Ulf Larsson, President and CEO of SCA.
Thank you for that, Björn. Well, our business area managers, they have now walked us through our value chain, and I hope that you have got some insight of all the projects and initiatives going on out there just in order to reach the state where we will be in 2025. This slide maybe summarize the story in a rather good way. If we start again to the left-hand side, we have done and we still do a lot of investments in our forest. Forest is the unique asset in SCA, and with the investments and the efforts that we've done now in our own forest, we can successively increase our harvesting from that asset by 25% from today successively up to 2025.
In addition, we have, as Jonas mentioned, our ongoing program in the Baltics, that will give an additional potential as the times go through. If we then turn to the Wood division, as I said, 75% of the value for a forest owner is coming from our sawmills, that's the reason why we have done substantial investments in our sawmill business. Just now, we're performing a big project in Bollsta in the new grading mill. We have reduced the number of sawmills from 11 down to five just in order to be 100% cost efficient and reach best possible productivity. I can say I'm proud of that, because today we have absolutely world-class operations in our sawmills. We took last quarter the decision, which was a tough decision, to leave publication paper.
800 people will be impacted from that decision, but we've seen for many years now a declining market in publication paper and for SCA it was, in that perspective, an easy choice because we have alternatives. We took the decision already back in 2015 to invest SEK 8 billion in our Östrand mill. We've taken the decision to invest SEK 8 billion in a new Kraftliner machine in Obbola, and we have done also a lot of other big investments just to make sure that we get out the best possible value from the integrated value chain. Publication paper will not fit into that picture going forward from now. We've talked about the Kraftliner expansion, and as you heard, Mats, the project is so far on time, on budget, which is of course good news.
In pulp, we are up now to the capacity where we've been striving for a couple of years now. Now it's more a question of fine-tuning. At the same time, we feel that the market for both pulp and also Kraftliner is coming back in a positive way. We have a lot of projects and initiatives going on in renewable energy that will be, I think, maybe the most fast-growing segment for us going forward from here. We've done a lot of things in terms of wind. We know already today that we will reach 9 TWhs back in 2023, and we have a new long-term target for 11 TWhs. At the same time, we have a lot of other different projects going on in liquid biofuels, green chemicals, and so on.
This is my last slide. It takes some courage to make a strong company even stronger, and if you look to the left-hand side, saw that with the decisions that we have now taken, we will reduce our sales quite substantially from next year up till we have our new projects on stream. Publication paper, that will reduce our sales by SEK 3 billion-4 billion. Exit Wood U.K. will decrease our sales with another SEK 1 billion. On the other hand, if you look at the right-hand side, you can see that it will improve our EBITDA margin by approximately 5%.
It also takes some courage to invest in the future, and the decided projects, they will of course recover the sales, but they will also improve our EBITDA margin even further. All in all, when we are standing here 2025, like for like, we are back on track when it comes to sales, and we have increased our EBITDA margin by around 10%. Björn, with that, I think that we can open up for some questions, and maybe Toby, you can also come here.
Yes
Join me.
We have received a number of questions actually on a subject that is definitely complicated and not so easy to expand upon, and that's the European Union Taxonomy. A number of participants here, Christian Kopfer, Linus Larsson, Oskar Lindström, and more, wonder what will the impact on SCA be from the Taxonomy ambitions of the European Union, and what are we doing to improve our position in this complex spider web?
I'll try to answer that, but it is of course an evolving situation with the taxonomy, but what is clear today is that the forestry activity, that of course is at the heart of SCA, is very much seen as a green activity, which makes complete sense of course, and so it should be. I think that's a very important piece. What is still unclear is how that then reflects through the structure of taxonomy into how companies like SCA are classified as green or how much of SCA's activities are classified as green activities through the taxonomy, and that the structure doesn't seem to, in our view, maybe reflect that in a very clear way.
It seems to be based on sales, and if you're not selling the forest activity directly, a lot of our forest activity goes through in sales to industries which then are sold further to end customers, it's unclear how much of that would be then classified through the structure. I think we're working through this, and we also have a very significant piece of our climate benefit, which is related to substitution as well, which is a piece for the future in taxonomy that's not been fully worked through yet.
That remains to be seen how that will be treated. There's a number of different moving parts, and I think we're working through it. I think what would logically a huge piece of SCA's activity and SCA's businesses should be seen as green activity. We need to see how the reporting structure works to see how that would then work in practice.
I think we can add to this that we are not only passive bystanders when it comes to this development, but we are also actually actively trying to influence it, both directly with the working groups now defining a number of terms that will be important for the future. We are also looking into how would we define green activities, how would we measure them. Our own climate model is one example of that already in place. We are working both at the European level, but also at the national level in order to try to influence the conditions that we have to live within this area for the future.
Absolutely, Björn. As you say, a number of Nordic forest companies are very much in the same boat when it comes to this issue. I think we all have an interest to work together and make the system work in a sensible way also for us.
I can mention in this context that we had one question about how the climate model that we have presented, how it really works, and how the balance between different components when it comes to substitution works for SCA and so on. There is on our website, the full report, which we have based our climate model upon, and there you can see how we have calculated substitutions for wood products, for biofuel and so on. Please take a look there and I think you will find your questions on that subject answered there. We'll move on to other questions. We have one question here from Linus Larsson. If SCA, after having been sort of a landlord for wind projects, is actually considering to invest money in wind power on our own.
I can try to answer that one. What we try to do just now is to attract as much wind power capacity and projects as we can on SCA land. We are working with the infrastructure, we are working with permissions and things like that, and we also try to attract good and right investors. Up till now, as I think we have tried to describe today, we have a lot of projects going on in the company. For the moment being, the answer is no, we will not invest into wind power, but still we have the opportunity After this program is finalized and we feel that we like to put in more money in that kind of investments, then we can do it. We keep the possibility open, but for the moment, no.
We have one question on the really sort of most visionary level, I would say, and that is what kind of company does SCA want to be over the long term? We are investing heavily now in our industrial operations, expanding them. Do we want to keep the present balance between industry and forest, or are we intending to become more and more of a forest company or more and more a forest owner with an expanding industry?
Yeah, I think I tried to explain the situation we have. Again, the unique asset in SCA today is the forest. As also described, we are continuously buying forest, and that we've done since many years. Back in 2001, we did buy Graninge. That was, I think 270,000 hectares. Before that it was Svanö, before that it was Björkå and so on. When we have the chance to buy a high-quality forest asset, we will probably do that also going forward. Will we keep the balance? Again, I think the most important thing for us is to increase the value in this integrated value chain.
I think if we look at profitability, if we look at the total shareholder return that we have delivered now under a couple of years, I think that we have proved that we have a model for delivering a lot of value. That might be so that we have to close down some activities as we've done now with not the least publication paper. We've done a lot of money in publication paper since the start back in 1957, you said, Toby, and that was probably right.
We have done that. We have also after that then taken the decision to invest in pulp. We are also investing in Kraftliner. We are doing a lot of things now in renewable energy, which I think will be very good investment going forward. We will continuously look over best possibilities to create value and what kind of impact that will have on the balance, I don't know really, but we are here to make money. That's the most important thing.
Yes. Toby, we have one question here regarding the valuation of forest land. Jonas mentioned that there had been quite a large forest deal in the core of our own forest holdings. A company holding forest that was sold to a price that sticks out, you could say. How would you say that that affects our own view on the valuation of forest land? Should there be some kind of premium connected with forest being owned by companies as compared to private persons? Could you elaborate a little bit on how this. Evaluation of forest land is viewed from us?
We use market statistics in the bookkeeping to value our forest land, and we have to have a reliable basis for valuing our land so that the market statistics form that basis. The market statistics are a spectrum of all the transactions weighted then according to the region and the size of transaction. It's the spectrum of all the transactions in our area, so be it legal entities, but a significant number of private individuals and different qualities of land, different locations. In the total, it reflects probably an average piece of land and an average standard of location.
I think it is fair to say that companies like us that invest continuously in the infrastructure of the forest, and also forest that is owned by a legal entity, the evidence shows that does have a premium versus the average. I think I agree with that view. At the same time, we only have one set of statistics, and we have to go by a reliable set of statistics to put the value in our balance sheet. Yes, it's probably the case that it's a conservative measure when compared to the kind of forest land that we have.
May I add something?
Definitely.
Yeah. I think we are still very cautious when it comes to how we put value on our forest. I think what we see just now out in the market is an evidence for that. I think also that when you compare price level in the northern part of Sweden with what you have in some areas in the southern part of Sweden, there is a clear upside in our region. As you also mentioned, we can also now confirm, because that was also a question mark a couple of years ago, whether it was a price premium for big holdings and also for legal entities. We see that it is a higher price if it's bigger, and it's also a premium if it's a legal entity.
We have one historical question here, and Toby, since you were the one who sort of draw up the development from the cradle, I shouldn't say to the grave, but at least to the present. We're only youngsters here still.
Yeah.
It was a question about historical cash flow and margins for Ortviken publication paper business, which has now gone down the drain.
Over many years, Ortviken has delivered a fantastic return on cash flow for SCA. You can say in the recent history, we've always said that the day Ortviken turns negative, we will have to act. The publication paper market has been declining for a number of years. We've not been negative up until the start of this year, and that's what happened, and the pandemic certainly had an impact, but we believe that it's a long-term change also in the publication paper market, and that change to negative profitability and negative cash flow means that we had to act. That's what's happened.
Historical money doesn't pay your bills today, unfortunately.
No.
About year 2000, I think we made SEK 1 billion in Ortviken. In just that single mill.
It has done fantastic and should be respected for that, yes.
We have one question here regarding more immediate effects of these changes. Now, Ortviken will cease production in the first quarter, and will not consume any wood. What's our view on our wood consumption and wood supply for the coming two years, 2021, 2022, and 2023, when we're up and running with both the Kraftliner production in Obbola and with CTMP at Ortviken?
Obviously, that was also what Jonas said, the wood consumption will come down now for a couple of years, which is of course, I think, good because then we can consolidate in that part of our business for a while. When Obbola will be up and running, we will consume 400,000, 500,000 cubic meters more than we do today. When the CTMP production is up and running, we will add maybe another half a million of cubic meters. We are looking into possibilities to increase the production at the level at our sawmills and so on. As I also did show, the sales will come down for a couple of year now, wood consumption will come down, then we will come back to the level where we are today. Hopefully, we will also continue to increase production.
Okay. We have one question here. That requires some speculating into the future. How attractive are investments in renewable fuels? Could they be more financially attractive than traditional forest industry investments? What risks are involved? Is this something for SCA?
Was it renewable?
Liquid biofuels, I would say.
That is one of our main tracks as Mikael described, and we do a lot of efforts into this area and a lot of our resources in our research company on campus to the Mid Sweden University, they are working with this track. As Mikael did tell us a couple of minutes ago, you have to do a lot of work here, a lot of research, but fundamentally it will be a very strong market. Demand will be there. If we shall have a chance to go from fossil-based society and fuels over to something else, then we are maybe the most important part of that solution. Definitely we will be in there. Just now we are in a research phase. We will not do it so fast, so we will increase the risk too much. We will take it step by step, but definitely.
Yep. We hope that we will be able to give a more substantiated answer to that question on the next Capital Markets Day, and that we by then have done significant progress in this field. Thank you very much for participating in this Capital Markets Day. We think it's sad that you're not here, and we hope that for the next Capital Markets Day, you will be with us and that you will have your boots muddy and that we can see some of the things that we now have presented on slides and on film and so on, more in reality.
We have not answered all the questions. Please keep in touch, and we will try to either answer what cannot be answered right now or to elaborate on what has been maybe too vague or too general. We'll hear from each other again on the 29th of January when we will present the full year report for SCA for 2020, this very different year. I hope you all are well and healthy until then and afterwards as well. Thank you very much.