UPM Annual Report 2016

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Stakeholders

In brief

Strategy

Businesses

Governance

Accounts

O P E R A T I N G E N V I R O N M E N T M e g a t r e n d s | N e w t e c h n o l o g i e s | L e g i s l a t i o n & r e g u l a t i o n s M O R E W I T H B I O F O R E I n n o v a t i o n s | E f i c i e n c y | S u s t a i n a b i l i t y VALUE CREATION

Circular economy at UPM

UPM’s total waste to landfills 1,000 t

The total amount of solid waste sent to landfill has decreased over the last ten years by 30%. However, from 2012 to 2013 the total amount of waste sent to landfill increased significantly. This is due to the fact that former reuse possibilities for ash ceased at one of UPM's paper mills. Starting from 2014, new methods of recycling were established. However, in 2016 amount of waste increased due to production increase of chemical pulp.

200

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10 09 08

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Resource efficiency

PRODUCTS FROM SIDESTREAMS & WASTE

At UPM circular economy, in short, means reusing materials and products several times and creating added value through smart solutions. In circular economy, we also avoid

Recycling

Raw materials & water

RENEWABLE FIBRE-BASED PRODUCTS

SIDESTREAMS WATER ENERGY

generating waste, and strive to increase the use of renewable energy and materials.

Product stewardship

EFFICIENT RECYCLING OF WASTE STRENGTHENS UPM’S POSITION AS FORERUNNER IN CIRCULAR ECONOMY Zero solid waste to landfill is one of UPM’s 2030 responsibility targets. Most of UPM’s mills in Central Europe have already reached this goal. UPM’s mills in Finland are involved in a Zero Solid Waste project which aims to find solutions for recycling and create value from ash, sludge, dregs, wood-based waste and landfill waste. UPM Jämsä River Mills is one of the forerunners in the project. In 2016, no waste from the mills was sent to landfill. All waste is recycled in its current form or after further treatment. Forms of waste that cannot be used at the mill or by any other party are incinerated for energy. Oil, metal, plastic, paper and cardboard waste are collected for recycling and hazardous waste is forwarded for further treatment. Non-recyclable wood, plastic, paper and cardboard waste are sent to be used as raw material for recovered fuel and, for example, to the UPM Rauma power plant for incineration. Ash from power plants and, for example, soil are sent to be used in soil enrichment or in excavation work.

RECYCLING NUTRIENTS FOR A HEALTHIER BALTIC SEA

Other good examples of the company’s efforts in promoting circular economy: • UPM is the world’s largest user of recovered paper for the production of its graphic papers, consuming 2.8 (3.1) million tonnes of recovered paper in 2016 • The share of recycled fibre represents one third of all fibre rawmaterials used in UPM’s paper production • UPM’s renewable diesel, UPMBioVerno, is produced from crude tall oil, a residue of pulp production • UPMProFi utilises the cellulose fibres and plastic polymers that are surplus by-products from self-adhesive label manufacture and gives them a new life UPM’s aim is that the company’s mills will not send any waste to landfill by 2030. This target has already been achieved at most of the paper mills located in Central Europe. In Finland, the UPM has a Zero SolidWaste project which aims to find the best practice for recycling ash, sludge, dregs, wood-based waste and landfill waste. UPM’s research activities also focus on utilising and recycling production side streams more efficiently.

UPMhas followed the principles of circular economy in its operations for a long time. Today, megatrends like population growth and urbanisation, digitalisation, climate change and sustainability highlight the importance of circular economy and generate new opportunities. New technologies give UPMnew ways to create innovative solutions. These technologies include the likes of industrial biotechnology, new uses of fibre, 3D printing, and energy technologies. UPMutilises wood by-products, such as bark, sawdust and wood chips, for pulp and energy generation. Many of UPM’s new products are made of by-products and waste from traditional production processes. UPM aims to use every single wood fibre innovatively and efficiently and to offer high-quality alternatives to non-renewable materials. Recycling waste is part of circular economy Reducing the amount of solid waste and increasing recycling and recovery are important targets at all UPMmills. To us, yesterday’s waste is the valuable rawmaterial of tomorrow. Nearly all organic production residues, including bark and wood residues, as well as fibre-containing solids from deinking and effluent treatment, are used in energy generation at mill sites. Ash originating from bioenergy production forms the most significant proportion of UPM’s solid waste. Ash is used on a large scale in applications ranging from landscaping to road building. UPMhas developed innovative ways to reduce its own waste and residues and recycle waste in new products.

Advanced nutrient recovery and recycling practices directly reduce pollution of local water resources.

A good example of this practice can be found at the UPM Rauma mill. This mill co-treats its own effluents and those from the city. This combined effort in treating effluents significantly reduces the amount of nutrients that end up in the Baltic Sea. Nearly 100% of the nitrogen and phosphorus present in the city’s effluents can be reused at the co-treatment plant, meaning that they no longer contribute to eutrophication of the sea. The waste heat derived from the effluents is used to dry out sludge from the treatment plant, which, in turn, is used for energy and heating production in the city of Rauma. The ash generated during this process is reused for landscaping applications. In autumn 2016, Raki2, a nutrient recycling programme run by the Ministry of the Environment of Finland, provided the funding for a joint project established by UPM together with the fertiliser and crop nutrition expert Yara. The project focuses on the possibilities for reusing nutrients in agriculture. These nutrients are retrieved from the sludge generated by the pulp and paper mill’s effluent treatment plants, as well as ash from the incineration process. Nutrient recycling is a good example of the circular economy concept, whereby natural resources are recycled and reused as many times as possible. UPM’s target is to start using 100% recycled nutrients in all of its effluent treatment plants by 2030. This target is included within UPM’s commitment to the Baltic Sea Action Group (BSAG), which promotes the restoration of the Baltic Sea’s ecological balance.

The efficient recycling of different forms of waste reduces landfill costs and creates revenue.

Read more: www.upm.com/responsibility www.upmbiofore.com