UPM Annual Report 2017

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In brief

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Circular economy at UPM

Many of UPM’s current and new products are made from side streams and waste from traditional production processes. New technologies give UPM new ways to create innovative solutions.

CLOSING THE LOOP

UPM Specialty Papers is taking a step towards a circular economy by developing a high-quality release base paper made partly of recycled fibres. Silicone is removed from the collected release base papers in the deinking process and the pulp is reused for papermaking. Currently only approximately 10% of release base papers are collected and recycled, so there is plenty of raw material available. UPM is reusing materials collected from its end users, and has launched a new release base paper product family. Recycling release base papers provide high-strength fibres that can replace virgin fibres. The product has also received Food Safety approval so it can be used for food packaging. By recycling waste to make new valuable products, UPM aims to improve resource efficiency further and respond to the increasing demands to develop products made of recycled raw materials.

UPM ProFi celebrated its 10 year anniversary in 2017. Many of the material and production innovations of UPM ProFi biocomposite products are protected by a patent.

SIGNIFICANCE • Circular economy addresses two central global challenges: climate change and resource scarcity • Growing demand and competition for raw materials • Circular economy improves efficient use of materials and brings a competitive advantage

Recycling is part of a circular economy UPMhas developed innovative ways to reduce its own waste and residues and to recycle waste in new products. Good examples of the company’s efforts in promoting circular economy include the following: • UPM is the world’s largest user of recovered paper for the production of its graphic papers, consuming 2.6 (2.8) million tonnes of recovered paper in 2017, while recycled fibre represents approximately 30% of all fibre raw materials used in UPM’s paper production • UPM’s renewable diesel and naphtha, UPMBioVerno, are produced from crude tall oil, a residue of pulp production • Celebrating its tenth anniversary, UPMProFi biocomposite utilises the cellulose fibres and plastic polymers that are manufacturing surplus from self-adhesive label materials production • A new sustainable lignin-basedWISA BioBond gluing technology in plywood manufacturing using a lignin by-product from pulp production • The RafCycle ® recycling solution enables UPMRaflatac’s customers to reduce their waste flows • Increasing use of recycled nutrients at UPM’s effluent treatment plants UPM’s target of no process waste has already been achieved at most of the paper mills in Central Europe. In Finland, UPM implemented a Zero Solid Waste project which aims to find the best practice for recycling ash, sludge, dregs, wood-based waste and landfill waste. In 2017, UPMTimber sawmills and UPMPlywood mills in Finland as well as UPM Jämsä River and Rauma paper mills reached the zero solid waste status. In 2017, the UPMRaflatac's RafCycle recycling solution was expanded to China. The paper liner waste generated by the RafCycle partners in China is delivered to a partner where the paper liner waste can be recycled back into pulp and paper. UPMRaflatac has now 100 RafCycle partners globally. 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.

UPM’s total waste to landfills 1,000 t

The total amount of solid waste sent to landfill has decreased by 37% over the last ten years. 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.

200

150

TARGET • Promote material efficiency and circular economy – reduce, reuse and recycle

Read more: www.upm.com/circulareconomy

100

50

0

11 12 13 14 15 16 10 09 08 17

OUR WAY • Reuse materials and products several times and create value through smart solutions • Recycle and reuse production waste and utilise by-products • Sustainable and innovative new businesses and solutions for future needs • Focus on 2030 target: no process waste to landfills

NO GREEN LIQUOR DREGS TO LANDFILLS

Green liquor dregs are one of the most challenging side streams of UPM’s pulp production. For several decades, efforts have been made to find a cost-efficient and sustainable alternative to landfill disposal. To reach the company’s global target of zero solid waste to landfill by 2030, UPM took an even more active approach in 2017 to the challenge posed by green liquor dregs. UPM’s Research and Development centre in Lappeenranta has been working together with the company’s Finnish mills, which generate green liquor dregs, to find new processing methods and end uses for productised materials based on green liquor dregs. A new product innovation is currently being tested together with partners, and initial results have been promising. A possible breakthrough would significantly reduce the amount of waste from pulp mills in Finland in the near future.

of UPM’s total process waste recycled or recovered

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

89%

TARGETS 2030

CONTENTS

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UPM Annual Report 2017

UPM Annual Report 2017