UPM Annual Report 2020

REDUCING ENERGY USE AND EMISSIONS TO AIR We are constantly seeking new solutions to minimise our environmental impact by selecting optimised energy sources and generation methods, and by improving energy efficiency.

We favour the use of renewable and other carbon-neutral energy sources. Biomass- based fuels account for 72% (70%) of our fuel usage. As the use of weather-dependent energy sources increases around the world, the need for balancing power within energy systems will also grow. Hydropower is the most effective and sustainable method of producing balancing power and we have significant hydropower assets in Finland. The majority of our energy consump tion originates from the paper and pulp mills’ production where electricity and heat are needed in mechanical pulping, pumping and drying. We generate steam and electricity through combined heat and power (CHP) plants at all of our pulp mills, and at almost all of our paper mills. At some mills, all or part of this energy is produced by external or co-owned power plants. We are constantly looking for ways to improve our energy efficiency across our operations with audits, innovations and investments. However, in 2020 we did not reach our annual target of increasing energy efficiency by 1%. As a result of the energy-saving invest ments we carried out in 2020, we reduced our energy costs by EUR 0.3 (1.2) million, avoided emitting 2,400 (12,800) tonnes of CO 2 and achieved a 13,000 (41,000) MWh Continuous improvement in energy efficiency

reduction in energy consumption. The annual savings were EUR 0.8 (1.4) million, 8,600 (15,600) tonnes of CO 2 and 44,000 (49,000) MWh of energy. Reducing emissions to air in production We tightened our 2030 targets for reducing our emissions of fossil CO 2 and acidifying flue gases (NOx and SO 2 ) in January 2020. We are taking steps towards these targets through consistent improvement pro grammes and investments. At UPMNordland paper mill in Ger many, we are building a natural gas-based combined heat and power (CHP) plant. At UPMHürth paper mill in Germany, we

have partnered with E.ON to replace the fossil-fuel-based steam supply with a bio mass-fired boiler which will provide steam for the mill. Both projects are expected to be finalised in 2022. After completion, they will contribute to reaching our fossil CO 2 emission target for 2030 (page 54). At the UPM Changshu paper mill in China, we are modifying the natural gas boiler to further reduce our NOx emis sions. After its finalisation in 2021, we will reach the very low emission limit of 50mg/Nm3. In China, a nationwide carbon emission trading systemwas established for the power sector. The system covers more than

SIGNIFICANCE • Energy generation is the main source of air emissions • Fossil fuels are the largest contributor to climate change • UPM is a significant producer and user of energy TARGETS

• Significantly cut fossil CO 2 emissions from production and increase energy efficiency • Minimise acidifying flue gases (NOx and SO 2 ) emissions by efficient purification OUR WAY • Committed to continuous improvements in energy efficiency and to an increased share of renewable and low-emission energy

• Use of Best Available Techniques (BAT) • Focus on 2030 responsibility targets

88

89

UPM ANNUAL REPORT 2020

UPM ANNUAL REPORT 2020