UPM Annual Report 2023

RESPONSIBILITY

UPM

BEYOND FOSSILS

BUSINESSES

GOVERNANCE

ACCOUNTS FOR 2023

the product lifecycle. Our environmental 2030 targets ensure resource efficiency and contribute to the UN’s Sustainable Develop ment Goals. Our circularity targets By 2030, we will not deposit any process waste at landfill sites and process waste will not be incinerated without recovering the energy. On average in 2023, 87% (90%) of our process waste was recycled or recovered, 30% of which comprises energy recovery. Today, 60% (58%) of our production sites use 100% of the process waste. The total amount of waste to landfill increased by 50% (decrease of 40%) compared to 2022, mainly due to the start-up of our new pulp mill in Uruguay. Our other circularity target is to use 100% of nutrients from recycled sources in our own effluent treatment plants by 2030. In 2023, 33% (33%) was achieved. We share best practices, research results and ideas throughout the company, and have several internal working groups focusing on the use of side streams and the recycling of nutrients. Green liquor dregs are a side stream originating from pulp production and one of our most challenging process waste to reuse. We are putting a lot of effort into developing ways to find a sustainable use for it (below). Making use of residues, side streams and recovered materials Most of our organic production residues, such as bark, wood residues and fibre-con

taining sludges from deinking and effluent treatment, are used to generate energy for mill sites. Some fibrous residues are used in brick manufacturing or as soil amend ment materials. Overall, ash originating from bio mass-based energy generation makes up the largest share of our solid waste. In 2023, 93% (97%) of the ash was used in various applications such as soil stabilisation and the cement industry and used internally to replace caustic soda or as a raw material for paper filler production. UPM BioVerno renewable diesel and naphtha are produced from crude tall oil, a residue from chemical pulp production. For decades, we have been researching new innovative uses for lignin, a side stream from pulp production. A good example is our WISA BioBond gluing technology, where lignin is used to replace most of the fossil-based phenol used in plywood produc tion. Lime is a side stream of pulp produc tion and can be used as a liming agent or for pH adjustment. We are also actively enhancing cir cularity over the product lifecycle by using recovered materials. UPM Raflatac collects label waste from more than 440 partners globally and recycles it with its RafCycle ® service. The service takes self-adhesive label waste and gives it new life as various paper grades, insulation materials, PET products and biocompos ite material. We also have a long history of using recovered paper to produce new

Process waste to landfills 1,000 t dry weight

120

90

60

30

0

0

19

21

22 23

Target

20

TARGETS 2030 No process waste to landfills or to incineration without energy recovery

TARGETS 2030 100% of nutrients used at effluent treatment from recycled sources 87% recycling or recovery achieved for our total process waste 33% achieved

ADVANCING A CIRCULAR BIOECONOMY ACTIONS FOR ENVIRONMENT

We use materials, energy and water efficiently, and many of our products are made from side streams, residues or recovered materials.

IN ACTION

NEW BUSINESS FOR THE CIRCULAR ECONOMY

used the decommissioned lime kiln of UPM Tervasaari’s disused pulp mill as the testing site. Based on these trials, the companies have now developed a soil stabiliser for the civil engineering industry that meets the technical requirements. The collaboration will continue in 2024, with the aim of finetuning the process to the final production stage and testing the performance of the final product in various applications. These activities will enable us to solve the challenge of 30,000 tonnes (dry weight) of green liquor dregs generated annually at the three pulp mills in Finland.

Our goal is to minimise waste, maximise the utilisation of side streams and create added value through smart solutions. We are constantly looking for partners to co-create circular innovations linked to side stream use and valorisation and supply chain efficiency. In response to climate change, we are actively developing new solutions to accel erate the transition to a circular bioecono my and we aim to continuously reduce our environmental impact. Our sustainable product design concept includes circularity aspects throughout

IMPACT • Resource efficiency and a circular bioeconomy respond to resource scarcity, contribute to climate change mitigation and provide new sustainable solutions for customers and consumers TARGET • Efficient use of all material streams and the implementation of a circular bioeconomy; renew, reduce, reuse, recycle and recover

OUR WAY • Circularity as part of our Sustainable Product Design concept • Renewable raw materials from sustainably managed forests • Circular use of materials, nutrients and water • Use of residues, side streams and recovered materials • Cross-industry and cross-business collaboration • Focus on 2030 responsibility targets

We have been researching the reuse of green liquor dregs for a long time and have been actively finding solutions for this process waste, most of which is still sent to landfills. After exten sive trials in 2023, we are now one step closer to creating a responsible and profitable business for the side streams generated from pulp mills. UPM and Tapojärvi Oy, a Finnish special ist in mining and mill services, tested green liquor dregs and other industrial side streams in industrial-scale trials in Valkeakoski. They

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UPM ANNUAL REPORT 2023

UPM ANNUAL REPORT 2023