UPM Annual Report 2024

WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Report of the Board of Directors

Sustainability Statement

Financial Statements

Auditor's Report

Sustainability Assurance Reports

METRICS Energy consumption and mix

Expected decarbonisation levers UPM's path to net-zero is expected to be based on the decarbonisation levers shown in the graph below as an indicative roadmap. UPM's long- term target setting baseline year is 2018. UPM's fossil CO 2 emissions are forecasted to be reduced mainly through actions to improve energy efficiency, switch from fossil fuels to biogenic fuels or hydrogen, electrification of heat generation and other production processes, strategic investments and activities, as well as activities to reduce the CO 2 emissions in our value chains. External effects such as the decarbonisation of the electricity grid and economies as a whole, as well as general market developments, are also considered to play an important role.

The remaining residual emissions could be more than balanced by the potential carbon sinks of UPM's forests, product-related impacts like temporary carbon storage or other carbon removal options. According to the SBTi, net-zero means reducing GHG emissions by at least 90% and neutralising any residual GHG emissions through carbon removals on an ongoing basis. UPM's net-zero approach will be aligned with recognised international carbon accounting and assurance standards when these are finalised.

Electricity generation through own power plants and shareholdings

MWh

2024

2023

E1-5

CHP at production sites, renewable CHP at production sites, non-renewable

4,600,000 1,200,000 1,000,000 2,200,000 7,600,000

4,000,000 1,200,000 1,100,000 2,200,000 8,000,000

Most of the electrical and thermal energy is used for UPM's paper and pulp production. However, pulp mills produce more energy than they consume. UPM generates steam and electricity from combined heat and power (CHP) plants. Renewable fuels account for 80% (76%) of the fuel used at the production sites. UPM's target is to stop using coal and peat for on-site energy generation by 2030. Currently, coal is the main fuel used at the UPM Changshu paper mill in China, where alternatives have been unavailable in the past. Peat is used in Finland. Energy consumption and mix

Hydropower

Hydropower, shareholdings Nuclear power, shareholdings Thermal power, renewable, shareholdings Thermal power, non-renewable, shareholdings

90,000

110,000

UPM's pathway to net-zero (illustrative)

10,000

20,000

Total

16,700,000

16,630,000

In addition to energy generation at UPM's production sites, UPM is significant player in the Nordic electricity market with its nuclear and hydropower holdings and, to a lesser extent, thermal power. Energy intensity associated with activities in high climate impact sectors

MWh

2024

2023

Natural gas

4,200,000 1,500,000 2,500,000

4,900,000 1,400,000 2,400,000

Oil

Coal Peat

260,000 130,000

240,000 170,000

MWh/EURm

2024 2023 % 2024/2023

Fossil recovered fuel

Total energy consumption (MWh) per net revenue (EURm Sales)

Total fossil fuels

8,600,000 3,400,000

9,200,000 3,000,000

4,720 4,330

9 %

Electricity from nuclear sources* Other purchased electricity and heat (non-renewable) Total non-renewable energy consumption Purchased electricity and heat (renewable) Self-generated non-fuel renewable energy (hydropower) Total renewable energy consumption Share of non-renewable sources in total energy consumption (%) Share of renewable sources in total energy consumption (%) Renewable fuels Total energy consumption

All UPM's business activities are considered to be in high-climate impact sectors according to the NACE classification, either as manufacturing or forestry. Sales correspond to total sales as reported in the consolidated financial statements. » Refer to Note 2.2. Sales in the consolidated financial statements, Accounting policy.

1,300,000

2,100,000

13,200,000 14,200,000 34,000,000 29,700,000

1,600,000

1,400,000

10,000

20,000

35,600,000 31,100,000

48,800,000 45,300,000

27 %

31 %

73 %

69 %

*UPM's shareholdings in nuclear power generation are included with the amount used by UPM's production sites Note: Sales of electricity and heat is not deducted but reported as products in E5-5 Resource outflows.

UPM FINANCIAL REPORT 2024

156

UPM FINANCIAL REPORT 2024

157

156

157

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024