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

ACTIONS

Reducing emissions to air

Planned actions • UPM will continue to develop and implement measures to reach its 2030 targets. • At UPM Kaukas pulp mill’s recovery boiler, the renewal of their four Electrostatic Precipitators (ESPs) continues with the third ESP in 2025, after the renewal of two ESP in 2023. This will further improve air quality by reducing dust emissions especially.

concrete structures on the mill site. Learnings were shared internally as part of UPM's Clean Run concept. All the measures agreed with the authorities were taken, such as the interception and removal of subsurface flow with trenches, the reparation of the stormwater control basin and preventive actions in other concrete structures of the mill. The creek has shown sustained natural recovery since the incident in August 2023. The environmental monitoring continues to follow up the recovery of the affected section of the creek. In January 2024, the Uruguayan Ministry of Environment imposed a fine of approximately USD 188,000 on the Company for this non compliance with the environmental management plan for the UPM Paso de los Toros pulp mill. The sanction was paid in 2024. Reducing emissions to water Key action Water is an essential resource for pulp and paper mills. All wastewater from UPM's pulp and paper production is cleaned in both mechanical and biological effluent treatment processes, either at an external or own wastewater treatment plant. The purified water is usually returned to the same watershed from which it was taken. UPM has chosen COD (chemical oxygen demand) as the most appropriate indicator for emissions to water, i.e. effluent load, from pulp and paper production. A Group-level reduction target has been set, to be achieved by 2030. Pulp and paper mills have respective specific plans to achieve their reduction targets for COD in their treated wastewater by 2030. In 2024, the specific emissions of COD per tonne of paper decreased by 10% compared to the previous year and by 33% compared to the target base year 2008. The specific emissions of COD per tonne of pulp decreased by 3% compared to the previous year and by 53% compared to the target base year 2008. » Refer to E2-3 Targets for the follow-up of the target at Group level and an explanation of COD. UPM was the first Finnish freight carrier to commit to the Ship Waste Action Initiative of the Baltic Sea Action Group. In Finland, from the spring of 2022 onwards, UPM has discharged ship-generated wastewater on land where its nutrients can be utilised. Actions in 2024 • Several actions focused on reducing the risk of soil or groundwater pollution. At UPM Kymi, Finland, the bottom structure at the bark storage area was improved. At Paso de los Toros, Uruguay, investments were made in contention areas for emergency situations. Improvements were also made to chemical unloading areas of several sites (e.g. plywood mills, UPM Kaukas paper mill). • At UPM Nordland Papier in Germany, a project to separate the dewatering of biosludge and fibre sludge started at the site's wastewater treatment plant. A COD reduction of 20% is expected due to this measure, beside the improved sludge recycling options and reduction of transports. The project will be finalised in 2025. Planned actions • UPM will continue to develop and implement measures to reach its 2030 targets. • The primary clarifier at UPM Jämsänkoski paper mill in Finland will be renewed in 2025, which is essential for the efficiency and effectiveness of the entire wastewater treatment process.

Key action UPM's main source of air emissions is energy generation. The quantity and quality of air emissions depend on the amount of energy produced at power plants or boilers, the operating rate of the paper machines and the fuels used. The choice of fuels, combustion technology and flue gas purification are ways of reducing these emissions. Boilers using biomass based fuels, oil and coal are equipped with filter systems. Acidifying flue gases (NOx and SO 2 ) have been identified as having the most material impact, and a target to reduce these air emissions by 2030 has been set. In 2024, the specific emissions of acidifying flue gases per tonne of paper decreased by 12% compared to the previous year and 32% compared to the target base year 2015. The specific emissions of acidifying flue gases per tonne of pulp were unchanged from the previous year and decreased by 8% compared to the target base year 2015. Transport contributes to air emissions to a smaller extent. In recent years, UPM has invested in seven vessels which run on dual fuels, which means a combination of traditional marine gas oil and liquefied natural gas (LNG). When fuelled with LNG, their CO 2 emissions will be 25% lower than those of commonly used marine gas oil. In addition, nitrogen oxides (NOx) will be cut by about 85%, and sulphur oxides (SOx) by approximately 99%. Emissions of soot particles will also be decreased by 99%. Actions in 2024 • UPM joined a 5-year research programme led by VTT and RISE Research Institutes of Sweden on emission-free pulping. The programme aims to significantly reduce biomass burning and increase the product yield from wood from approximately 50% to around 70%. » Refer to E2-3 Targets for the follow-up of the target at Group level.

E2-2

Based on UPM's identified material topics, UPM has set the following focus areas and Group-level targets related to pollution: • Climate (with a target for emissions to air – NO X and SO 2 ) • Water (with a target for emissions to water – COD) • Water (with a target for use of nutrients from recycled sources); » Refer to E5-2 and E5-3 • Product stewardship (with a target for share of ecolabelled products); » Refer to E5-2 and E5-3 • Waste (with a target for landfill waste); » Refer to E5-2 and E5-3 • Responsible sourcing (with targets on spend covered by UPM Supplier and Third-Party Code); » Refer to G1-2 Action plans have been established to achieve the Group-level targets, as well as other relevant areas for continuous improvement. The key actions, previous year's key actions, planned key actions and overarching concepts are presented below. UPM Clean Run concept environmental management system that aims to improve UPM's environmental performance by bringing environmental issues to the forefront of everyday work and enabling a consistent way of working in all operations. All sites systematically follow up deviations, proactively report observations and near misses, carry out environmental walks and discussions, share best practices, and prepare detailed risk assessments. Clean Run and long-term environmental targets reviews are conducted regularly. Roadmaps for achieving the Group's environmental targets for 2030 are developed by the relevant production sites and business areas, and actions are taken accordingly. UPM continuously strives to reduce its risk exposure and improve its performance by using tools such as certified management systems. All production sites have a certified ISO 14001 environmental management system, except for two UPM Raflatac sites in Germany which were acquired at the end of 2022, one of which will be closed during 2025. Certification of the other site is expected to be completed in 2025. In 2024, approximately 1,900 (1,500) environmental walks were organised, and 2,200 (2,600) preventive environmental observations and near misses were reported. In 2024, the number of environmental non-conformances increased to a total of 35 (28) deviations from permit, contractual or other legal obligations. 6 cases were related to air, 23 to water, 1 to soil, 2 to soil and water, 1 to noise and 2 to logging. All deviations from environmental permit obligations were reported to the authorities and, where relevant, to local stakeholders. In all cases, appropriate measures were taken to normalise the situation and will be taken to prevent similar occurrences. No major environmental incident occurred in 2024. In 2023, a major environmental incident occurred at UPM's new Paso de los Toros pulp mill in Uruguay. Sodium hydroxide mixed with rainwater leaked from a stormwater basin through the soil into a nearby creek, causing the pH level of the water in the creek to temporarily increase. The stormwater basin was repaired. Operational and maintenance procedures in the chemical storage area have been reviewed and updated, and the findings have been used to review and improve other The Company-wide Clean Run concept, which was launched in 2012 and has since been developed to cover all operations, is a holistic

» Refer to E5-2 Actions for actions related to waste and chemicals.

Resources In 2024, UPM's environmental investments totalled EUR 20 million ( 60 million). The significant decrease compared to the the previous year is mainly due to investments in eight electric boilers in 2023. The largest investment in 2024 was at UPM Kymi, where approximately EUR 2 million was spent on improvements at the bottom structure of the bark storage area. UPM's environmental costs, which were mainly attributable to effluent treatment and waste management, totalled EUR 111 million (121 million), including depreciation. During 2024, no significant capital expenditures for new environment-related projects were announced. » Refer to line item Capital expenditure in Consolidated cash flow statement » Refer to line item Costs and expenses in Consolidated income statement » Refer to Note 2.3 Operating expenses and other operating income in the consolidated financial statements

UPM FINANCIAL REPORT 2024

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UPM FINANCIAL REPORT 2024

179

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UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024