UPM Annual Report 2024

First page Table of contents Previous page 206-207 Next page Last page

WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Report of the Board of Directors

Sustainability Statement

Financial Statements

Auditor's Report

Sustainability Assurance Reports

Resource outflows

Raw materials

Secondary material

performance of timber and plywood in construction applications is proven by CE marking. Durability is also required of paper used for archiving or other long-term purposes or labels for specific end uses. Repairability Repairability is not a relevant requirement for UPM's product range. Recyclable content The majority of UPM's products are recyclable, depending on how they are further processed. Paper: UPM's paper grades that are mainly used for printing or packaging are 100% recyclable if the further processing does not affect recyclability. Paper recycling systems are well established in most countries. Efficient paper recycling depends on the local infrastructure for national collection and recovery systems. Pulp: Pulp is 100% recyclable and biodegradable. However, pulp is at the beginning of the processing chain and can be processed into different paper grades (including hygiene papers) or other pulp-based products. A reasonable estimate of the recyclability of the final product is therefore impossible. Converting materials: The label release liner, the thin layer of paper or plastic that protects the adhesive side of the label, is often discarded after use. This is why UPM Raflatac has developed the RafCycle™ circular solution, a recycling service that enables customers to turn their label liner waste into new raw materials. The actual label used on products can theoretically also be recycled but this depends on the packaging design. A reasonable estimate of the recyclability of the final product is therefore impossible. Plywood and veneer: Plywood is a 100% recyclable material when repurposed as a raw material for secondary products or reused as such, e.g. in construction, after its initial use. Plywood can also be used as a fuel source in energy production after its first life cycle. Sawn timber: Sawn timber is 100% recyclable. However, it is at the beginning of the value chain and can be processed into multiple end-use products. Therefore, it is not possible to estimate the potential for reuse and recycling for end products. Typically, sawn timber is used as a fuel in energy production at the end of its life cycle, replacing fossil fuel sources.

TONNES (INCL. MOISTURE)

2024

2023

RECOVERED PAPER

2024

2023

E5-5

Wood

23,300,000 21,800,000

Tonnes (incl. moisture)

700,000

760,000

Market pulp

1,300,000

% of total raw materials

2 %

3 %

Products

Recovered paper

700,000

760,000

Efficient paper recycling depends on local infrastructure for national collection and recovery systems. Recovered graphic paper is sourced from Europe, where the most significant suppliers are waste management companies, printing houses and local authorities. Recovered paper is used as a raw material in UPM's graphic paper production and accounted for 15% (17%) of fibre materials used in UPM's paper production in 2024.

Purchased paper for converting

310,000

280,000

UNIT

2024

2023

Minerals

1,800,000

1,900,000

Paper

4,600,000 4,700,000

Chemicals

930,000

950,000

Chemical pulp

5,000,000 4,200,000

Plastics, adhesives, resins, films

160,000

130,000

Converting materials

500,000 400,000

Total

28,600,000 27,100,000

Plywood and veneer

m3 500,000 400,000

Sawn timber

m3 1,200,000 1,500,000

Percentage of biological material

Reporting principles for metrics

Heat

GWh

1,000

Raw materials Wood is usually measured in cubic metres. » Refer to E4-5 Wood deliveries . Conversion to tonnes is calculated using factors based on measurements and/or literature. The average moisture content of wood is estimated to be 50%. Market pulp and recovered paper are purchased as air dry tonnes with a dry solid content of approximately 90% and 94% respectively. The moisture content of other raw materials may vary, but the relevant delivery quantities are available in UPM's sourcing systems. UPM's Group-level reporting focuses on the Company's use of fibre and other raw materials. Information about material use is aggregated data from UPM's sourcing units. Note: In the UPM Annual Report 2023, the amount of pigments was reported in dry tonnes. Percentage of biological material Only wood is considered biological material in the calculation. UPM considers other wood-based materials the result of a technical production process. In accordance with ESRS E5-4, the denominator for the percentage indicator is the total weight of raw materials in their original state, i.e. including moisture. Secondary material Recovered paper from external sources is included in the calculation as secondary material. Internal recovery is not included. In accordance with ESRS E5-4, the denominator for the percentage indicator is the total weight of raw materials in their original state, i.e. including moisture.

Electriciy

GWh

13,000

14,000

2024

2023

Wood share in total raw materials

81 %

80 %

Designed according to circular principles Some of UPM's products are made from side streams and residues or from materials recovered after product use, thus supporting a circular bioeconomy. For use of side streams and production residues » Refer to E5-2 Making use of residues, side streams and recovered materials. For use of recovered paper in paper production » Refer to E5-4 Secondary material. Durability The majority of UPM's products are business-to-business mass products such as pulp, paper, labels, timber, plywood and biofuels. For such products, durability is usually not the relevant requirement, but recyclability or biodegradability. However, durability is relevant in the case of plywood used for construction or in vehicles or timber when used for log houses or for building in general, for example. The lifespan of UPM plywood can be as long as 100 years. The durability and

UPM considers only wood a biological material. Its share of total raw materials is calculated based on data in the Raw materials table. Other wood-based raw materials such as pulp, paper and recovered paper, are considered a result of a technical production process. Both wood and wood-based side streams and residues are used where they create most value.

Wood certification

2024

2023

FSC certified

18.3 %

14.4 %

PEFC certified

38.3 %

42.0 %

PEFC and FSC certified Total certified wood

32.0 % 88.5 %

30.6 % 87.0 %

Wood complying with FSC Controlled Wood or PEFC Due Diligence requirements

11.5 %

13.0 %

Total biological material

100.0 %

All wood-based raw materials, including wood, are either FSC™ (N003385) and PEFC (PEFC/02-44-41) certified or comply with the FSC Controlled Wood standard or Due Diligence requirements for PEFC. The certification ensures that all UPM's wood, pulp, paper and recovered paper suppliers are continuously assessed for their environmental and social responsibility and their involvement with local communities.