UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Sustainability

UPM in brief

Our strategy

Our businesses

Actions for the environment

In focus

Advancing the circular bioeconomy

Accelerating nutrient recycling

Challenge Nitrogen and phosphorus are essential for plant growth and food production. However, industrial nitrogen production is energy-inten sive, and phosphorus is a depleting natural resource. Action UPM has set targets for 2030 to use only recycled nutrients at our efflu ent treatment plants and to utilize all our process side streams. In 2025, several mills tested new sources of recycled nutrients in their effluent treatment and expanded or started using them. For example, UPM Changshu started using recycled phosphorus, and UPM Nordland switched to recycled nitrogen. We expanded the use of our process side streams in agricul ture, and some of our Rauma and Kaukas effluent treatment sludges started being used as soil improvers after treatment by a collaboration partner. In Uruguay, the Paso de los Toros pulp mill commercialized a liming agent "Microcal", made from electrostatic precipitator dust from a lime kiln, and its use in agriculture began. Impact We can reduce the need for nutri ents derived from virgin materials by enhancing nutrient recycling at our effluent treatment plants and through our process side streams. Liming regulates soil pH, improving nutrient solubility and availability for plants. Sludge increases soil’s carbon content and improves its nu trient and water retention, reducing the leaching of nutrients to water courses.

Our commitments

We use our raw materials efficiently. We already consider the circularity of our products in the design phase and strive to utilize all our process side streams. Resource efficiency and the circular bioecon omy respond to resource scarcity, contribute to climate change mitigation, and provide sustainable solutions for customers and consumers. Actions in 2025 • The UPM Product Stewardship Stand ard was implemented in all relevant businesses • Several innovative co-created solutions for recyclable, paper-based packaging were introduced with part ners and brands • Launch of UPM Circular Renewable Black™, the first bio-based, NIR-de tectable pigment that supports plastic recycling processes • Further mills tested new sources of recycled nutrients and expanded or started using recycled nutrients • Further work conducted at pulp mills in Finland and Uruguay to identify uti lization options for green liquor dregs.

Sustainable raw materials Our main raw material is renewable wood from sustainably managed forests. We also use secondary materials and residues in some of our products. Product stewardship We ensure that our products are safe for their intended use, compliant, and sustainable throughout their life cycle. Our sustainable product design concept promotes circularity throughout the product life cycle. We aim to achieve ecolabeling for all applicable products, Circular input In addition to using renewable raw materials from sustainably managed forests, we use secondary raw materials such as recovered paper to produce graphic papers. We also use residues such as crude tall oil to produce renew able diesel and naphtha. We have developed innovative solutions and products from lignin, a side stream from pulp production. Sustainable product design We consider the environmental and social impacts of our products throughout their life cycle, from material selection to production, use, and recycling. Our sustainable product design concept steers our product development, en suring that every new product and service has a proven sustainability value proposition. Most of UPM's products are recyclable, depending on how they are processed. Making use of residues, side streams and waste We develop recycling and utilization solutions for our production side streams and share best practices, research results, and ideas across the company. Our priorities

increase our portfolio of climate-positive prod ucts, and develop new products and services that contribute to the UN SDGs. Efficient use of resources We use raw materials, water, and energy efficiently, while minimizing waste. We con sistently work to find utilization options for all our production side streams to ensure that no process waste is sent to landfills or incinerated without energy recovery by 2030. We also aim to use only recycled nutrients in our own effluent treatment plants by 2030. We use organic production residues to generate energy and as soil amendment materials or raw material for the brick industry and board manufacturing. Ash has multiple uses, including earth construction, use in the cement industry and as a fertilizer, serving as a raw material for paper fillers, and replacing caustic soda in internal processes. Lime is used as a liming agent in agriculture or for pH adjustment. We are working hard to find sustainable uses for green liquor dregs, one of our most challenging types of process waste to utilize. We are actively searching for and testing nu trients from recycled sources to replace all the nitrogen and phosphorus used at our effluent treatment plants with recycled alternatives by 2030. Collaborating for circularity We work with industry associations and part ners to share knowledge and accelerate cir cularity across the value chain. We welcome partners to co-create circular innovations.

Sustainability by design The concept consists of two phases. The first involves investigating the customer’s or consumer’s problem and defining our value proposition to solve it. Addressing challenges across a product’s six life cycle stages (design, materials, production, distribution, use, and circularity) requires sus tainability to be considered from the beginning. The second phase focuses on developing and delivering the solution. To support decision-making and substantiate environmental claims, we use several tools within our sustainable product design framework. These include a tool we have developed that maps the impact of products on the UN SDGs, as well as Life Cycle Assessment (LCA) and carbon footprint analysis to evaluate the potential environmental impacts of new materials and products. We also conduct laboratory and pilot testing, including assessments of biodegrada bility and recyclability. These tools help ensure that sustainability is a measurable and verifiable attribute of our products.

Sustainability Statement, ESRS E5 Resource use and circular economy on page 199

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UPM Annual Report 2025

UPM Annual Report 2025