UPM annual report 2014

UPM products offer an alternative to fossil-based products because they are renewable and store carbon. UPM is continuously reducing the carbon footprint of its operations and improving energy efficiency. It is also the only forest industry company in the world to have achieved the A100 level in the CDP Climate indices. Energy efficiency improved and climate actions recognised

CAPACITY TO GENERATE POWER THROUGH OWN POWER PLANTS AND SHAREHOLDINGS

UPM’s electricity consumption per tonne of paper kWh/t

2,000

Nominal MW

1,600

708 581 320

Hydropower Nuclear power

RESPONSIBILITY 45–59

1,200

Condensing power

800

1

Wind power

UPM Energy in total

1,610

400

Combined heat and power at mill sites

0

1,473

14 13 12 11 10 09 08 07 06 05

49

Mill site hydropower

The electricity consumption per tonne of paper has decreased by 20% over the last ten years due to continuous improvements in energy efficiency.

Mill site power generation in total

1,522 3,132

Total UPM

79% OF ELECTRICITY GENERATED BY UPM IS FREE FROM FOSSIL-FUEL CO 2 EMISSION

ELECTRICITY GENERATION

UPM’s energy production is based on a wide range of energy sources and the company aims to maximise the use of carbon-neutral energy. Biomass-based fuels make up approximately 83% of the fuels used by UPM in Finland and approximately 67% of those used worldwide. UPM is the second largest generator of bio- mass-based electricity in Europe. The largest project is the combined heat and power (CHP) plant at the UPM Schongau mill in Germany, completed in late 2014. The refur- bishment of the company’s own hydropower production assets in Finland is also underway. The refurbishment of the Harjavalta hydro- power plant is due to be completed in 2017. UPM’s investments in the generation of biomass-based power and heat at production facilities have significantly increased the capac- ity of the facilities. UPM’s continuous target is to improve energy efficiency Energy efficiency has been significantly improved by energy audits, innovations and internal campaigns over the last 15 years. From its energy-saving investments carried out in 2014, UPM gained savings of EUR 1.3 million, achieved 10,000 t avoidance in CO 2 emissions and 33,000 MWh reduction in energy consumption. The annual savings are EUR 2.1 million, 15,000 t and 55,000 MWh. In 2014, UPM’s climate change actions were recognised externally. The company was select- ed to the A List of the CDP Climate Perfor- mance Leadership Index 2014. UPM also achieved full points in the Climate Disclosure Leadership Index. UPM was the only paper and forest products company to achieve the CDP’s A100 level. By 2020, UPM aims to reduce fossil CO 2 emissions by 15% compared with the 2008 level. The company also aims to continuously reduce all other air emissions. Problems in the system used to burn weak malodorous gases at the UPM Kaukas pulp mill in Finland were the largest topic in 2014 (read more on next page).

UPM CHANGSHU REDUCING ITS EMISSIONS

TWh

2014 2013 5.6 5.9 3.2 3.1 4.8 4.8 0.8 1.1 14.4 14.9

Mill CHP

The new investment at UPM Changshu paper mill is significantly reducing the production plant’s emissions. UPM installed a new combustion gas purification system that reduces the amount of sulphur dioxide released into the air to a tenth of the previous level. It also reduces nitrogen oxide emissions by half. Sulphur dioxide and nitrogen oxides are gases released during the burning of fossil fuels, and they contribute to the acidifying of the environment. The advanced purification system will also reduce the amount of particulate emissions released into the atmosphere. The boilers at UPM Changshu’s combined heat and power plant use coal for fuel and produce steam and electricity for the mill site. Thanks to the new system, the thermal plant’s emissions will be significantly below the new official Chinese limits, which are considered strict when compared globally. The total investment cost is approximately CNY 100 million, which is approximately EUR 12 million.

Hydropower

Nuclear

Condensing

Total

FUELS USED FOR HEAT GENERATION TWh 2014 2013 Black liquor 18.5 17.9 Bark and other biomass 8.5 9.4 Heat recovered from TMP production 1.3 1.4 Renewable fuels total 28.3 28.7 Peat 1.2 0.8 Purchased heat 0.5 0.2 Natural gas 8.0 8.5 Oil 0.7 0.7 Coal 3.6 3.6 Total 42.2 42.6

CHASING THE SOURCE OF ODOUR

The local community around the UPM Kaukas integrate in Lappeenranta has experienced odorous gases in 2014. According to studies, the main problem originated from the old malodorous gas boiler, which caused several unexpected burner shutdowns at the pulp mill. To improve the situation, UPM invested EUR 1.5 million in a new burner for the recovery boiler in early 2014. However, the new installation alone did not solve the problem and the work continued. During the heat wave in summer 2014, the situation worsened when a high pressure area stagnated air and remained over the region for several weeks. As a result, the malodorous gas problem has been the largest topic for which any UPM unit has received critical stakeholder feedback in 2014. UPM has communicated actively locally and will keep on working to solve the problem by developing malodorous gas treatment at the mill. “So far, we have discovered and repaired essential machinery breakdowns and problems in our operating systems. Then we further improved the collection of malodourous gases during the pulp cooking processes and at the wastewater treatment plant in November. We are also planning some additional investments to tackle random emissions into the malodorous gas treatment system,” describes environmental manager Minna Maunus-Tiihonen. In 2015, UPM Kaukas will prepare a malodorous gases spreading model to examine the impact of the integrated mill as a whole on the local area.

5 UPM’s fossil carbon dioxide emissions mio t CO 2 /a mio t 15

UPM's acidifying flue gases 1,000 t

mio t

20

20

12

4

16

16

9

3

12

12

6

2

8

8

3

1

4

4

0

0

UPM completed the new combined heat and power plant at the UPM Schongau paper mill in Germany in December 2014.

0

0

14 13 12 11 10 09 08 07 06 05

14 13 12 11 10 09 08 07 06 05

■ Total emission

■ Total NOx ■ Total SO 2 Paper production Chemical pulp production

Paper production Chemical pulp production

Read more on the refurbishment of the Harjavalta hydropower plant (p. 20).

Increases in total volumes are due to acquisitions (in 2010 and 2011). In 2014, reduction was achieved mainly due to investment in flue gas purification at UPM Changshu paper mill, and process improvements at pulp mills.

More graphs available on page 139.

CONTENTS

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UPM Annual Report 2014

UPM Annual Report 2014