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Environmental performance in 216 UPM Shotton

Through the renewing of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Paper ENA and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The group employs around 19,3 people and its annual sales are approximately EUR 1 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM The Biofore Company www.upm.com UPM Shotton The mill is situated on the Dee estuary in Flintshire, North Wales. The Dee Estuary is a designated Special Protection Area one of the 112 listed Natura 2 sites in Wales. The mill site is about 1 miles from Chester and 25 miles from Liverpool. WITH BIOFORE Updated UPM Corporate Environmental Statement 216 UPM pulp and paper mills The mill began production with one newsprint line in 1985. The fi bre was supplied by an energy intensive thermo-mechanical pulp mill which used pulpwood, straight from the forest, as its principal raw material. A second newsprint line was added in 1989 together with the fi rst of three recycled fi bre production plants. Today only one paper machine operates and uses 1% recycled fi bre. The principal raw material is now sorted, recovered graphic papers, mainly from domestic waste collections. There have been several other large environmental investments over the last 28 years and the operations on site continue to develop. UPM Shotton Environmental performance in 216 is a supplement to the Corporate Environmental Statement of UPM s pulp and paper mills (available at www.upm.com) and provides mill-specific environmental performance data and trends for the year 216. The annually updated mill supplements and the UPM Corporate Environmental Statement together form the joint EMAS Statement of UPM Corporation. The next Corporate Environmental Statement and also this supplement will be published in 218. The effl uent treatment plant was rebuilt with activated sludge technology to deliver dramatic improvements in waste water quality despite increases in production Waste sludge from the recycled fi bre production plants is burnt in a combined heat and power (CHP) plant on site along with other renewable fuels to provide most of the site s thermal energy and approximately a third of its electricity demand A Material Recovery and Recycling Facility (MRRF) was constructed and started operation on the site in 211. This plant sorts the recyclable material from co-mingled domestic waste collections and delivers high quality recovered paper raw materials to the recycled fi bre production plants. Production capacity Up to 266,7 tonnes per annum Personnel 182 PEFC/2-31-8 Products Certificates Standard Newsprint EMAS EU Eco-Management and Audit Scheme ISO 141 Environmental Management System Standard ISO 91 Quality Management System Standard PEFC Chain of Custody Programme for the Endorsement of Forest Certifi cation FSC Chain of Custody Forest Stewardship Council For FSC products, visit www.fsc.org For PEFC products, visit www.pefc.org All certifi cates can be found from UPM s Certifi cate Finder (available at www.upm.com/responsibility) Environmental labels Awards EU Ecolabel Investors in People Standard EU Ecolabel : FI/37/1 2

Environmental year 216 At UPM Shotton our commitment to sustainable development is refl ected in our Mill Vision to be the front runner in creating value from renewable and recyclable materials. 216 was the fi rst complete year since the closure of PM1, RCF1 and 2 and Boiler 1 and gives an indication of the new levels of performance. The mill has also developed through the year with the commissioning of a 5MW solar park which, although owned by a third party, is directly connected to the mill and used for its daylight power needs. For many parts of the day the mill operated with 1% renewable energy. There were no breaches of the environmental permit in 216. The mill environmental targets were mostly achieved. The total energy consumed on site was lower than 215 and the percentage of green energy used was higher. The quantity of water used was lower than 215 as was the amount of chemicals used. However, the total amount of waste sent to landfi ll was also higher than in 215. This has been a challenging area but at the end of the year new recyclable outlets for boiler ash were developed which should realise an improvement in during 217. Challenging targets have been set to further reduce the total site environmental impact in 217 when compared to 216. UPM also invested in the mill; in the new Low Pressure Condensing Turbine was commissioned. The new asset used waste steam from the power plant made available since the closure of PM1 to generate additional renewable electricity. The site operates under an environmental permit (EP) issued by the environmental regulator, Natural Resources Wales (NRW). The mill remains part of the UK pulp and paper sector where permit conditions will be varied to refl ect recent changes in the sector regulations and technical guidance. Andrew Bronnert, Head of Energy & Operational Support David Ingham, General Manager 3

Air Water The CHP plant has the largest impact on the air emissions. Smaller back-up boilers on site only run during the winter months or during unplanned CHP plant shuts. The 216 fossil CO 2 emissions were lower than 215 due a full years operation without PM1 since the closure. The emissions were well within permit limits as indicated in the tables below. Fresh water consumption is constantly monitored and measured in all parts of the site. Process water is often re-used several times before being discharged to the effl u- ent treatment plant. The target in 216 was to further reduce the water consumption which was achieved. Emissions from the combined heat and power plant in 216 Daily final effluent discharge volume m 3 Continuous measurements Limit mg/m 3 Mean mg/m 3 Carbon monoxide (CO) 5 32.64 Nitrous oxides (NO X ) 2 152.75 Sulphur dioxide (SO 2 ) 5 3.71 Particulates 1.16 Total organic carbon (TOC) 1.89 Hydrogen chloride (HCl) 1 2.18 Periodic measurements (twice per annum) Limit mg/m 3 Mean mg/m 3 Mercury.5.35 Cadmium & thallium.5.19 Tin, arsenic, lead, chromium, cobalt, copper, manganese, nickel, vanadium.5.35 HF 2.3 Dioxins/furans (ITEQ).1 x 1 6.85 x 1 6 25, 2, 15, 1, 5, 1 8 6 4 2 Total solids concentration in final effluent mg/l Nitrogen, N mg/l 5 4 3 2 1 4

Waste The fi nal effl uent discharge remained well within consent limits throughout the year, as shown in the trends below. The operation of the effl uent treatment plant was stable and coped well with the closure of a production line. The mills overall waste production reduced in 216 due to the line closure. However, the % of waste sent to landfi ll increased as the boiler ash is generally landfi lled and this volume remained constant in 216 compared to 215. MRRF residues were reprocessed as a refused derived fuel for combustion on other sites and other boiler ash was reprocessed into cement. Biological oxygen demand, BOD 5 mg/l 5 4 3 2 1 Effluent ph ph 1 8 6 4 2 Temperature C 5 4 3 2 1 Limit value 5

Environmental parameters 216 The fi gures related to production as well as raw material and energy consumption are published as aggregated fi gures on group level in the UPM Corporate Environmental. Production capacity Paper Up to 266,7 t Raw materials and additives Energy Emissions to air Recovered paper Co-mingled recyclates Process chemicals Operating supplies Biomass fuels Fossil fuels Electricity Sulphur dioxide, SO X Nitrogen oxides, NO X Carbon dioxide, CO 2 (fossil) Particulates See UPM Corporate Environmental Statement for more information 93.5% 6.5% See UPM Corporate Environmental Statement for more information 6.4 t 263.3 t 11,133 t.26 t Water intake Industrial * 3,742,435 m 3 Discharges to water Waste** Size of mill area Chemical oxygen demand, COD Biological oxygen demand, BOD 5 Total suspended solids, TSS Effl uent volume Landfi ll Sludge Fly ash *** Bottom ash *** Metal Recovery rate Hazardous waste 222 t 16.6 t 31 t 2,579,95 m 3 3,437 t 5,76 t 19,788 t 5,214 t 2,424 t 44.3% 7 t 62 ha * Including potable water used on site. ** All waste tonnages are stated as dry weight and exclude wastes generated from the MRRF plant. Recovery rate is calculated on a bone-dry basis. *** These ashes are consider hazardous in the UK. 6

Performance against targets in 216 Targets and measures Deadline Target achieved? Energy Reduce total electrical energy consumption target less than 215 level Increase % Green electrical energy consumption target more than 215 level 12/216 12/216 Achieved Achieved Water Conservation Reduce total water consumption target less than 215 level 12/216 Achieved Use of Resources Reduce waste to landfi ll target to decrease % waste to landfi ll less than 215 Reduce Chemical consumption target decrease in total chemical consumption less than 215 12/216 12/216 Not achieved Achieved Environmental targets 217 Targets and measures Deadline Plan Energy Reduce total electrical energy consumption target less than 216 level Increase % Green electrical energy consumption target more than 216 level 12/217 12/217 Water Conservation Reduce total water consumption target less than 216 level 12/217 Use of Resources Reduce waste to landfi ll target to decrease waste to landfi ll less than 216 Energy improvement programme PM tonnage increase Condensing turbine and solar power output increase Condensing turbine operation. Water management improvement 12/217 Boiler fl y ash to recycling end-uses JOHN EARLY FOR AND ON BEHALF OF NQA CERTIFICATION LTD. VERIFIER REF UK-V-12 1 ST MARCH 217 REG.NO. FI - 58 7

UPM-Kymmene (UK) Limited UPM Shotton Weighbridge Road Shotton, Deeside Flintshire CH5 2LL United Kingdom Tel: +44()1244 28 For further information, please contact: David Ingham General Manager Tel: +44()1244 28447 www.upm.com Andrew Bronnert Head of Energy and Operational Support Tel: +44 ()1244 284329 6/217