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ENVIRONMENTAL performance in 212 UPM Shotton

UPM leads the integration of bio and forest industries into a new, sustainable and innovation-driven future. Our products are made of renewable raw materials and are recyclable. UPM consists of three Business Groups: Energy and pulp, Paper, and Engineered materials. The Group employs around 22, people. UPM is present in 67 countries and have production units in 17 countries. UPM s annual sales exceed EUR 1 billion. UPM s shares are listed on the Helsinki stock exchange. 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 Area of Conservation and one of the 85 listed Natura 2 sites in Wales (614 in UK). The mill site is about 1 miles from Chester and 25 miles from Liverpool. 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 the two newsprint lines use 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 27 years and the operations on site continue to develop. UPM Corporate ENVIRONMENTAL statement 212 UPM pulp and paper mills UPM Shotton Environmental Performance in 212 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 212. 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 214. 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 52, tonnes per annum Personnel 395 Products Standard Newsprint Certificates Quality Management System: BS EN ISO 91:28 Certifi cate FM 2849 from BSi valid till 26/5/215 Environmental Management System: BS EN ISO 141:24 Certifi cate E23 from NQA valid till 21/12/213 Chain of Custody: PEFC Certifi cate COC-941 from SGS valid till 2/7/214 FSC Certifi cate COC-2249 from SGS valid till 2/7/214 EU Ecolabel license for newsprint papers Registration No. FI/37/1 valid until 12/7/215 Investors in People Standard The certifi cates can be found at www.upm.com > Responsibility > Principles and Performance > Certifi cate Finder. Awards Queens Award for Enterprise: Sustainable Development 29 PPI Award for Environmental Strategy 212 FI/37/1 PEFC/2-31-8 2 UPM SHOTTON, ENVIRONMENTAL PERFORMANCE IN 212

Environmental year 212 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. Receiving the PPI Environmental Strategy award in 212 confi rmed the priority placed on environmental performance as a requirement for continued sustainable development. The mill also demonstrates continuous improvement through the mill management targets and continued innovative investments on site. This approach can be seen in 212 with the on-going optimisation of the state-of-the-art MRRF plant on site. The plant has increased capacity continuously through 212 and is now operating on a 24 hour basis. The site operates under an environmental permit (EP) issued by the Environment Agency. As part of the UK pulp and paper sector review the site permit was re-issued in 212. The environmental performance of the CHP plant has improved signifi cantly. The installation of an intelligent combustion control system has resulted in 5% fewer carbon monoxide emission spikes that exceeded our permit short-term limits than in 211. UPM have continued their investment programme in the CHP plant improvements at Shotton. The planned shutdown in 212 included work designed to reduce mechanical erosion damage and so prevent disturbances and unplanned shuts. A reduction in mill operating rate during 212 has meant that all specifi c environmental performance fi gures have been impacted by this change. If the mill is not producing newsprint but still consuming resources like electricity and water the consumption fi gures per tonne of newsprint output will increase. The mill operating rate is affected by outside factors, such as the UK and global newsprint markets, so is very diffi cult to forecast for 213. The specifi c electrical energy and water consumption targets for 212 were not achieved and the target for 213 will be to improve on the 212 performance. Another important part of our environmental performance is to maximise the electrical energy supplied from the CHP plant on site. Unfortunately there were several unplanned shuts in 212 and the improvement target for the CHP plant is to have less unplanned downtime in 213. Modifi cations carried out in the planned shut this year should improve the CHP plant reliability. The continued stable performance of the effl uent treatment plant produced fi nal effl uent quality that was within the permit consent limits throughout the year. Finally, the reduction of waste remains a focus for the site in 213. Peter Walmsley, Safety and Environment Manager David D Ingham, General Manager UPM SHOTTON, ENVIRONMENTAL PERFORMANCE IN 212 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. During the long planned shut in process steam was again supplied by the local power station. The 212 fossil CO 2 emissions were very similar to 211 due to continued unplanned CHP plant shuts for tube failures and internal fouling. The majority of emissions were well within permit limits as indicated in the tables below. There were three carbon monoxide emission spikes that exceeded the short-term (3 minute) permit limit of 1 mg/m 3 but were short-lived, rarely lasting for more than 3 minutes. The intelligent combustion control system can predict changes in combustion conditions and react quickly in order to prevent emissions spikes, the three events in 212 were caused before the control tuning was completed in and when the combustion control system was not working correctly in. 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 uent treatment plant. Lower mill operating rate in 212 resulted in higher specifi c water consumption and the target in 213 is to reduce specifi c water consumption. The fi nal effl uent discharge remained well within consent limits throughout the year as shown in the trends below. The stable operation of the effl uent treatment plant was refl ected in consistently low values for solids, BOD and ammoniacal nitrogen. The seasonal effl uent temperature limit of 28 degrees C was applied on several occasions during periods of high ambient air temperature. Limit value EMISSIONS FROM THE COMBINED HEAT AND POWER PLANT IN 212 Continuous measurements Limit mg/m 3 Mean mg/m 3 Carbon Monoxide (CO) 5 19.6 Nitrous Oxides (NO X ) 2 152.9 Sulphur Dioxide (SO 2 ) 5 7.9 Particulates 1.2 Total Organic Carbon (TOC) 1 1.2 Hydrogen Chloride (HCl) 1 1.4 Periodic measurements (twice per annum) Limit mg/m 3 Mean mg/m 3 Mercury.5.5 Cadmium & Thallium.5.35 Tin, Arsenic, Lead, Chromium, Cobalt, Copper, Manganese, Nickel, Vanadium.5.75 HF 2.45 Dioxins/Furans (ITEQ).1 x 1 6.45 x 1 6 25, 2, 15, 1, 5, 1 8 DAILY FINAL EFFLUENT DISCHARGE VOLUME m 3 Average 211 TOTAL SOLIDS CONCENTRATION IN FINAL EFFLUENT mg/m 3 4 UPM SHOTTON, ENVIRONMENTAL PERFORMANCE IN 212 6 4 2 Average 211

Waste 5 4 3 2 1 1 8 6 4 2 5 BIOLOGICAL OXYGEN DEMAND, BOD IN FINAL EFFLUENT mg/m 3 PH VALUE OF FINAL EFFLUENT ph Average 211 Average 211 AMMONIACAL NITROGEN, N CONCENTRATION IN FINAL EFFLUENT mg/l CHP plant ash was re-used as cattle bedding desiccant and sewage sludge liming agent for most of the year. In the last quarter of 212 the ash was re-classifi ed as a hazardous waste which was then used in cell construction at a landfi ll site in Yorkshire. Also in the last quarter some de-inking sludge was removed from site for re-use as cattle bedding material. The amount of non-repulpable rejects from the recycled pulp production process sent to landfi ll was similar to 211, which indicated an overall quality reduction in the recovered paper raw material supply. The local plant to further process these rejects was not fully commissioned hence the improvement target was not achieved. The target for 213 remains to reduce the material sent to landfi ll from the recycled pulp production process. The amount of hazardous waste from the disposal mixed chemicals, sludges and oils etc. remained stable in 212. The ash classifi ed as hazardous waste was a signifi cant tonnage which was re-used in cell construction at a hazardous landfi ll site. Other end uses for this ash material are being investigated for development in 213. 4 3 2 1 Average 211 TEMPERATURE OF FINAL EFFLUENT C 5 4 3 2 1 Average 211 UPM SHOTTON, ENVIRONMENTAL PERFORMANCE IN 212 5

Environmental parameters 212 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 Statement. Production capacity Paper 52, t Raw materials and additives Energy Emissions to air Water intake Discharges to water Recovered paper Co-mingled recyclates Process chemicals Operating supplies Biomass fuels Fossil fuels Electricity Waste* Landfi ll *** Size of mill area Sulphur dioxide, SO X Nitrogen oxides, NO X Carbon Dioxide (fossil) * Particulates See UPM Corporate Environmental Statement for more information 94.7% 5.3% See UPM Corporate Environmental Statement for more information 17.1 t 335.6 t 21,495 t 1.2 t Industrial Potable ** 5,879,63 m 3 17,136 m 3 Chemical Oxygen Demand Biological Oxygen Demand Total Solids Effl uent Volume Fly ash Bottom ash Metal Recovery rate Hazardous waste 57 t 13.9 t 52.6 t 4,774,568 t 2,966 t 67, t 2,943 t 364 t 89.4% 94.2 t 65 ha * CO 2 fossil emissions are based on the verified EUETS returns for the site ** Potable used as back-up supply only *** Wet weight as received at landfill site, excluding waste from MRRF plant. Recovery rate and other waste tonnages are given on a bone-dry basis 6 UPM SHOTTON, ENVIRONMENTAL PERFORMANCE IN 212

Performance against targets in 212 TARGETS AND MEASURES DEADLINE OUTCOME Energy Reduce specifi c energy consumption target was set at.96 MWh/t of newsprint produced Increase Boiler 7 availability target was set at 96% time availability 12/212 12/212 Not Achieved Not Achieved Water Conservation Reduce Specifi c water consumption target was set at 12.5 m 3 /t of newsprint produced 12/212 Not Achieved Use of Resources Reduce waste to landfi ll target to reduce waste tonnage from mill to landfi ll by 5% Reduce the amount of MRRF residual material sent to landfi ll by 5% 12/212 12/212 Not Achieved Achieved Current targets TARGETS AND MEASURES DEADLINE DEPARTMENTS RESPONSIBLE Energy Reduce specifi c energy consumption target less than 212 level Increase Boiler 7 availability target less than 212 unplanned shut time 12/213 12/213 Production and Utilities Utilities Water Conservation Reduce Specifi c water consumption target less than 212 level 12/213 Production and Utilities Use of Resources Reduce waste to landfi ll target to reduce RCF pulper rejects tonnage to landfi ll by 1% target less than 1% of MRRF residual material sent to landfi ll 12/213 12/213 Production and Utilities MRRF JOHN EARLY FOR AND ON BEHALF OF ACERTIVA GROUP (TRADING AS NQA). VERIFIER REF UK-V-12 26 TH MARCH 213 REG.NO. FI - 58 UPM SHOTTON, ENVIRONMENTAL PERFORMANCE IN 212 7

www.upm.com 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 D Ingham General Manager Tel: +44()1244 28447 Peter Walmsley Safety and Environment Manager Tel: +44 ()1244 284394 UPM Fine, 14 g/m 2. Printed 6/213.