1 | © UPM

Sari Mannonen, UPM BiofuelsIEA Bioenergy Conference 28.10.2015

Advanced biofuels pave the way for successful bioeconomy

UPM today

2 | © UPM TURNOVER €9.9 BILLION • PERSONNEL 20,000 • SHAREHOLDERS 88,000 +

self-adhesive labels

pulp, plantations, biofuels, timber

Wood biomass is in the forefront of new bioproducts development

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Wood is preferred biomass

Technologies to convert lignocellulosic feedstock into bioproducts developing fast

Advantages of wood:

• Limited price volatility

• Available year-round

• Easy to transport and store

• No overlap with food-chain

Europe - Most forest-rich region

• 1.02 billion ha = 25% of global resources• Forest area expanding (annually 800.000 ha) • Only ~ 40% of increment utilized

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Biofuels for transportation

Labels and composites

Biochemicals

Biofibrils

Pulp, paper, plywood and sawn timber

Bioenergy – heat and electricity

Biofore growth opportunities – added value of wood and biomass

Sourcing and logistics of wood and biomass

UPM BioVerno

UPM Grada

Biofibrils

UPM Formi

UPM ProFi

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Responsibility is good business and key to success

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1Anticipating and managing risks

Creating competitive advantage and long-term value

New business opportunitiesBiofuels, Biochemicals, Biocomposites

Value creation with stakeholders

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UPM Biofuels and latest sustainability recognitions

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UPM renewed its position as the industry leader in Dow Jones Sustainability Indexes for 2014-2015

Award for Breakthrough Innovation in Technology in 2013

Winner in Travelling category 2014 awarded by European Commission

Finalist in Sustainable Innovation category in the Leading Technology Award 2014

Winner in Commercial Scale Plant of the Year 2015 category

UPM and WWF Finland together support sustainable wood-based liquid biofuels

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UPM and WWF Finland Dialogue paper signed in November 2014 shares common understanding and lists action points on wood based biofuels.To read the dialogue in its entirety, please see www.upmbiofuels.com

UPM and WWF Finland promote advanced biofuels that• deliver high greenhouse gas emission savings• are produced in highly efficient processes • comply with robust and credible sustainability criteria that

ensure– sufficient protected areas networks– forest management criteria of highest standard– accounting and minimizing of forest carbon stock

impacts

UPM and WWF Finland continue co-operation to further develop common understanding by joint research in advanced wood-based biofuels.

WOOD-BASED LIQUID BIOFUELS CAN

OFFER A SUSTAINABLE

OPTION FOR THE TRANSPORT SECTOR

UPM’s journey in advanced biofuels

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2006 2008 2015

20122008

UPM published its plans to become a significant producer of advanced biofuels

Development of hydrotreatment process started in

UPM R&D

UPM Lappeenranta biorefinery in commercial

production in January

First investment decision of 175 M€ for

UPM Lappeenranta biorefinery.

Produces renewable diesel from tall oil.

Development of BTL technology ongoing at GTI pilot plant in

Chicago, USA

2015

Sales of UPM BioVerno diesel

starts. Business is

expanding in stages.

Capturing synergies by full integration into UPM Kaukas mill site in Lappeenranta, Finland

RESEARCH CENTRE

BIOREFINERY

SAW MILL

PAPER MILL

BIOMASS POWER PLANT

PULP MILL

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UPM Lappeenranta Biorefinery, Finland

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Key facts:

• Product: Renewable diesel

• UPM investment: 175 M€

• Capacity: 100,000 tonnes/a

• UPM Patents & Applications: 200

• Employment: 200 persons

• Contributes approximately 25%

of Finland’s biofuel target 2020

Crude Tall Oil (CTO) – a residue of pulp making process as raw material

PRIMARY PRODUCTPulp for paper making

RECIDUE STREAMCrude tall oil

Crude tall oil must be removed from the chemical cycle to secure pulping process functionality

ENERGY

50%

48%

PULPING PROCESS

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2%

UPM renewable diesel process

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UPM is in an excellent competitive position tointegrate processes for new bioproducts

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Access, management and sourcing of biomass

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Three areas of competence bring UPM in the position to become the frontrunner in new biomass based innovations

Chemicalprocesses

• Kraft pulping• Renewable

diesel production

Biomasshandling

• Debarking• Saw mills• Mechanical

pulping

Bioenergy & Infrastructure

• Biomass boilers• CHP• Water treatment

Run sustainably large industrial processes

Processes of biomass conversion1 2 3

UPM BioVerno – Renewable diesel

RENEWABLE FEEDSTOCK

100 %CO2 EMISSIONS(VS. FOSSIL FUEL)

-80 %

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IN FOOD CHAIN

0 %

OXYGEN FREEHYDROCARBON

100 %

UPM BioVerno – tested quality

• Fleet tested with Technical Research Centre of Finland (VTT)– Several vehicle and motor tests,

and material tests– Bus fleet tests with VTT started

22.10.2015

• Fulfils demanding customer specifications – high quality drop-in diesel

• 100% renewable• Significantly less tailpipe

emissions• High stability• Distributed in Finland by St1 and

ABC gas stations15 | © UPM

Compatible with all diesel engines

– 80% less CO2 emissions

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Towards lower emissions – UPM BioVerno bus tests started in Helsinki region bus traffic

Driving cleaner traffic

UPM Biofuels